SHEN LI PING v. ORIENTAL LOGISTICS GROUP LTD

DCEC 987/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION NO 987 OF 2010

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BETWEEN

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JUDGMENT

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Background

1.  This is the trial of the application of Madam Shen Li Ping for herself and for and on behalf of other members of the family of Tsang Kwok Kwong (“the Deceased”) for compensation under sections 6(1)(b) and 6(5) of the Employees Compensation Ordinance (Cap 282) (“ECO”).  The application arose out of a fatal accident that happened on 27 December 2008 in Shenzhen when her late husband, Mr Tsang Kwok Kwong (“the Deceased”) was driving a 10 ton cross-broader container truck bearing both Hong Kong registration number MZ6971 and mainland registration number粵ZSY02港 (“the Truck”).  At about 10:44 am on that day, the Truck bumped into the rear of another truck.  The Deceased suffered multiple injuries and unfortunately he was certified dead on the same day.

2.  The Deceased was born on 28 June 1963 and aged 45 at the time of the accident.  He is survived by the applicant (Madam Shen) and a son who was born in 2008.

Respondent’s position

3.  The parties agreed to the quantum at the outset of the trial and I shall come to that later.  The respondent disputed liability.  The respondent averred that at the material time, the Deceased was employed by a PRC company known as “Max Dart Technology Logistic Co Ltd（東莞福達貨運代理有限公司）（“MaxDart DongGuan東莞福達”）.  The respondent contended that the Deceased was not employed by the respondent (Oriental Logistics Group Limited/超捷國際物流有限公司（“Oriental HK/香港超捷”）, which is a company incorporated in Hong Kong.

4.  For the avoidance of doubt, the respondent accepted that the Deceased was an employee, as opposed to self-employed driver at the material time.   The respondent also accepted that the Deceased was in the course of employment at the time of the accident.  The ultimate question is whether the respondent（Oriental HK/香港超捷）or MaxDart DongGuan東莞福達 was the employer of the Deceased.

Issues

5.  Therefore, the main issue of this case is whether the Deceased was an employee of the respondent at the time of the accident (the “Issue”).  On this issue, each party relied on different documents to suggest one way or other, their documents pointed more to the respondent（Oriental HK/香港超捷）as the employer or more to MaxDart DongGuan東莞福達 as the employer.

The Law

6.  On the main issue, Counsel for the applicant refers me to the well-known case from the Court of Final Appeal: Poon Chau Nam v Yim Siu Cheung t/a Yat Cheung Airconditioning & Electronic Co (2007) 10 HKCFAR 156.  He submitted that the said judgment is not only binding on the lower courts when the issue is whether a person is an employee or an independent contractor, the factors mentioned in that case are also applicable to the present case when the issue is whether the Deceased was an employee of the respondent（Oriental HK/香港超捷）. He relied on §9 & §10 of Poon Chau Nam that reads:-

“…In the great majority of cases, deciding whether or not A is B’s employee presents little difficulty. Most people take up jobs which are regular and stable, doing the work assigned to them, supervised by the boss and receiving regular wages and other benefits in return…”

“… Often, the court is asked to decide whether someone is an employee as opposed to an independent contractor…”

7.  §18 of Poon Chau Nam reads:-

“The modern approach to the question whether one person is another’s employee is therefore to examine all the features of their relationship against the background of the indicia developed in the abovementioned case-law 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. It involves a nuanced and not a mechanical approach, as Mummery J emphasised in Hall v Lorimer (in a passage approved by the English Court of Appeal):

“In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.”

8.  The respondent has no strong view on whether the above test shall apply but to say the least, he did not rely on Poon Chau Nam.

9.  Suffice for me to say that the factors mentioned in Poon Chau Nam are helpful yardsticks to measure who was the employer.  After all, the issue involved in this case is facts-sensitive because it involves weighing exercise on different documents relied on by each party. Some will clearly be more weighty than others.  It is unlikely that one will be conclusive of itself above all others.  The court must balance the relevant factors and come to a rational view as to which side of the line the relationship falls.   

Applicant’s case

10.  The applicant said that some objective documentary evidence suggests that the respondent was the employer despite the respondent’s self-serving documents such as the personnel registration card（人事資料卡）. 

11.  The applicant relies on, inter alia, these documents that they said the cumulative effect of them would arrive at the conclusion that the respondent was the employer:-

(a)  The vehicle registration document showing the respondent is the registered owner of the Truck [trial bundle p 85];

(b)  A table bearing the letterhead of the respondent titled as “Drivers Contact Details” (司機聯系資料表), showing the assigned trucks and the contact details of different drivers including the Deceased.  According to the table, the Truck bearing Hong Kong registration number MZ6971 and mainland registration number粵ZSY02港 was assigned to the Deceased [p 77];

(c)  A table bearing the letterhead of the respondent showing details of calculation of the salary of the Deceased for December 2008(“December salary table”) [p 87];

(d)  An insurance policy issued in August 2008 showing the respondent insured against the Truck in accordance with PRC regulations (“the Truck’s insurance”) [p 89];

(e)  A table bearing the company chop of the respondent with GPS record showing the Truck’s movement for each stop of the journey during 26 and 27 December 2008 [p 121].

Respondent’s case

12.  On the other hand, as crystallised in the closing submissions of the counsel for the respondent, the respondent relied heavily on “the personnel registration card（人事資料卡）” of MaxDart DongGuan東莞福達dated 10 October 2008 to suggest that the employment relationship was between the Deceased and MaxDart DongGuan東莞福達.

13.  To offer explanations to those documents seemingly against the respondent when those documents bear the respondent’s letterhead or its descriptions on the plain reading of them, or those documents are said to be created for the respondent, the respondent contended that:-

(a)  The respondent（Oriental HK/香港超捷）was just one of the companies invested by Oriental Taiwan/台灣超捷 to carry on logistics business in Taiwan, Hong Kong and the PRC.  Other associate companies include MaxDart DongGuan東莞福達, Salem Logistics Company Limited（Salem/海全）and Global Chain Logistics Company Limited（Global Chain/亞細）.

(b)  The money for the purchase of various trucks, including the Truck came from Oriental Taiwan/台灣超捷.

(c)  Global Chain was responsible for the role of warehousing, Salem was in charge of general logistics and the respondent was responsible for air and sea freight transport.  MaxDart DongGuan東莞福達 was responsible for employing PRC truck drivers including the Deceased and PRC-HK transportation services.

Witnesses & Evidence

14.  I do not intend to set out in detail the witnesses’ testimonies unless the circumstances called for.  The applicant herself gave evidence.  The respondent called 3 witnesses, Ms Hon Pik Wei (transliteration) of the respondent (“RW1”), Mr Choi Tan Chun (transliteration) of Oriental Taiwan/台灣超捷 (“RW2”) and Mr See Shun Tak (transliteration) of MaxDart DongGuan東莞福達 (“RW3”).

15.  Although the applicant (Madam Shen) was not a direct witness on the main issue, her evidence is relevant to the integrity of certain documents that she obtained from various persons or offices after the fatal accident and those documents bear the respondent’s descriptions.  For example, from the bequeath of her late husband, she found the said “Drivers Contact Details” (司機聯系資料表). With lawyer’s assistance, she also procured copies of the said December’s salary table and the Truck’s insurance.

16.  RW1 was the administration manager of the respondent.  Her evidence was that she was responsible for interviewing candidates.  She did not have the employment details of the Deceased in the respondent’s archive nor she had ever seen the Deceased.  She said that had the Deceased been the employee of the respondent, the respondent would have insured for the Deceased’s employment.  Regarding the “Drivers Contact Details”（司機聯系資料表）, she believed that it was not prepared by the staffs of the respondent.  During cross examination, Ms Hon of the respondent seemed to agree that Global Chain/亞細, Salem/海全 and the respondent (Oriental HK/香港超捷) were essentially of the same group or they even shared same staffs responsible for accounting and personnel among these companies.  She said in effect that if there are documents with the respondent’s letterhead or title, eg the December’s salary table, it was prepared by the respondent for and on behalf of other companies for convenience sake.  For example, in respect of the drivers’ salary, after MaxDart DongGuan東莞福達 provided the information to the respondent (Oriental HK/香港超捷).  The respondent would then pay to drivers employed by MaxDart DongGuan東莞福達, including the Deceased, on Global Chain/亞細’s instruction.  That’s why the December salary’s table bears the respondent’s letterhead.

17.  RW2 was the director of Oriental Taiwan/台灣超捷.  He testified as to how he invested into MaxDart DongGuan東莞福達.  The fund came from Oriental Taiwan/台灣超捷 and Oriental Taiwan/台灣超捷used the respondent’s name to provide financial assistance to associate companies such as MaxDart DongGuan東莞福達, for example, the purchase of the Truck in the respondent’s name for use by MaxDart DongGuan東莞福達.  To facilitate the operation of the transportation business in the PRC legally, a company known as Hangzhou Hua Yu Limited Company (transliteration) 杭州華宇運輸有限公司 (“Hangzhou Hua Yu/杭州華宇”) was also used.  Its name was printed on the Truck.  He also gave an account on how those associate companies exercised their respective roles in the logistics business. 

18.  RW2, through the vehicle of Oriental Taiwan/台灣超捷, was the mastermind of those associate companies.  According to RW2, Oriental Taiwan/台灣超捷was a reputable company in the logistics industry.  He said that it might be the reason why those documents relied on by the applicant bears the respondent’s name.  He said that the staffs of MaxDart DongGuan東莞福達might on their own perception using the respondent’s name or letterhead to prepare documents so that it might provide confidence to drivers that MaxDart DongGuan東莞福達was associated with the reputable group of Oriental/超捷. 

19.  RW3 was the general manager of MaxDart DongGuan東莞福達.  He relied on the personnel registration card（人事資料卡）and Mr Yeung Wai’s statement to suggest that Mr Yeung interviewed the Deceased and finally employed the Deceased on behalf of MaxDart DongGuan東莞福達.  He often had contacts with Peggy (RW1) over the operation of the logistics business.

Discussions

20.  So much about the respondent’s evidence on the operation of its own logistics business and the relationship between those parent and associate companies, it does not alter the fact that the parties rely on the respective documents as aforesaid and I shall examine those material documents in the light of the witnesses’ testimonies or explanations on those documents.

21.  First and foremost, the respondent denied being the employer and put forward another company as the employer, namely, MaxDart DongGuan東莞福達.  To achieve this objective, they relied on the personnel registration card（人事資料卡）[p 91] and Mr Yeung Wai’s statement [p 182]. In the said handwritten statement, Mr Yeung allegedly interviewed the Deceased and the Deceased was thereafter employed by MaxDart DongGuan東莞福達.  All business undertaking and operation was manipulated by MaxDart DongGuan東莞福達 （一切经營运作由东莞福达支配）.  Mr Yeung’s testimony was important. For unknown reason, Mr Yeung Wai’s statement, which is in substance a witness statement, was put in as if it is an ordinary document in the list of document, as opposed to a witness statement.  It does not have a statement of truth.  Although it was dated 22 January 2009, no reasonable explanation was offered as to why after the commencement of this claim, no attempt was made to request Mr Yeung to prepare a witness statement in accordance with Order 38 of the Rules of the District Court nor was he invited to testify.  Although RW3 alleged that Mr Yeung has left MaxDart DongGuan東莞福達, he did not say that he had lost his contact.  He even agreed that he was not asked to attempt to locate Mr Yeung to testify.  This is not a situation where a witness cannot be located or for justified reasons such as seriously ill and there is no alternative but to adduce it for the Court to attach suitable weight.  As a result, although Mr Yeung’s statement may be admissible but having regard to the ability to call him but no attempt was made, I refuse to attach any weight on his statement, bearing in mind that I can draw adverse inference from that.

22.  In Li Sau Keung v Maxcredit Engineering Ltd & Another [2004] 1 HKC 434 ( at 443F-444D) (CA), it reads:-

“…In Cavendish Funding Ltd v Henry Spencer & Sons Ltd [1998] 6 EG 146 at 148-149, Aldous LJ cited the following passage from the judgment of Newton and Norris JJ in O'Donnell v Reichard [1975] VR 916 at 929:

"It is sufficient to say that in our opinion for the purposes of the present case the law may be stated to be that where a person without explanation fails to call as a witness a person who he might reasonably be expected to call, if that person's evidence would be favourable to him, then, although the jury may not treat as evidence what they may as a matter of speculation think that that person would have said if he had been called as a witness, nevertheless it is open to the jury to infer that that person's evidence would not have helped that party's case; if the jury draw that inference then they may properly take it into account against the party in question for two purposes, namely:

(a) in deciding whether to accept any particular evidence, which has in fact been given, either for or against that party, and which relates to a matter with respect to which the person not called as a witness could have spoken; ..."

“It is further to be noted that So was not a “safety officer” as the judge had thought; rather, he was an employee of the 2^nd defendant.  Whilst a safety officer would have been trained in the task of recording industrial accidents, the same cannot be said of an employee of the main contractor.  Had So given evidence, this aspect could have been further explored.  As he did not, the plaintiff was deprived of the opportunity.  In the circumstances, an adverse inference should have been drawn against the defendants.”

23.  Regarding the personnel registration card（人事資料卡）[p  91], although it bears the letterhead or title of MaxDart DongGuan東莞福達 and assuming it contains the signature of the Deceased showing he applied to MaxDart DongGuan東莞福達 for the post of a driver, the respondent’s own documents and the respondent subsequent conduct show that the personnel registration card（人事資料卡）was not conclusive, if it is not a sham. 

24.  Firstly, had MaxDart DongGuan東莞福達 been the employer of the Deceased since 10 October 2008, there was no reason why there was a table bearing the letterhead of the respondent titled as “Drivers Contact Details”（司機聯系資料表）(obtained from the Deceased’s belongings).  It seems to be issued by the respondent, not by MaxDart DongGuan東莞福達.  It shows the assigned trucks and the contact details of different drivers including the Deceased.  According to the table, the Truck bearing Hong Kong registration number MZ6971 and mainland registration number粵ZSY02港 was assigned to the Deceased [p 77].  As I said before, the respondent’s witnesses did not say that it is suspected to be a forged document, instead, they seemed to have accepted it as genuine but they purported to explain that the staffs of MaxDart DongGuan東莞福達might on their own perception using the respondent’s name or letterhead to prepare documents so that it might provide confidence to drivers because Oriental/超捷 is a reputable company.   This explanation is unreasonable, out of common sense and logic.  I do not accept this.  If that is the case, likewise, to provide confidence to drivers, the personnel registration card（人事資料卡）should also bear the descriptions of Oriental Taiwan/台灣超捷 or Oriental HK/香港超捷.  After all, it is their speculation as to why Oriental HK/香港超捷 with its business address appears in the said document.  In short, had MaxDart DongGuan東莞福達 been the employer, the document should have been issued by MaxDart DongGuan東莞福達, not by the respondent.

25.  Secondly, had MaxDart DongGuan東莞福達 been the employer, there was no reason why there was a table bearing the letterhead of the respondent showing details of calculation of the salary of the Deceased for December 2008.  Had MaxDart DongGuan東莞福達 been the employer, the document should have been issued by MaxDart DongGuan東莞福達, not the respondent.  Likewise, I do not accept the explanation of the respondent’s witnesses as to why the respondent’s name is used.    Their explanation as to why the respondent’s name is used suggested a very complicated scheme of set off between the customers and associate companies and among the associate companies themselves.  After all, their version is lacking documentary evidence that should have existed. 

26.  Thirdly, there is other objective evidence such as the vehicle registration document showing the respondent is the registered owner of the Truck [p 85].  Besides, RW1 accepted that the full Chinese name of the respondent “超捷國際物流有限公司” and its Hong Kong telephone and fax number were printed in all the cross-broader trucks, including the Truck, but not the name of MaxDart DongGuan東莞福達.  After all, there was no reasonable explanation as to why MaxDart DongGuan東莞福達’s name was not used had it been responsible for PRC-HK transportation.  RW3 simply explained in a very flimsy way that it was not allowed under the laws and regulations of China unless there were approvals from different Chinese authorities.  I do not accept this for being an unreasonable and ill-founded bare assertion.

27.  Besides, there was an insurance policy issued in August 2008 showing the respondent insured against the Truck in accordance with PRC regulations (“the Truck’s insurance”) [p 89].  All these objective evidence are against the respondent’s case that MaxDart DongGuan東莞福達 was the employer.  Had MaxDart DongGuan東莞福達 been the employer, there was no reason why the said December salary table was prepared in the name of the respondent, not in the name of MaxDart DongGuan東莞福達.  Had MaxDart DongGuan東莞福達 been the employer, there was no reason why the tool (the Truck) was provided to the Deceased in the name of the respondent, not MaxDart DongGuan東莞福達.

28.  Fourthly, there was a table bearing the company chop of the respondent with GPS/movement record showing the Truck’s trail for each stop of the journey during 26and 27 December 2008 [p 121].    

29.  Had MaxDart DongGuan東莞福達 been the employer, there was not a single document issued in the name of MaxDart DongGuan東莞福達 to the respondent about the drivers’ salary, including the Deceased’s.

30.  The respondent’s witnesses purported to speak louder than the objective documents.  They either speculated or offered a concocted story to explain away the plain contents of the documents and shift the burden to MaxDart DongGuan東莞福達.  I reject their evidence except there is no conflict with the applicant’s case.

31.  The cumulative effect of the said documents suggests that the respondent was the employer.  As a result, having considered their evidence, the documents and closing submissions, I found that the respondent was the employer.  The Deceased died in the course of employment with the respondent when he was driving the Truck.

Quantum

32.  The quantum has been agreed upon by the parties.  For the purposes of sections 6(1)(a) and 6(5) of the ECO, the parties agreed on the respective sums of $645,996.00 and $35,000.00 as the award.  Interest on the said sums shall be 4% per annum from the date of death to the date of judgment.

33.  Regarding the apportionment of the award among the dependents under section 6A and schedule 7 of the ECO, I agree with the applicant’s suggestion on the apportionment in respect of the award of $645,996.00, that is 45% to the applicant; 45% to the Deceased’s son; and 10% to the mother of the Deceased with liberty to apply.

Conclusion and Orders

34.  Judgment for the applicant against the respondent in the total sum of $680,996.00.  Interest on the said sums shall be 4% per annum from the date of death to the date of judgment and thereafter at judgment rate until full payment.

35.  Costs of and occasioned by this application be to applicant with certificate for counsel to be taxed if not agreed (“Costs Order Nisi”).  Unless any of the parties seek to vary the costs order nisi by way of summons within 14 days from the date hereof, the Cost Order Nisi shall become absolute 14 days from the date hereof.

36.  The applicant’s own costs be taxed in accordance with the Legal Aid Regulations. 

37.  Lastly, I shall thank for both counsel being reasonable, pragmatic and efficient throughout the trial.