LAM SIK v. SEN INTERNATIONAL VENTURES CORPORATION (HK) LTD.

1992, NO. E.C.127

HEADNOTE

Garbage collector at hotel - While in garbage room suffered blackout, fell down and sustained personal injury - Held that he was an employee and that his accident arose out of and in the course of his employment - As to whether he was an independent contractor rather than an employee, fundamental test was whether the injured person performed his services as a person in business on his own account (Market Investigation v. Minister of Social Security [1969] 2QB 173 at p.184 and Lee Ting-Sang v. Chung Chi-keung [1990] HKLR 764 at p. 766) - Here the Applicant had not done that - Reliance by Respondent on description in written agreement of Applicant as "contractor" and of his remuneration as "contractor fee" defeated by misrepresentation - Also such reliance precluded on basis of rule that on the question of whether someone is an employee or independent contractor, where any particular term or expression in an agreement is contradicted by the clear effect of the agreement as a whole, then it is such overall effect which governs (Australian Mutual Provident Society v. Chaplin (1978) 18 ALR 358) - Here effect of agreement as a whole pointed clearly to an employer-employee relationship - On question of whether accident arose out of and in the course of Applicant's employment: difference between the two concepts as explained in Dover Navigation Co. Ltd v. Isabella Craig [1940] AC 190 at p.199 - As to "in the course of": prima facie "anything at all that happens to a man while he is at work happens in the course of his employment; and if it happens unexpectedly it is an accident in the course of the employment": per Windeyer J in Weston v. Great Boulder Gold Mines Co. Ltd. (1964) 112 CLR30 at p.40, citing Kavanagh v. The Commonwealth (1960) 103 CLR 547 - As to "out of": fatigue example given by Lord Finlay LC in Davidson v. McRobb [1918] AC 340 at pp 314-315 cited - Evidence approached accordingly - Measure of compensation: appeal to District Court under section 18 of Employees' Compensation Ordinance, Cap.282, against reviewed assessment by Ordinary Assessment Board dealt with in course of hearing - Permanent loss of earning capacity raised from 19% to 30%; and compensation awarded accordingly.

IN THE DISTRICT COURT OF HONG KONG

CIVIL JURISDICTION

EMPLOYEE'S COMPENSATION CASE NO. 127 OF 1992

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J U D G M E N T

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INTRODUCTION

1. On 27th January 1991, the Applicant, a garbage collector at the Ramada Inn in Wanchai, a hotel operated by the Respondent, sustained personal injury by accident in the garbage room of that hotel. He fell to the ground, hurting his head and his left shoulder and arm. This is his claim for employee's compensation.

2. His evidence as to how he came to fall is somewhat confused. Initially, he suggested that he lost his balance on a step ladder and fell as he was putting a heavy bag of garbage into a large garbage container. However, the spot at which he was found lying on the ground is so far away from any container or step ladder as to run counter to the notion that the accident happened in that way. And, later, he said that he did not know exactly what he was doing when he fell. Mr. Kwan for the Respondent suggested to him in cross- examination that he fell as the result of a blackout.

3. It is to be noted that in a report dated 26 September 1991 from the Queen Mary Hospital (to which the Applicant was admitted on the day of the accident, having been transferred there from Tang Shiu Kin Hospital) it is said: "He presented with sudden loss of consciousness and fell onto the ground by the left side of the body."

4. When Mr. Kwan put that report to Dr. David Lee called for the Applicant, the doctor said that looking at the report, the cause of the fall was a blackout; that he could not tell the exact cause of the blackout; but that he suggested fatigue.

5. I certainly found the Applicant convincing when he gave evidence to the overall effect that he had been working long and hard before he fell.

6. On the whole of the evidence, I find that he fell as the result of a blackout brought on by fatigue caused by the strenuous work which he had been doing, collecting heavy bags of garbage and emptying them into large containers, for about an hour that morning.

WHETHER COMPENSATION IS DUE

7. Coming to the bases on which entitlement to employee's compensation is contested, the first thing which the Respondent says is that the Applicant was an independent contractor rather than an employee. I will come to that issue later.

8. At this stage, I will deal with the issue of whether, assuming the Applicant was an employee, his accident arose out of and in the course of his employment.

9. As Lord Wright said in Dover Navigation Co. Ltd v. Isabella Craig [1940] AC 190 at p.199, the words "in the course of" a man's employment "relate to time conditioned by reference to the man's service" while the words "out of" relate to "causality".

10. In Weston v. Great Boulder Gold Mines Co. Ltd. (1964) 112 CLR 30, a case in the High Court of Australia, Windeyer J, stating the ratio of that Court's earlier decision in Kavanagh v. The Commonwealth (1960) 103 CLR 547, said (at p.40) that:

"... anything at all that happens to a man while he is at work happens in the course of his employment; and if it happens unexpectedly it is an accident in the course of the employment."

Weston's Case (supra) was one in which a locomotive driver in a mine was injured while at work in the mine when assaulted by an off-duty co-worker, who should not even have been in the mine at the time, as a result of an incident some weeks earlier wholly unconnected with work. Nevertheless, it was held that the victim had suffered personal injury by accident arising in the course of his employment, so that he was entitled to employee's compensation. Unlike our legislation which requires both, the Australian legislation required only that the accident arose out of or in the course of the employment.

11. Whether or not special circumstances might stamp any qualification upon Windeyer J's general statement, the statement does at least represent the prima facie position. And there is nothing to suggest that the present case is anything other than an ordinary one of a man injured in an accident at his place of work and during his time of work.

12. Turning to whether the accident also arose "out of" the Applicant's employment (assuming that he was an employee) it is to be noted that in Davidson v. McRobb [1918] AC 304 at pp 314-315, Lord Finlay LC gave an accident which an employee could not avoid due to fatigue as -an example of an accident arising out of his employment. Mr. Kwan disputed that the Applicant's blackout was brought on by fatigue resulting from his work. But, as I have indicated, I find as a fact that it was. In all the circumstances, that appears to be more probable than not. The work was long and hard; and the Applicant was not particularly robust. Dr. Lee's evidence as to fatigue is in my view convincing. In any event, the Applicant is entitled to rely on section 5(6) of the Employees' Compensation Ordinance, Cap.282, which provides that:

"For the purposes of this Ordinance an accident arising in the course of an employee's employment shall be deemed, in the absence of evidence to the contrary, also to have arisen out of that employment."

There is no evidence to the contrary: certainly none which I accept.

13. On the assumption that the Applicant was an employee, I find that his accident arose out of and in the course of his employment.

14. That brings me to the Respondent's contention that the Applicant was an independent contractor with them rather than an employee of theirs. In this connection, the Respondent relies heavily on a written agreement which it signed on 26th September 1990 and which the Applicant signed on the 28th of that month. The agreement is in this form:-

"Agreement of Daily Garbage Collection and Cleaning Service For Ramada Inn Hong Kong

Contractor	:	Lam Sik (male)
H.K.I.D. Card No.	:	A320008(9)
Contractor Fee	:	HK$3,500.00 per month
Commencing Date	:	October 01, 1990

Now it is hereby agreed as follows:

1. The Contractor shall work 7 days per week for Ramada Inn Hong Kong.

2. The Contractor shall collect garbage daily from 1st and 2nd floor down to the garbage room located at ground floor at 8:00 am, 4:00 pm and 8:00 pm.

3. The Contractor shall collect and transfer all the garbage in the garbage room to the garbage truck once daily. (including the garbage from Housekeeping Department).

4. The Contractor shall clean all the garbage bins and garbage rooms.

5. In case of absence, the Contractor himself should arrange a substitute to carry out the above mentioned duties.

6. The Contractor is not entitled to have any staff welfare and benefits from Ramada Inn Hong Kong.

7. The time schedule can be changed by Ramada Inn Hong Kong without any written advance notice.

8. The agreement is valid for 1 year upon signing by the Contractor and Ramada Inn Hong Kong.

9. The Ramada Inn Hong Kong shall not be liable for any damages or compensation under the Fatal Accidents Ordinance, the Law Reform (Miscellaneous Provisions) Ordinance, the Workman's Compensation Ordinance, the Occupier's Liability Ordinance or otherwise howsoever (whether under statute or at Common Law or in equity) by or in consequence of any accident, loss or injury.

Agreement of Daily Garbage Collection and Cleaning Service For Ramada Inn Hong Kong.

10. The agreement can be terminated by one month notice in writing.

11. In the event of any default by the Contractor in the performance of his obligations hereunder Ramada Inn Hong Kong may (subject to having given the Contractor notice of default in the event of any minor breach) terminate this Agreement summarily and without written notice.

SEN INTERNATIONAL VENTURES

CORPORATION (HK) LIMITED

BY RAMADA INN

its Manager & Agent

By Signed	Signed
_____________________________	___________________________
Michael B. Yu	Lam Sik, Contractor
Controller	H.K.I.D. #A320008(9)

Date: September 26, 1990 Date: September 28, 1990

That agreement covered the period within which this accident happened. It replaced a written agreement which the Respondent had signed on 27th October 1989 and which the Applicant had signed on the 31st of that month. The earlier agreement is in this form:-

"The quotation & agreement for part-time casual labour daily garbage collection and cleaning in Ramada Inn Hong Kong

Workers' Name:	LAM Sik (male)
H.K.I.D. Card No.:	A320008(9)
Wages:	HK$3,200.00 per month
Commencing Date:	October 1, 1989

Duties:

1. To work 7 days per week.

2. To collect garbage daily from 1st, 2nd floor down to the garbage room located at ground floor at 9:00 am, 2:30 pm and 10:30 pm.

3. To collect and transfer all the garbage in the garbage room to the garbage truck once daily. (including the garbage from Housekeeping Department).

4. To clean all the garbage bins, the garbage room.

5. In case of absence, the worker himself should arrange a substitute to carry out the above mentioned duties.

6. The worker is not entitled to have any staff welfare of Ramada Inn Hong Kong.

7. The time schedule can be changed if necessary without the advance notice.

8. he agreement is valid for 1 year upon signing by the worker and the representative of Ramada Inn Hong Kong.

Signed	Signed
_____________________________	___________________________
Siu Hon	Lung Lam Sik
Food & Beverage Manager	H.K.I.D. #A320008(9)
Date : 27/10/89	Date : 31.10.1989

c.c. Resident Manager

Controller

Executive Housekeeper

Assistant Steward

A Podere"

15. Lest it be thought that signing such an agreement betokens some sophistication on the part of the Applicant, I should mention that signing it was all he could do since he cannot read even his native Chinese let alone English, which he does not speak. The full extent of his literacy, if that is the word for it, is his ability to write his name in Chinese - in a pretty shaky hand, it seems.

16. As to what is the standard to be applied in determining whether a person was working as an employee or an independent contractor, the Privy Council said, in Lee Ting-sang v. Chung Chi-keung [1990] HKLR 764 at p.766 that the courts have not been able to devise a single test that will conclusively point to the determination in all cases, but that the matter had never been better put than it was by Cooke J in Market Investigation Ltd v. Minister of Social Security [1969] 2 QB 173 at p.184 when he said that the "fundamental test" to be applied is this

"Is the person who has engaged himself to perform these services performing them as a person in business on his own account?"

17. It seems to me clear that the Applicant was not in business on his own account. He was doing humble work of a strenous and unpleasant nature for modest remuneration.

18. I also test the matter by reference to all the tests suggested by Mr. Kwan. The Applicant agreed with Mr. Kwan who put it to him in cross-examination that he did not have to wear a uniform; that he did not have any medical benefits, holidays, double pay or bonus; that he did not have to report coming on duty; that he did not have to clock in or clock out; that his work was not supervised save that someone would check what he had done; that he was paid in cash rather than by auto-pay; and that if he wanted a day off he had to arrange for a substitute at his own expense.

19. There is nothing in any of that which is inconsistent let irreconcilable with a garbage collector working as an employee. And as far as the point about a substitute is concerned, I would add that such a state of affairs would be the natural position in regard to any worker whom an employer saw fit to work seven days a week.

20. As to the agreement so heavily relied upon by the Respondent, who are of course keen on the description therein of the Applicant as "contractor" and of his remuneration as "contractor fee", there are two answers.

21. First of all, it seems to me plain that such reliance on the agreement is defeated because its contents were misrepresented to the Applicant by the Respondent; and I so hold. Clearly, he was an employee under the earlier agreement, in which he was described as a "worker" and his remuneration as "wages". He told me - and I accept - that he signed the later agreement after a member of the Respondent's staff had asked him whether he was agreeable to an increase in "wages" of no more than $300.00 and that, upon his so agreeing, he was there and then handed the agreement to sign on the spot, which he did. Plainly, the impression given to the Applicant was that he was entering into an agreement new only in that it was for a further period at an increased wage. That impression is irreconcilable with the notion of his metamorphosis from employee to independent contractor.

22. Secondly and in any event, reliance by the Respondent on the expressions "contractor" and "contractor fee" in the agreement is precluded, in the circumstances, under a rule which emerges from the Privy Council's decision in Australian Mutual Provident Society v. Chaplin (1978) 18 ALR 385, which rule is to this effect. On the question of whether someone is an employee or an independent contractor, where any particular term or expression in an agreement is contradicted by the clear effect of the agreement as a whole, then it is such overall effect which governs. Here, the effect of the agreement as a whole points clearly to an employer-employee relationship.

23. In the result, I find that the Applicant sustained personal injury by accident arising out of and in the course of his employment with the Respondent. That entitles him to employee's compensation in accordance with the provisions of the Employees' Compensation Ordinance, Cap.282.

AMOUNT OF COMPENSATION DUE

24. I come now to assess the measure of such compensation.

25. All the references which I am about to make to sections are to ones in the Employees' Compensation Ordinance, Cap.282.

26. Compensation is claimed under three heads: (I) permanent partial incapacity under section 9; (ii) temporary incapacity under section 10; and (iii) medical expenses under section 10A.

27. The amount of compensation under sections 10 and 10A are agreed (subject to liability) at $18,589.00 and $1,608.00 respectively.

28. What I have to assess is the compensation due under section 9.

29. It is common ground that the Applicant's injury is not covered by the First Schedule. By virtue of subsection 1 (b) of section 9, the compensation due thereunder is therefore "such percentage of the compensation which would have been payable in the case of permanent total incapacity as is proportionate to the loss of earning capacity permanently caused by the injury in any employment which the employee was capable of undertaking at that time."

30. That means that one has to turn to section 7 which deals with compensation in cases of permanent total incapacity. It is common ground that the Applicant was 53 years of age at the time of his accident. That being so, it is subsection (1) (b) of section 7 which governs, dealing as it does with "the case of an employee of over 40 years of age but under 56 years of age at the time of the accident". As section 7(1) (b) stood at the time of the Applicant's accident, it provided that the compensation for permanent total incapacity for such an employee shall be "a lump sum equal to 72 months' earnings or $485,000, whichever is the less." (That sum of $485,000.00 has since been revised upwards to $620,000.00)

31. It is common ground that the Applicant's earnings at the time of his accident was $3,500.00 a month. That figure multiplied by 72 gives $252,000.00. That represents what would be due to the Applicant for permanent total incapacity.

32. The question now is what percentage of that figure is due to the Applicant for the permanent partial incapacity which he suffers: in other words, what is his permanent loss of earning capacity?

33. In a Certificate of Review of Assessment issued on 1st July 1992 by an Ordinary Assessment Board under section 16G (3), the Applicant's permanent loss of earning capacity is given as 19%.

34. He appeals to this Court under section 18 against that reviewed assessment. The appeal was dealt with in the course of this hearing. In support of his contention that his permanent loss of earning capacity is actually 30%, the Applicant called two doctors, Dr. Edmund Cheung and Dr. David Lee, both of whom have examined him and both of whom have given evidence, which I find convincing, that his permanent loss of earning capacity is 30%. They are the only medical men who testified before me. I accept their evidence. And I find that the Applicant's permanent loss of earning capacity is 30%, allowing his appeal in that regard accordingly.

35. The compensation due to the Applicant under section 9 is therefore 30% of $252,000.00, which comes to $75,600.00.

CONCLUSION

36. Accordingly, I award the Applicant compensation in the sum of ($18,589.00 + $1,608.00 + $75,600.00) $95,797.00.

37. I will now hear the parties on interest and costs.