SHEK KAM CHING v. PO KEE CONSTRUCTION ENGINEERING LTD. AND OTHERS

HCPI 434/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 434 OF 2001

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J U D G M E N T

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The Background

1. The plaintiff was a steel bender employed by the 3rd Defendant who sub-contracted works from the 1st Defendant, who in turn was a sub-contractor of the 2nd Defendant, the principal contractor. He started working for the 3rd Defendant on 5 September 1998. He sprained his back while lifting up a steel rod weighing 150 to 160 catties with his colleague on 18 September 1998. He suffered a small prolapsed intervertebral disc at L5/S1 level. He was given 26 months sick leave. As a result of the injury, he was unable to return to his original work. He sued the Defendants in negligence. His claim against the 3rd Defendant is based on the 3rd Defendant's breach of duty of care owed to him as employer, while his claim against the other two Defendants is based on their breach of duty of care as superior contractor or principal contractor.

2. By default, judgment on liability was entered against the 3rd Defendant for damages to be assessed and costs to be taxed. The case against the 1st and 2nd Defendants was set down for hearing on 19 November 2002. Notices claiming contribution were issued by the 1st and 2nd Defendants to the 3rd Defendant and also by the 2nd Defendant to the 1st Defendant. In the meantime, the 2nd Defendant's insurer, HIH Insurance (Asia) Limited, declared insolvent. It became apparent that any compensation awarded would have to be met by the Employees Compensation Assistance Fund ("ECAS").

3. At the hearing, the 1st Defendant did not appear. During the course of the hearing, the proceedings against the 2nd Defendant was stayed in accordance with the terms of a Tomlin Order reached between the respective parties by consent. The outstanding issues in these proceedings are the question of liability as against the 1st Defendant and quantum.

1st Defendant's duty of care

4. The Plaintiff was interviewed by the 3rd Defendant. He was assigned to work in a team of three led by a master, Chan Keung, whom he believed to be an employee of the 3rd Defendant. He was paid his salary by the 3rd Defendant. There is no dispute that the Plaintiff was an employee of the 3rd Defendant. Counsel for the Plaintiff, Mr Wong, said that there is no evidence of the relationship between the 1st and 3rd Defendants and that the Plaintiff in his position as an employee for only two weeks was unable to offer evidence of the nature of that relationship. He referred to the Notice of Accident issued by the employer under section 15 of the Employees' Compensation Ordinance ("Form 2") submitted by the 2nd Defendant as the principal contractor to the Commissioner for Labour, in which the 2nd Defendant as principal contractor reported that the 1st Defendant was the employer of the Plaintiff. On that basis, he submitted that the 1st Defendant in representing itself as the employer of the Plaintiff reflected that it took a more active role than the 3rd Defendant in the management of the personnel and staff of the 3rd Defendant and is liable as a joint tortfeasor with the 3rd Defendant towards the Plaintiff. He relied on the following dicta of Lord Keith in Ferguson v Welsh and Others [1987] 3 All ER 777 at 783 as the authority in support of the proposition that the 1st Defendant was under a duty to ensure a safe system of work was in place in the construction site in which he was an occupier:

"It would not ordinarily be reasonable to expect an occupier of premises having engaged a contractor whom he has reasonable grounds for regarding as competent, to supervise the contractor's activities in order to ensure that he was discharging his duty to his employees to observe a safe system of work. In special circumstances, on the other hand, where the occupier knows or has reason to suspect that the contractor is using an unsafe system of work, it might well be reasonable for the occupier to take steps to see that the system was made safe."

5. Despite the ingenuity of his argument, the Plaintiff's case against the 1st Defendant is fraught with difficulties. To start with, the Form 2, which counsel relied upon, was not prepared by the 1st Defendant but by the 2nd Defendant. Hence the representation that the 1st Defendant was the Plaintiff's employer was not made by the 1st Defendant. In reality, in a construction site, there are various levels of sub-contractors between the principal contractor and the injured employee. Some of these sub- contractors may not even be known to the principal contractor. When an industrial accident occurred at a construction site, it is not uncommon for the principal contractor to misidentify a superior sub-contractor as the direct employer of an injured employee. Thus little weight could be attached to this hearsay evidence contained in Form 2 and the inference that the 1st Defendant was actively involved in the management of the personnel and affairs of the 3rd Defendant is a very tenuous one to be drawn. With that Mr Wong's argument must fail.

6. Furthermore, there is nothing to suggest that the 3rd Defendant engaged by the 1st Defendant was incompetent nor is there any evidence that the 1st Defendant knew or had reason to suspect that the 3rd Defendant was using an unsafe system of work. There is no special circumstances to justify a departure from the general rule that a principal contractor, or a superior sub-contractor, is not liable for his sub-contractor's breach of duty of care owed to the sub-contractor's own employees. For the above reasons, the Plaintiff's claim against the 1st Defendant must fail.

The injury

7. The Plaintiff suffered a small prolapsed intervertebral disc at L5/S1 level. He now complains about persistent pain at his lower back and hence, decreased job-related strength and tolerance in maintaining a particular work posture. After expiration of his sick leave, he had worked at a construction site for one day but had to give up because of persistent pain. Despite various attempts, he could not find suitable alternative employment and had to live on Comprehensive Social Security Assistance.

8. For the benefit of the 3rd Defendant, I take into account the surveillance videotape produced by the 2nd Defendant which showed that the Plaintiff had no difficulties in carrying out his ordinary activities and that the Plaintiff went to a construction site at 11:41 a.m. on 20 April 2000 and did not leave before 1:00 p.m. I accept the Plaintiff's explanation that the construction site he went to was the site office of the 2nd Defendant and he went there to deliver his sick leave certificate to the 2nd Defendant.

9. According to the Plaintiff's medical expert, Dr Lau Hoi Kuen, the prolapse was related to the accident while at work and the Plaintiff could not return to his pre-injury work. This is also agreed by the 2nd Defendant's medical expert, Dr Chu Yat Cho. I also accept the Plaintiff's evidence that while he has no difficulties walking and standing he has difficulties in maintaining a particular work posture for a long duration or to exert force with working.

10. The Plaintiff complained that the back pain also affected his sexual activities. That is not supported by any medical evidence. He also complained that he could not sit for long period for his majong game. However, the surveillance videotape showed that he could move about with no difficulties. He was also able to sit for long hours during the court hearing. In view of the small prolapse and his good recovery, I dismiss such complaints as an exaggeration.

11. Accordingly, I am satisfied that he could not return to his pre-injury work but I do not consider his ordinary daily activities are adversely affected.

Quantum

12. The Plaintiff was born on 4 March 1965 and was aged 33 at the time of the accident. He is now aged 37. He suffered a small prolapsed intervertebral disc at L5/S1 level and was given 26 months sick leave. He had a satisfactory recovery. There was absence of muscle spasm over his lower back. The straight leg raising test was satisfactory and his lordotic curvature was good. He still had limited range of movement of the spine and tenderness over the lower end of the right paraspinal muscle. Though he could not return to his pre-injury work, his ordinary daily activities are not adversely affected.

13. For pain, suffering and loss of amenities, Mr Wong submitted that an award of $200,000 to $250,000 is appropriate. He referred to Law King Sang v Law Yin Sang [1997] HKLY 437. In that case, the plaintiff sustained a disc prolapse at L4 and L5-S1 and was unable to sit or stand for long periods or swim or lift heavy objects. He was placed at less than the "serious injury" category and was awarded $375,000 for pain, suffering and loss of amenities. In Tang Shau Tsan v Wealthy Construction Co Ltd HCPI No. 1092 of 1998, the plaintiff who suffered a bulging disc at L4/5 level with nerve root impingement was awarded $300,000 for pain, suffering and loss of amenities. In Lai Ching v Wong Chiu Kwai HCPI No. 1192 of 1996, the plaintiff suffered a prolapsed disc at L4/5 level with compression of nerve root. He suffered low back pain after prolonged sitting, pain in the right leg aggravated by walking and weakness of the right foot. He was also awarded $300,000 for this head of damage.

14. The starting point for serious injury category is around $460,000: see Yu Kwok Wing [2001] 2 HKLRD 306 and Lawati Bhawani Bikram v Ting Kau Contractors Joint Venture CACV 3/2002. The injuries suffered by the Plaintiff fell short of the "serious injury" category. He had a good recovery with conservative treatment. Despite the prolapse, there was no compression of the nerve root. His conditions are much more satisfactory than those of the plaintiffs in the comparables referred to above. Having regard to the comparables, I award him $150,000 for pain, suffering and loss of amenities.

15. The Plaintiff claimed to be a steel bender earning $1,000 per day at the time of the accident. However, according to the letter dated 11 October 2002 from the Inland Revenue Department and his evidence in court, he had been employed as a factory worker for 19 months, an odd jobber for 10 months, a formwork workman for 3 and half months and an assembly worker for 4 and half months between 1 April 1993 and 14 August 1997. He had not filed any tax return for 1998/99 and had reported no income between 15 August 1997 and 31 March 1998 and between 23 October 1994 and 10 January 1996. He said he worked as a steel bender since 1995 and that as a steel bender he was not required to pay tax or file tax returns. I find such explanation utterly incredible. Looking at the pattern of his employment for the six years prior to the accident, I am not satisfied that he had been working as a steel bender on a regular basis prior to the accident. I am not sure if he was in regular employment at all since 15 August 1997. The most favourable view that I could form of him is that he was essentially a factory worker and that the two weeks when he was employed as a steel bender was just an occasional employment which he was not physically fit to undertake and should not have undertaken. Accordingly I assess his loss of earning on that basis.

16. On the basis of his tax returns, his average monthly income during the period from 12 December 1996 to 14 August 1997 was $177,613, i.e. about $850 per day. That was also his best reported income for the six years prior to the accident. Of course, since then wage rates decreased across the board. Having regard to the pattern of his employment as revealed by his tax returns for the six years prior to the accident, I assess his daily earning at the time of the accident to be only $800. That rate is consistent with his own evidence of what he earned as a formwork worker. He said he worked 25 to 26 days a month in large construction sites or 19 to 20 days a month in smaller sites. Given the unfavourable view I formed of his credibility, at least so far as his employment history is concerned, I assess his monthly income to be $15,200 ($800 x 19). Based on the above, I assess his loss of earnings during his 26 months sick leave to be $395,200.

17. While he could not return to his pre-injury work, whether as a steel bender or construction site worker, he should mitigate his loss by taking up alternative employment as a waiter or watchman, earning $8,000 per month, as suggested by his counsel. I consider six months after expiration of his sick leave a reasonable period for him to come to realise his disability and to find alternative employment. I adopt a multiplicand of $7,200 ($15,200 - $8,000). Based on the above, I assess his loss of earning from expiration of his sick leave until trial to be $220,800 ($15,200 x 6 + $7,200 x 18). Accordingly, I assess his pre-trial loss of earnings to be $616,000 ($395,200 + $220,800).

18. The Plaintiff was 33 years of age at the time of the accident and is now 37 years old. Adopting a multiplicand of $7,200 and a multiplier of 12, I assess his future loss of earnings to be $1,036,800 ($7,200 x 12 x 12).

19. The Plaintiff claims for loss of benefit under the Mandatory Provident Fund Scheme (MPF). This loss is represented by the contribution which his employer would have made until the Plaintiff attains retirement age. As his loss of monthly income is less than $20,000, his loss of the benefit is 5% of his loss of income. I assess his loss of benefit under the MPF from 1 December 2000 to 18 May 2001 to be $4,241.29 ($15,200 x 5 18/31 x 5%), from 19 May 2001 to date of judgment (i.e. 28 November 2002) to be $6,600 ($7,200 x 18 10/30 x 5%) totalling $10,841.29 and his loss of MPF for future earning to be $51,840, being 5% of his future loss of earnings.

20. As for loss of earning capacity, having regard to the multiplier and his satisfactory recovery, I consider an award of 6 months income from his alternative employment appropriate. I therefore award him $48,000 ($8,000 x 6).

21. The Plaintiff claimed other expenses of $19,596. I allow his claim for one outstanding reimbursement of the cost of a treatment at Alice Ho Miu Ling Nethersole Hospital on 11 January 2002 in the amount of $44. He claimed travelling expenses by taxi to and from hospital and clinic. As public light buses were conveniently available, I allow 25% of this head of claim in the amount of $1,652, which would provide for his public light bus fares plus occasional trips by taxi when the circumstances required.

22. I disallow his claim for the costs of treatment by bone setter and associated travelling expenses and claim for tonic food and herbal ointment as such are ineffective for disc prolapse.

23. I award the Plaintiff interest for general damages at the rate of 2% from the date of amended writ (i.e. 19 November 2001) to the date of judgment in the amount of $3,082.19 ($150,000 x 1 10/365 x 2%); and interest for special damages at half of the judgment rate from the date of the accident, in the amount of $107,174.22 i.e. ($616,000 + $10,841.29 + $1,696.00) x 4.0625% p.a. x 4 72/365 years.

24. Credit shall be given to the amount of $684,152.39 being employees' compensation received by the Plaintiff.

25. The total award is therefore:

(1) Pain, suffering and loss of amenities:	$	150,000.00
(2) Pre-trial loss of earnings:	$	616,000.00
(3) Loss of future earnings:	$	1,036,800.00
(4) Pre-trial loss of MPF benefits:	$	10,841.29
(5) Post-trial loss of MPF benefits:	$	51,840.00
(6) Loss of earning capacity:	$	48,000.00
(7) Other expenses:	$	1,696.00
(8) Interest for general damages:	$	3,082.19
(9) Interest for special damages:	$	107,174.22
Total:	$	2,025,433.70
Less Employees' Compensation received:	$	684,152.39
Balance:	$	1,341,281.31
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26. I therefore enter judgment in favour of the plaintiff against the 3rd defendant in the amount of $ 1,341,281.31 with interest at judgment rate and costs to be taxed if not agreed. The plaintiff's own costs to be taxed in accordance with Legal Aid Regulations. The plaintiff's claim against the 1st defendant is dismissed with no order as to costs. As the proceedings against the 2nd Defendant have been stayed and the Plaintiff's claim against 1st Defendant has been dismissed, there is no need to make any order on contribution.