CHAN MING v. WAYFAIR INVESTMENT LTD.

DCEC 188/96

IN THE DISTRICT COURT OF HONG KONG

CIVIL JURISDICTION

EMPLOYEES' COMPENSATION CASE NO. 188 OF 1996

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Judgment

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1. This is a claim for compensation under the Employees Compensation Ordinance Cap. 282. The Respondent, although properly served, has chosen not to appear or be represented.

2. I am afraid that this is a very stale case, the accident that has given rise to the claim having occurred on the 2 April 1994. The application was filed on 28 March 1996, a matter of days before the expiry of the two year limitation period. The claim was originally brought against Wayfair Investment Limited trading as Wayfair Warehousing Company and judgment in default of an Answer was entered against it by Judge Kwan on 1st May 1996. It appears that there was some confusion on the part of the Applicant and of his solicitors as to correct identity of the Respondent. The correct name of the Respondent is Wayfine Investment Ltd, the two companies being associated with each other, and on 23 September 1996 the judgment was set aside and the proceedings restarted against this Respondent.

3. The facts are perfectly simple. According to the Applicant, on the 1st April 1994 he was contacted by his friend Mr. Nam Tim Keung who told him that he had a job the next day to take goods from a warehouse in Tsuen Wan to premises at Times Square in Causeway Bay. Mr. Nam told him that the Respondent required him to find somebody to help with the loading of goods on to Mr. Nam's lorry and to do the unloading and delivery of them at the other end at Times Square. He would be paid $300 for the day's work. He agreed to do the work for the pay that was offered. Once they arrived at the loading bay at Times Square he had to unload the goods, which were computer boards, bundled together and measuring 2' x 2' x 3' off the lorry. These were moved from the lorry by means of the lorry's tail-gate lift and placed on to a hand cart. The bundles of computer board were loaded on to the cart. As he was pushing the cart towards the lift which would have taken him to the place where he would have had to unload the boards, one of the bundles began to slide off the cart. Each bundle weighed about 200 pounds. He tried to prevent the bundle from sliding off and being damaged by using his thigh and arms but he was unable to do so with the result one of the bundles came off the cart trapping his left ankle. He sustained a Pott's fracture of the left fibula close to the ankle, which required a stay in hospital for ten days when the fracture was set by means of a plaster cast. This did not take properly and on the 10th April 1994 he was re-admitted for an operation to have a pin inserted so as to hold the bone together. Thereafter, he was required to use crutches, and he had to undergo physiotherapy. His condition is well reported on by Mr Arthur Chiang, F.R.C.S., an orthopaedic surgeon, in a report dated 21st December 1996 (two years and nine months after the injury). I shall need to return to this report with regard question of compensation.

4. Before I come to compensation, there is a fundamental issue that I need come to decide which is whether the Applicant was employed by the Respondent within the meaning of the Ordinance, or whether he was an independent contractor, which would take him outside the ambit of this jurisdiction. Mr. Cleves, who appears for the Applicant, has very properly faced up to this potential difficulty and I am grateful to him for his assistance in deciding this point. The fact that the Applicant is unopposed does not relieve him of the duty to prove his case.

5. The problem in this matter of course is that the Applicant's association, to use a neutral expression, with the Respondent company only lasted a matter of hours. There is no history or pattern of work that one can examine in determining this issue.

6. Mr. Cleves submits that the Applicant was employed by the Respondent as a casual employee.

7. Under the Ordinance an employee means :

"any person who has an .... entered into or works under a contract of service ....with an employer in any employment, whether by way of manual labour, clerical work, or otherwise, and whether the contract is express or implied, is oral or in writing."

8. The other options are that the Applicant was working on his own account, as an independent contractor, which of course is fatal to his claim, or that he was an employee of his friend Mr. Nam which as a Mr. Cleves submits also entitles him to compensation by virtue the fact that the Respondent would also be liable as the Principal under s. 24 of the Ordinance, Mr. Nam being their sub-contractor.

9. I turn to the primary contention that the Applicant was employed by the Respondent. In this regard the Applicant's evidence is supported by Mr. Nam (p.23 of the bundle) where at paragraph 3 of his statement he says that :

"At the end of March 1994 I was contacted by a company called Wayfair Warehouse Company who told me that there was a job taking goods from their warehouse in Tsuen Wan to Times Square in Causeway Bay. They asked me if I knew anyone who would be interested in doing the loading and unloading work that the job needed for $300 per day. I said that I would try to find someone and contacted to Mr. Chan Ming. I told him the rate of pay."

10. Looked at overall it seems to me that the Applicant's relationship with the Respondent was that of a casual employee. The particular hallmarks of the relationship which matter are the that Respondents' exercised a substantial degree of control over the Applicant in that they could tell him what work was to be done. The indicated what goods were to be loaded in Tsuen Wan and taken to Causeway Bay and where they would left by him. His relationship with them did not involve him in any prospect of profit or risk of loss. They had the power to dismiss or to suspend him. But against that, as his work was a casual nature (for one day only), it cannot be said that he was paid a salary or wage which infers a regular periodic payment, nor given the very transitory nature of his engagement, can it to be said that he was part of the Respondent's overall ogranisation.

11. There is no single conclusive test for the distinction between a contract of service and a contract of services, but I have come to the view, following Cooke J.'s observations in Market Investigation Ltd v. Minister for Social Security (1962) 2 QB 173, 184-185 which were approved by the Privy Council in Lee Ting-sang v. Chung Chi-keung (1990) 2 WLR 1173 that the facts in this matter best align themselves to a contract of service as a casual employee, rather than as an independent contractor. The test applied by Cooke J. was as follows :

"Is the person who has engaged himself to perform these services performing them as a person in business on his own account? If the answer to that question is 'yes', then the contract is a contract for services. If the answer is 'no', then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and the factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task."

12. The balance of the features which are referred to in that passage favour the Applicant's case. Accordingly, he qualifies to be compensated and in those circumstances Mr. Cleves fall-back submission that failing proof of employment by the Respondent, the Applicant was employed by Mr. Nam as a sub-contractor to the Respondent as Principal does not require consideration.

13. That being the case I now turn to quantum.

14. Mr. Cleves contends for a very substantial award of $713,959 which is to take the Applicant's case at face value.

15. Although the Applicant is unopposed I am required to consider his case on its proper merits rather than apply a rubber stamp to it.

16. I start with his pre-accident pattern of employment and his pre-accident earnings.

17. The Applicant was born on the 31 March 1960 so his now aged 40. At the time of the accident he was 34. He was educated to Middle 3 level at school and has no formal qualifications. In his evidence he told me that he had done manual jobs prior to his accident, working on a casual basis on building sites, and also doing the sort of job that he was doing when he was injured. He had also been a fish hawker operating a stall of his own but that was some years ago and there is little prospect of his going back to that sort of work now. According to him he worked on average 25 days a month. His working hours ranged from between 8 in the morning to 6 o'clock in the late afternoon and he could make between $300 and $400 a day. Based on that Mr. Cleves invites me to say that his pre-accident earnings were on average $7,500 a month taking the lower striking rate of $300 a day. Given the casual nature of the Applicant's employments one is left in the position of either having to accept everything that the Applicant says or rejecting his evidence on the basis of the overall impression that he has made in the witness box having regard to his evidence as a whole. There is no documentary evidence to confirm what he has told me about his pre-accident earnings. I am bound to say that the impression that I formed of the Applicant was that he is a rather relaxed individual, he has no obligations in terms of a wife or children to support and I am very doubtful about his evidence that month in month out he was working 25 days a month. I am of the view that it is more likely that he worked 20 days a month, which in effect would mean that he took all of the weekends off. I think that is the likelier pattern of work for this gentlemen. In those circumstances, and for those reasons I have come to the view that his average earnings pre-accident were $6,000 a month (at $300 a day).

18. I now turn to consider the effect, in this regard of Mr. Chiang F.R.C.S.'s report. The report starts at page 29 of the trial bundle. As a result of this injury the Applicant was in receipt of sick leave certificates until the 10th March 1995, that is to say for a period of 11 months. The Employees Compensation Board granted him 3% loss of earning capacity. Mr. Chiang, in his report dated 21st December 1996, that is to say 2 years 9 months after the accident, has observed that at that time the Applicant was complaining of an ache to his left ankle after walking for 2 hours. That there was a weakness when he squatted and he could not squat on his left ankle. That there was a stiff feeling in the left ankle when he walked upstairs and that he had not tried any lifting of heavy objects. On physical examination the surgeon noticed that the Applicant walked with a mild limp. There was no soft tissue swelling around the left ankle and the bony contour of the left ankle was satisfactory. By way of comment Mr. Chiang observed that the X-rays showed a well healed fracture which was in good alignment and that the left ankle joint was well preserved and there was no narrowing or abnormal change in the articulation between left fibula and talus. There was no post-traumatic degenerative change in the ankle joint. When Mr. Chiang tested the range of motion he found that there was some mild limitation in the dorsiflexion, eversion and inversion of the left ankle. The range of motion was noted to be otherwise good and the muscle bulk of the left lower limb was good as suggested by the comparable thigh and calf circumference measurements of the left lower limb. Mr. Chiang concluded that these observations suggested a reasonable recovery from the accident. He considered that the degree of impaired range of motion of the left ankle suggested relatively symptom free daily activities. The left ankle symptoms may come about with prolonged heavy manual work or unduly long hours of standing. Finally, Mr. Chiang says that the alignment of the left fibula was fully restored and there was no evidence of post-traumatic osteoarthritic changes. He thought that the chance of future degeneration was unlikely. And this from the Applicant's own doctor. A report of this sort provides a very good pointer to future earnings as compared to the pre accident situation.

19. The Applicant has told me that overall his employments have become more restricted given the physical situation and also that he works less often. In 1996 he worked as a waiter in a restaurant earning $200 a day working 10 hours a day. Unfortunately he was not able to meet the physical demands of standing for prolonged periods of time and that employment came to an end. He was also employed by a courier company delivering various parcels and documents and this earned him $4,200 a month. He had that employment in 1995. Unfortunately he couldn't meet the demands of that work either. According to him his main difficulty is coping with prolonged periods on his feet. He does not feel able to return to the building sites. He has registered with the Labour Department.

20. Mr. Cleves, on his behalf, therefore submits that I should take his current earnings, in line with a reduced earning capacity, to be $5,500 a month as opposed to what had been submitted as a pre-accident figure of $7,500 a month. I have already found, for reasons that I have given, that his pre-accident earnings were more likely to be a somewhat lower figure of $6,000 a month.

21. On a fair reading of Mr. Chiang's report and the assuming, it seems to me reasonably, that his leg will have got stronger since Mr. Chiang's report in 1996, that there is no reduction in his earning capacity. I am satisfied that he could easily earn $6,000 a month and that is a position he should have attained at about the time that Mr. Chiang was reporting on him. It is usually easier to come to a view on such matters when there is a properly contested case but here I only have the Applicant telling me of his situation. Clearly, whilst he shouldn't be disadvantaged by being unopposed before the court, at the same time I must consider his evidence critically. This gentleman was a casual worker before the accident. That accident resulted in an unpleasant fracture which held him back, but there is no reason why by the time of Mr. Chiang's report he should not have regained his pre-accident earning capacity, and so I shall assess compensation on the basis that by the 1st January 1997 there should be no further post accident losses. Accordingly, I propose to dismiss the claim under s. 9 of the Ordinance, this not being a case of permanent partial incapacity. It falls to be assessed only as a s.10 case being one of temporary incapacity.

22. This claim is in two parts. Firstly, the period when the Applicant was certificated as sick, that is to say from the 2nd April 1994 to 10th March 1995. Secondly, I propose to allow a period from 11th March 1995 to 31st December 1996, when on the evidence the Applicant was capable of working but at a reduced rate. He has indicated that during this period he had worked as a waiter and also for a courier company. Doing my best on the evidence that he gave, I take the view that he was earning on average $3,000 a month, whereas but for the accident he would been earning $6,000 a month, and so I shall make an assessment as between those two figures. He also entitled to his medical expenses in full, that claim being under s. 10A.

23. Compensation will therefore be assessed as follows :

Section 10

(i)	Sick leave from 2nd April 1994 to 10th March 1995
	11 months 8 days
	Take 20 day months
	11 months 20 x $200 = $44,400
	8 days 8 x 20/30 x $200 = $1,066.66
(ii)	Further period of temporary partial incapacity
	11th March 1995 to 31st December 1996
	21 months and 21 days
	Take 20 day months
	4/5 of the difference between $6,000 a month and $3,000 a month expressed as a daily rate = $120 per day
	21 months 20 x $120 = $50,400
	21 days 21 x 20/30 x $120 = $1,680
	Total : $44,400 + $1,066.66 + $50,400 + $1,680 =$91,813.32

Section 10A

 

Claimable medical expenses
QMH as in-patient	$972
Crutches	$410
Follow up 10 days @$36 per day	$360
Physiotherapy 19 treatments @$36 per treatment	$684
Total	$2,426
Total:	$94,239	.32

Total compensation therefore is $94,239.32 and to that award must be applied interest. Mr. Cleves has invited me to award interest from the date of the accident which would give a period 6.62 years. I take the view that this is far too long. Mr. Cleves has drawn my attention to some of the difficulties that have arisen in the preparation of the case including the fact the Applicant's witness had emigrated to the West Indies, but even if I make every allowance for that I would have thought that the appropriate period would be 41/2 years of interest, that is to say a period of 54 months. I award half the judgment rate until today and thereafter at the judgment rate until payment. The appropriate calculations will therefore need to be made and added to the compensation. I also award the Applicant his costs on a party and party basis to be taxed if not agreed together with the legal aid taxation.