DENG XIUMING (邓秀明) for herself and on behalf of the members of the family of WONG CHEUK KEUNG (黃灼强), deceased v. SO TSZ KIN t/a 溢星棚業 (蘇子健經營溢星棚業) AND OTHERS

DCEC 1142/2022

[2024] HKDC 975

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1142 OF 2022

____________________

____________________

——————————

JUDGMENT

——————————

1.  On 20 June 2022, the Applicant (“A”) commenced the present employees’ compensation proceedings against the 1^st and 2^nd Respondents (respectively “R1” and “R2”), for herself and on behalf of the members of the family of her husband, Wong Cheuk Keung (黃灼强) (the “Deceased”) who met with a fatal accident at the external wall of Flat 1, 6/F, Block A, Manhattan Plaza, 23 Sai Ching Street, Yuen Long, New Territories (the “Flat”) on 25 November 2021 and is survived by A (his lawful wife), his 4-year-old daughter, his parents and his elder brother 黃浩強 (“Wong”) (the “EC Action”).

2.  In the EC Action, A seeks compensation pursuant to section 6(1)(a) and (5) of the Employees’ Compensation Ordinance (Cap 282) (“ECO”).

3.  On 29 July 2022, R1 filed his Answer.

4.  R2 never filed an Answer. On 6 October 2023, interlocutory judgment on liability was entered against R2 as the principal contractor with compensation to be assessed. On the same day, the EC Action was fixed to be tried on 14 March 2024.

5.  On 5 December 2023, leave was granted to the Employees Compensation Assistance Fund Board to join as the 3^rd Respondent (“R3”) in the EC Action to contest the issue of quantum pursuant to section 25A(a)(v) of the Employees Compensation Assistance Ordinance (Cap 365) and Order 15 rule 6 of the Rules of the District Court.

6.  The trial of the EC Action came before me on 14 March 2024. On the date of the trial, R1 and R2 were absent. Having been satisfied that notice of this trial has been duly given to R1 and R2 by A’s solicitors[1], I proceeded with the trial in their absence.

7.  At trial, A only called herself[2] and her witness Pang Wai Kwong (彭偉光) (“Pang”)[3] to testify. Due to health reason, A’s other witness, Wong, was not called to give evidence and A rightly chose not to rely on Wong’s witness statement filed on 17 May 2023. R3 did not call any witness on the issue of quantum.

8.  After I heard the oral closing submissions of A and R3, I have reserved my judgment.

9.  This I now do.

BACKGROUND

10.  The following is the indisputable background of this case.

11.  R1 is the sole proprietor of a scaffolding business named “溢星棚業”[4] whilst R2 is the sole proprietor of a renovation business named “民華裝修工程公司”.

12.  The Flat is owned by a Madam Yeung Wai Fong (楊惠芳) (“Yeung”) who engaged R2 to perform renovation work in the Flat. The scope of the renovation work included refurbishment of partition walls, replacement of window frames and drainage U-pipes at the external walls and the renewal of electrical switches and home furniture of the Flat. As part of the renovation work, a truss-out scaffold was required to be erected on the external wall of the Flat for the replacement of the window frames and drainage pipes. The construction cost for the erection of the truss-out scaffold was HK$7,000.00.

13.  R1 was introduced to R2 by a mutual friend, Ng Yu Hon (伍裕漢) (“Ng”), to erect the truss-out scaffold.

14.  At the material time, R2 was the principal contractor responsible for the whole renovation work at the Flat.

15.  At about 2 pm on 25 November 2021, the Deceased and R1 arrived at the Flat to erect the scaffold. When they were carrying out the scaffolding work at the external wall of the Flat, the Deceased fell to the podium on the 2/F level of the building and sustained serious injuries (the “Fatal Accident”). He was certified dead at Tuen Mun Hospital the same day.

16.  At the time of the Fatal Accident, the Deceased was aged 32.[5]

17.  It seems that arising from the Fatal Accident, R1 submitted Form 2 to the Director of Labour Department on 30 November 2021.[6]

18.  The Labour Department conducted investigation into the Fatal Accident and obtained witness declarations / interview records from, inter alios, the following witnesses[7]: -

(a)  R2 on 26 November 2021 and 30 March 2022;

(b)  Ng on 29 November 2021 and 13 May 2022;

(c)  Sin Fung Ki (冼楓淇) (“Sin”)^[8] on 29 November 2021;

(d)  Lee Kwok Ho (李國豪) (“Lee”)^[9] on 30 November 2021;

(e)  Yeung on 4 December 2021;

(f)  A on 14 December 2021;

(g)  Pang on 14 December 2021;

(h)  Wong on 14 December 2021; and

(i)  R1 on 21 December 2021 and 31 March 2022.

19.  As a result of the investigation, the Labour Department issued 3 Summonses against R1 and 4 Summonses against R2 as follows: -

R1 (being the contractor who had direct control over the construction work / erection of the scaffold)

(a)  FLS 4462/2022 for failing to take adequate steps to prevent a person on a place where the construction work was being carried out from falling from a height of 2 metres or more contrary to Regs 38B(1A), 68(1)(a) and 68(2)(g) of Construction Sites (Safety) Regulations;

(b)  FLS 4463/2022 for failing to ensure that, so far as was reasonably practicable, suitable and adequate safe access to and egress from a place of work where the construction work was being carried out was provided and properly maintained contrary to Regs 38AA(2), 68(1)(a) and 68(2)(g) of Construction Sites (Safety) Regulations;

(c)  FLS 4464/2022 for failing to ensure that the scaffold was not erected except by workmen who were under the immediate supervision of a competent person contrary to Regs 38E(2)(b), 68(1)(a) and 68(2)(a) of Construction Sites (Safety) Regulations;

R2 (being the contractor responsible for the Flat / scaffold on the Flat)

(d)  FLS 4458/2022 for failing to take adequate steps to prevent a person on the site from falling from a height of 2 metres or more contrary to Regs 38B(1), 68(1)(a) and 68(2)(g) of Construction Sites (Safety) Regulations;

(e)  FLS 4459/2022 for failing to ensure that, so far as was reasonably practicable, suitable and adequate safe access to and egress from a place of work on the site was provided and properly maintained contrary to Regs 38A(2), 68(1)(a) and 68(2)(g) of Construction Sites (Safety) Regulations;

(f)  FLS 4460/2022 for failing to ensure that no such scaffold was erected on the site except by workmen who were under the immediate supervision of a competent person contrary to Regs 38E(1)(b), 68(1)(a) and 68(2)(a) of Construction Sites (Safety) Regulations; and

(g)  FLS 4461/2022 for failing to take all reasonable steps to ensure that no workmen remained on the site unless the workmen were wearing suitable safety helmets contrary to Regs 48(1)(b), 68(1)(a) and 68(2)(b) of Construction Sites (Safety) Regulations.

20.  On 15 November 2022, R2 pleaded guilty to Summonses FLS 4458/2022[10] and FLS 4460/2022[11] and admitted a set of brief facts for the 2 Summonses[12].[13] On the same day, R2 was convicted of the 2 Summonses and was fined HK$40,000 and HK$10,000 respectively.[14] The Prosecution offered no evidence against R2 in respect of the other 2 Summonses and the other 2 Summonses were dismissed.[15]

21.  R1 pleaded not guilty to Summonses FLS 4462/2022, FLS 4463/2022 and FLS 4464/2022. On 15 and 16 February 2023, those 3 Summonses were tried before Magistrate Ms Kelly Shui and R1 was acquitted of those 3 Summonses.[16]

ISSUES

22.  In R1’s Answer[17], R1 does not put forward a positive case and does not admit the following: -

(a)  The Deceased was an employee of R1 at the time of the Fatal Accident (“Issue (2)”);

(b)  The Deceased was in the course of employment with R1 at the time of the Fatal Accident (“Issue (3)”);

(c)  The occurrence and circumstances of the Fatal Accident (“Issue (1)”); and

(d)  The quantum (“Issue (4)”).

23.  As mentioned before, the only issue between A and R3 is the question of quantum. To be more precise, the only issue is the amount of the Deceased’s pre-accident monthly earnings applicable for computing compensation under section 6 of ECO.

ISSUE (1)

24.  The occurrence and circumstances of the Fatal Accident is indisputable. Although A and Pang in their evidence was unable to speak of the occurrence and circumstances of the Fatal Accident, there is nevertheless an abundance of evidence albeit hearsay in nature to substantiate A’s version of the happening of the Fatal Accident.

25.  If evidence is needed, one may look at Sin’s declaration made to the Labour Department dated 29 November 2021[18] and Lee’s declaration made to the Labour Department dated 30 November 2021[19]. There is no reason to doubt the veracity of their declarations and I rely on their declarations.

26.  More so, R1 in his declaration made to the Labour Department on 21 December 2021 admitted that on 25 November 2021, R1 and the Deceased were working inside the Flat to erect scaffold on the external wall thereof.

27.  I find on balance that the Fatal Accident happened in the way as pleaded.

ISSUE (2)

The Law

28.  The question of whether the injured person or deceased is an employee or not is one of the most fruitful sources of litigation under ECO. The starting point is section 2(1) of ECO which provides as follows: -

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

29.  On this issue, the Hong Kong Court of Final Appeal in Poon Chau Nam v Yim Siu Cheung t/a Yat Cheung Air Conditioning and Electric Co [2007] 1 HKLRD 951 revisited the previous principles and adopted the modern approach used by Mummery J in Hall v Lorimer. Ribeiro PJ said the following: -

“9. 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. They are obviously employees. However, in certain instances, the answer to the question whether an employer-employee relationship exists is elusive, as recognized by Lord Griffiths in Lee Ting Sang v Chung Chi Keung:

“This has proved to be a most elusive question and despite a plethora of authorities the courts have not been able to devise a single test that will conclusively point to the distinction [between an employee and an independent contractor] in all cases.”

…

16. It was in respect of the third condition that his Lordship explained how one party’s reservation of a right to control the manner of working could be overridden by economic or commercial realities which point to the other party being engaged as an independent contractor and not as an employee. This was illustrated by Dixon J’s decision in the Australian High Court in Queensland Stations Pty Ltd v Federal Commissioner of Taxation, which involved a drover employed to drove 317 cattle to a certain destination pursuant to a written agreement which included a term requiring him to obey and carry out all lawful instructions. This, Dixon J pointed out, could not “outweigh the countervailing considerations which are found in the employment by him of servants of his own, the provision of horses, equipment, plant, rations, and a remuneration at a rate per head delivered.” Such a “reservation of right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract”. Mackenna J also referred (among other authorities) to the decision of the United States Supreme Court in US v Silk, which involved the question whether men working for the plaintiffs were “employees” for the purposes the Social Security Act 1935, noting that there:

“The test was whether the men were employees ‘as a matter of economic reality.’ Important factors were said to be ‘the degrees of control, opportunities of profit or loss, investment in facilities, permanency of relation and skill required in the claimed independent operation.’”

17.  The other influential first instance decision is that of Cooke J in Market Investigations Ltd v Minister of Social Security. It earned the Privy Council’s accolade in Lee Ting Sang v Chung Chi Keung, where Lord Griffiths stated that their Lordships “agree with the Court of Appeal when they said that the matter had never been better put than by Cooke J” in that case. The passage approved of runs as follows:

“… 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?’ 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 that 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.”

18.  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.”

…

52.  … in my view, the only reasonable conclusion to be reached on the undisputed facts is that, in carrying out the Causeway Bay Plaza I assignment, the appellant was working for the respondent under a contract of service when the accident occurred.

53.  The air-conditioning business belonged to the respondent. The appellant’s venture into an air-conditioning business on his own account had failed some years previously. The respondent decided which, if any, jobs should be assigned to the appellant and paid him to do them at the daily rate of $550, plus any overtime. All the profits and losses of the business were for the respondent’s account. The appellant bore no financial risks and reaped no financial rewards beyond his daily-rated remuneration. The respondent managed the business and hired several other workers, some of whom would sometimes work alongside the appellant on a job. The appellant personally did the work assigned to him. He did not hire anyone to help. Travel expenses incurred in the course of the work were borne by the respondent who sometimes drove the appellant to the work site in his van, particularly where heavy equipment had to be transported there. Such equipment was owned by the respondent and not the appellant. Whenever items had to be purchased by the appellant for work purposes, he was reimbursed by the respondent, even where the amounts were very small. The appellant was a skilled air-conditioning worker and, like the others who were undoubtedly the respondent’s employees, did not require supervision or control over the manner of carrying out the work. So the control test is, in the circumstances, of little relevance. But the other indicia all point clearly to an employer-employee relationship entered into for each specific engagement. The main difference between the appellant and the other workers was that his employment was of a casual nature whereas theirs was permanent and paid on a monthly basis.”

30.  On casual workers, in Poon Chau Nam (supra), Ribeiro PJ had the following to say: -

“26.  As the Judge held and everyone accepted, the appellant had been engaged “on a casual as required basis”. It is therefore necessary to consider the provisions in the ECO dealing with persons casually employed, an exercise which the courts below did not adequately undertake.

27.  Although the drafting is somewhat convoluted, there is no doubt that the ECO covers most classes of persons in casual employment. This was accepted in Lee Ting Sang v Chung Chi Keung. As we have seen, section 2(1) of the ECO defines an “employee” as a person who works under a contract of service. It continues with a proviso which materially states as follows:

“Provided that the following persons are excepted from the definition of ‘employee’ … (b) any person whose employment is of a casual nature, and who is employed otherwise than for the purposes of the employer’s trade or business, not being a person employed for the purposes of any game or recreation and engaged or paid through a club and not being a part-time domestic helper.”

28.  The effect of that proviso is to include within the definition of “employee” for ECO purposes, a person working under a contract of service even if his employment is of a casual nature, provided that such casual employment is for the purposes of the employer’s trade or business. It is closely based on s 13 of the Workmen’s Compensation Act, 1906, which was similarly explained by Cozens Hardy MR in Hill v Begg:

“If a man for the purposes of his trade or business employs another, it matters not that the employment is of a casual nature, such as, for example, that of a dock labourer, and the man so employed is a ‘workman’ within the meaning of the Act.”

29.  The ECO provides a mechanism for calculating compensation where an injury is suffered in the course of casual employment. Compensation is generally calculated by reference to an employee’s monthly earnings, but obviously, it may be difficult to establish what such earnings are in the case of a casual employee. Section 11(2) accordingly provides:

“(2) Where by reason … of the casual nature of the employment, … it is impracticable to compute the rate of remuneration of such employee at the date of the accident, regard may be had to the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of similar earning capacity in the same grade employed at the same work by the same employer, or, if there is no person so employed, by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district.”

30.  The ECO furthermore recognizes that a casual employee may find work with more than one employer and addresses the calculation of compensation in such cases:

“Where the employee had entered into concurrent contracts of service with 2 or more employers under which he worked at one time for one such employer and at another time for another such employer, his monthly earnings shall be computed as if his earnings under all such contracts were earnings in the employment of the employer for whom he was working at the time of the accident: [subject to provisos of no present relevance].”

31.  These provisions are also modelled on the UK’s Workmen’s Compensation Act 1906. In the related case-law, casual workers were routinely regarded as covered by the Act notwithstanding that there was obviously no mutual obligation between the employer and such workers for work to be provided or accepted. Thus, in Perry v Wright the successful claimant “had no regular employment, but worked some days for one firm and some days for another, just as a job turned up”. Similarly, in Cue v Port of London Authority it was said of the claimant that: “He was only employed by the employers when there was a job and a vacancy, and there was no obligation on him to work for them, and no obligation on them to employ him.” In Manton v Cantwell, Lord Birkenhead LC, stated without qualification: “… if a man be employed for the purposes of the trade or business the employer is liable to him even though the employment be of a casual nature.”

32.  There is similarly nothing in the ECO to suggest that a mutual obligation to supply and take up work must exist before a worker qualifies as an employee. On the contrary, the Ordinance recognizes that casual work is by its nature irregular, with gaps occurring between stints when there is work, and provides a mechanism for determining compensation based on notional monthly earnings using external evidence of comparable remuneration. It also recognizes that such workers may find stints of work with more than one employer. These are clearly provisions designed to operate where the parties are not mutually obliged to offer and take up work.

33.  These ECO provisions were not drawn to the Judge’s attention. This is pointed out by Woo V-P, but his Lordship does not go on to discuss their significance. Properly understood, such provisions weigh heavily against the suggestion that absence of a mutual obligation to supply and accept work removes the appellant from the ECO’s ambit.”

The Evidence and My Findings

31.  A has adopted her witness statement and supplemental witness statement as her evidence in chief and on this issue, given the following evidence: -

(a)  The Deceased had no steady company to attend work. Generally, it was through the introduction of the bosses of decoration companies or construction workers that the Deceased attended different construction sites to do the casual scaffolding work, commonly referred to as “長散工”.

(b)  The Deceased worked as scaffolding master on the construction sites. His wages were daily rated. At the time of the Fatal Accident, his daily wage was HK$2,200, he worked 22 days per month and his average monthly wages were about HK$48,400.

(c)  Whenever the Deceased attended construction sites to carry out scaffolding work, he would for record purpose write down the dates of work, the work hours and the location of work etc. in a book of record^[20] (the “Written Salary Record”). A also appended a copy of the Written Salary Record as “DXM-1” to her witness statement.^[21] A said in viva voce evidence that the Written Salary Record was kept in a cabinet at home and that she often saw the Deceased took out and wrote in the Written Salary Record. In the Written Salary Record, the Deceased used “一工” or “半工” as a unit or half unit to calculate the amount he earned on a particular workday.

(d)  On 24 November 2021, the Deceased told A that he would attend Tai Wai to help a father and son (one was called Tsz Kin) work on 25 November 2021 and a few days immediately thereafter.

(e)  The Deceased was a scaffolding master, not a boss. He did not have his company. He was introduced by decoration company bosses or construction colleagues to attend different construction sites and buildings to do the scaffolding work.

(f)  She recollected what Wong had told her about what Pang had told him about R1 and the Deceased and the Fatal Accident on the night of 27 November 2021. This is multiple hearsay evidence, but tallies with the evidence of Pang.

(g)  She appended a copy of the Deceased’s mobile telephone record as “DXM-2” to her supplemental witness statement^[22], recording the telephone calls between the Deceased and R1 on 30 April 2021 and the period from 15 to 25 November 2021.

(h)  She also appended a copy of the WeChat message record (the “WeChat Record”) as “DXM-3” to her supplemental witness statement^[23], recording the messages exchanged between the Deceased and her on 17 and 18 November 2021. In one of the messages sent by the Deceased, he referred to R1 as boss. In re-examination, A said that the Deceased had told her that R1 was his boss.

32.  Pang has adopted his witness statement as his evidence in chief and on this issue, given the following evidence: -

(a)  Pang knew the Deceased for more than 10 years. The Deceased was Pang’s former colleague and old friend. Pang was the Deceased’s very good friend and in frequent contact with him.

(b)  Pang began to know R1 when he moved to Sun Fai Scaffolding Company (新輝搭棚公司) to work as scaffolding technician in 2010.

(c)  After R1 and his father ceased working as worker, they opened their construction company, specializing in scaffolding work. Since their company was a family company, they often employed casual scaffolding workers to work for their company.

(d)  The Deceased had all along worked as a causal worker, working for different construction companies. He was not employed by a particular company. R1 had employed the Deceased as scaffolding worker in the manner of a “long term casual technician” at a recent daily wage of HK$2,200.

(e)  In recent years, Pang had heard the Deceased saying that “I seek R1 for payment of wages”.

(f)  On 24 November 2021, Pang had talked to the Deceased over the phone during which the Deceased told him that R1 sought him out and that he would work for R1 these few days.

(g)  The last time Pang saw the Deceased was a week before the Fatal Accident.

(h)  Pang had never been employed by R1 or his company to work in any kind of job.

(i)  Pang was told that the amount of wage the Deceased earned from the companies which employed him was HK$2,200 per day.

33.  I accept that A and Pang are credible witnesses. I also accept their evidence except the part relating to the daily wage of the Deceased. I don’t think that the daily wage of the Deceased was HK$2,200 at the time of the Fatal Accident and that the Deceased worked 22 days per month on the ground that this piece of evidence has no supporting documentation and, as R3’s counsel has rightly submitted, contradicts the following: -

(a)  The Written Salary Record, recording that the Deceased was paid a daily wage of HK$2,000 on 2 and 3 November 2018^[24] and a daily wage of HK$1,800, HK$1,900 and 2,000 in July and August 2019^[25];

(b)  The employment contract with 展藝工程有限公司 dated 22 January 2018, stipulating that the Deceased earned a daily wage of HK$1,800 starting from 22 January 2018^[26]; and

(c)  The notification issued by the Inland Revenue Department to the Deceased to pay salary tax for 2017/18 dated 2 August 2019, stipulating that the Deceased earned a total of HK$280,000 for the year of 2017/18^[27].

34.  Yeung, in her declaration to the Labour Department dated 4 December 2021[28], stated the following: -

(a)  R2 was responsible for the renovation of the Flat.

(b)  In relation to the renovation of the Flat, she did not enter into any construction contract with R2, but only obtained a written quotation from R2^[29] (the “Written Quotation”) and appended to her declaration a copy of the Written Quotation.

(c)  She did not instruct other construction company to be responsible for the renovation of the Flat.

(d)  She only dealt with R2.

35.  R2, in his declaration to the Labour Department dated 26 November 2021[30], stated the following: -

(a)  R2 had not applied for business registration for his decoration company (民華裝修工程公司).

(b)  R1 was introduced to him by a common friend, Ng.

(c)  Before the Fatal Accident, R2 through Ng had co-operated with R1 once or twice. As regards payment, R2 would ask Ng to transfer the construction fees to R1 first and R2 would reimburse Ng later.

(d)  R2, also through Ng, subcontracted the scaffolding work at the external wall of the Flat to R1. R2 would calculate and pay R1’s construction fees in one go after R1 completed the work.

(e)  R2 had never seen the Deceased before the Fatal Accident. He only knew that the Deceased was a worker whom R1 brought to the Flat to carry out the scaffolding work.

(f)  Ng did not charge any fee for introducing R1 to R2.

36.  Ng, in his declarations to the Labour Department dated 29 November 2021[31] and 13 May 2022[32], confirmed what had been stated by R2 in his declaration and said that he did not know the Deceased who was brought to the Flat by R1 to carry out the scaffolding work.

37.  R1, in his declaration to the Labour Department dated 21 December 2021[33], stated the following: -

(a)  R1 subcontracted the scaffolding work at the external wall of the Flat from R2 via the introduction of Ng.

(b)  The Deceased was beside R1 and listened when R1 was liaising with Ng over the phone on the aforesaid scaffolding work.

(c)  But for the Deceased saying that he had time to subcontract with R1 the aforesaid scaffolding work, R1 would not have agreed with Ng to subcontract the aforesaid scaffolding work.

(d)  R1 and the Deceased jointly subcontracted the aforesaid scaffolding work and were responsible for providing the truss-out frame, scaffold materials and working tools.

(e)  After completion of the aforesaid scaffolding work,

(i)  R1 would find a qualified person to inspect and issue a valid certificate for the scaffold constructed; and

(ii)  R1 would ask the Deceased to contact Ng to collect the construction fee for the aforesaid scaffolding work.

38.  There is no reason to doubt the credibility of Yeung, Ng and R2 when they were making their declarations to the Labour Department. The content of their declarations is consistent with each other. I accept the content of their declarations as truth.

39.  I have reservation about R1’s declaration, in particular on the part relating to that both R1 and the Deceased jointly subcontracted the aforesaid scaffolding work from R2 and that after completion of the aforesaid scaffolding work, the Deceased would contact Ng to collect the construction fee. This evidence runs counter to the evidence of Ng and R2 that R2 subcontracted the aforesaid scaffolding work to R1 and that R2 would calculate and pay R1’s construction fees in one go after R1 completed the work. The subcontracting relationship, according to R2 and Ng, was that between R1 and R2, not that between R1 and the Deceased of the one part and R2 of the other. At any rate, R2 and Ng did not know the Deceased prior to the Fatal Accident and it was R1 who brought the Deceased onto the Flat as his worker who, according to the Written Salary Record, would be paid by R1 “一工” or “半工” wage per day. I do not accept the content of R1’s declaration on this aspect.

My Views

40.  It is clear from the proven evidence and I find as follows: -

(a)  At the material time, R1 was carrying on the scaffolding business on his own account. He ran the business as sole proprietor.

(b)  Through the introduction of a common friend Ng, R1 subcontracted from R2 the scaffolding work at the external wall of the Flat. Under the Written Quotation by R2 to Yeung, the construction fee for the scaffolding work was about HK$7,000. After R1 completed the aforesaid scaffolding work, R2 would calculate and pay R1’s construction fees in one go.

(c)  On the date of the Fatal Accident, R1 selected the Deceased and brought him onto the Flat as his worker and the Deceased would be paid a daily wage. In fact, the Deceased had all along been working as a casual worker and paid salary tax on his earnings. He had worked as R1’s worker prior to the Fatal Accident. According to the Written Salary Record, the Deceased had worked for R1 as casual worker from time to time in late 2018, 2019 and 2020^[34] and, according to the WeChat Record, the Deceased called R1 as boss.

(d)  Prior to the Fatal Accident, R2 and Ng did not know the Deceased.

(e)  There is nothing to suggest that the Deceased was working in a capacity other than as a casual worker for R1.

(f)  The Deceased did not have to bear any financial risk or management responsibilities.

41.  In my view, all the indicia in this case point overwhelmingly to an employer-and-employee relationship between R1 and the Deceased. When I stand back from the detailed picture painted from the accumulation of detail, the overall effect, as a matter of overall impression, is that the relationship between R1 and the Deceased was one of employment.

42.  Accordingly, I find that at the time of the Fatal Accident, the Deceased was R1’s employee.

ISSUE (3)

43.  Under section 5(4) of ECO, 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.  As a corollary of my findings on issues (1) and (2), it must follow that the Fatal Accident arose out of and in the course of the Deceased’s employment with R1, and I therefore so find.

ISSUE (4)

The Law

44.  As to the quantum of compensation in fatal cases, section 6(1)(a) and 6(5) of ECO provides as follows: -

“(1) Where death results from the injury, then, subject to section 6A, the amount of compensation payable to the members of the family of the employee shall be —

(a) in the case of an employee under 40 years of age at the time of the accident, a lump sum equal to 84 months’ earnings or 84 times the amount specified in the second column of the Sixth Schedule shown opposite section 6(1)(a) specified in the first column of that Schedule, whichever is the less;

…

(2) The amount of compensation payable under subsection (1) shall in no case be less than the amount specified in the second column of the Sixth Schedule shown opposite section 6(2) specified in the first column of that Schedule.

…

 (5)       Where death results from the injury, reimbursement of the reasonable expenses of the funeral of the deceased employee and the reasonable expenses of medical attendance on the deceased employee, not exceeding in all the sum of the amount specified in the second column of the Sixth Schedule shown opposite section 6(5) specified in the first column of that Schedule, shall be paid by the employer to any person who has paid the expenses.”

The Amount of Compensation Payable to Family Members

45.  In the present case, the statutory minimum amount of compensation under section 6(2) of ECO is HK$473,610.00[35] at the time of the Fatal Accident.

46.  At the time of the Fatal Accident, the Deceased was aged 32. The statutory maximum amount of compensation would be HK$2,990,400.00 (HK$35,600.00[36] × 84).

47.  Section 11 of ECO sets out the method of calculating the monthly earnings of an employee at the time of the accident. Section 11(1) and (2) of ECO is pertinent to the present case which reads as follows: -

“(1) Subject to this section, for the purposes of this Ordinance the monthly earnings of an employee at the time of the accident shall be the earnings —

(a) for the month immediately preceding the date of the accident; or

(b) computed in such manner as is best calculated to give the rates per month at which the employee was being remunerated during the previous 12 months if he has been so long employed by the same employer, but, if not, then for any lesser period during which he has been employed by the same employer,

whichever calculation is more favourable to the employee.

…

(2)  Where by reason of the shortness of the time during which an employee has been in the employment of his employer or of the casual nature of the employment, or of the terms of employment, it is impracticable to compute the rate of remuneration of such employee at the date of the accident, regard may be had to the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of similar earning capacity in the same grade employed at the same work by the same employer, or, if there is no person so employed, by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district.”

48.  Section 11(1) of ECO offers a benefit to the employee of having compensation assessed either on the earnings for the month immediately preceding the date of the accident or on the earnings best calculated on the basis of the remuneration having been received in the previous 12 months, and if the duration of work is less than 12 months in the same employment, the earnings best calculated for the month during the lesser period, whichever calculation is more favourable.

49.  Section 11(1) of ECO can only be engaged if the employee has been employed by the same employer for at least 1 month immediately preceding the accident.[37]

50.  Since the Deceased had not been employed by R1 for even 1 day immediately preceding the Fatal Accident, section 11(1) of ECO is inapplicable. In fact, the date of the Fatal Accident was the first day the Deceased and R1 attended the Flat to carry out the scaffolding work at the external wall thereof.[38]

51.  Section 11(2) of ECO states that by reason of the shortness of the time or the casual nature or terms of employment and if it is impracticable to compute the rate of remuneration at the date of the accident, reference may be made to the average monthly amount earned by a person of similar capacity in the same grade employed at the same work by the same employer, or if no person is so employed, by a person of similar capacity in the same grade in the same class of employment and in the same district.

52.  Under the first limb of section 11(2) of ECO, A may refer to the earnings of a comparable employee employed by the same employer. In the present case, A has not adduced any evidence on this aspect. Hence, A cannot engage the first limb of section 11(2) of ECO.

53.  In the present case, A can pray aid to the second limb of section 11(2) of ECO since under the second limb of section 11(2) of ECO, the employee is entitled to use his previous earnings as the basis for calculating quantum provided that the nature of employee’s work prior to the accident was the same as that at the time of the accident.[39]

54.  Under the second limb of section 11(2) of ECO, the relevant question here is how much the Deceased had earned as scaffolder during the 12 months previous to the Fatal Accident.

55.  A has claimed that at the time of the Fatal Accident, the Deceased was earning HK$2,200 per day and was working 22 days per month. Therefore, the Deceased’s average monthly earnings were about HK$48,400.[40] I have already rejected this piece of A’s evidence.[41]

56.  On 30 April 2021, the Deceased met with another industrial accident when he was under the employment of Super Star Construction Engineering Ltd (“Super Star”).[42] After expiry of his sick leave on 15 November 2021[43], the Deceased had returned to work on 17 November 2021[44]. Of note is that employees’ compensation received from a previous industrial accident should not be included in the earnings of the workmen when computing compensation for a subsequent accident. [45] Therefore, the employees’ compensation received from the previous accident when the Deceased was employed by Super Star should not be included as part of the Deceased’s 12-month pre-accident earnings. I agree with R3’s submission that to compute pre-accident earnings, only the working days between November 2020 and April 2021 should be taken into account.

57.  In the Form 2 submitted by Super Star to the Labour Department on 13 May 2021, Super Star reported that the Deceased’s March and April 2021 wages were HK$45,050 and HK$42,500 respectively.[46]

58.  According to the Amendment of Information Notification submitted by the Deceased to the Labour Department on 24 May 2021, the Deceased reported that he worked an average of 25 days per month and earned HK$42,500 in April 2021.[47] Hence, the daily wage earned by the Deceased in April 2021 was HK$1,700.

59.  According to the Written Salary Record, the Deceased worked 26.5 days in March 2021.[48] Again, the daily wage earned by the Deceased in March 2021 was also HK$1,700.

60.  According to the Written Salary Record, the Deceased did only 1 day of work in February 2021, no work in January 2021, 6 days of work in December 2020 and no work in November 2020.[49]

61.  In summary, the average number of workdays of the Deceased during the 12 months previous to the Fatal Accident (i.e. between November 2020 and April 2021) was 9.75 [(6 + 1 + 26.5 + 25) ÷ 6].

62.  For March and April 2021, the daily wage was HK$1,700. Insofar as February 2021 and December 2020 are concerned, there is no evidence as to the daily wage earned by the Deceased. I would adopt a daily wage based on statistics published by the Census and Statistics Department (the “Statistics”). According to the Statistics, the daily wage of a bamboo scaffolder for February 2021was HK$1,716.30 and for November 2020 was HK$1,766.50.[50]

63.  Accordingly,

(a)  the average monthly wages for the period from November 2020 to April 2021 would be HK$16,644.22 {[(6 × 1,766.50) + (1 × 1,716.30) + (26.5 × 1,700) + (25 × 1,700)] ÷ 6}; and

(b)  the amount of compensation payable under section 6(1)(a) of ECO to the members of the Deceased’s family would be HK$1,398,114.40 (16,644.22 × 84)

The Reimbursement of Reasonable Funeral and/or Medical Expenses

64.  At the time of the Fatal Accident, the statutory maximum of A’s claim under section 6(5) of ECO is HK$92,670.[51]

65.  A seeks reimbursement of a total sum of HK$71,348 being reasonable funeral and medical expenses incurred.[52] In §66 of A’s Opening Submissions, A referred to the documentation in support of A’s claim and the documentation can be found in Trial Bundle (2) at pp 520-528.

66.  All the supporting documentation relates to funeral expenses incurred for the Deceased. After perusing all the supporting documentation, I find the following: -

(a)  All items are reasonable funeral expenses.

(b)  The total sum added up is HK$68,858.^[53]

(c)  It was A who paid the funeral expenses.

67.  In §45 of A’s witness statement[54], A testified that Yan Chai Hospital had donated HK$20,000 to A for the funeral expenses incurred. I agree with A that donation from a third party usually a charity should not be deducted from the funeral expenses in an employees’ compensation case.[55] Otherwise, it would make a mockery of the generosity of the donors if the effect of the donations is to fund or to indemnify the employers / principal contractors / their insurers at the expense of those who need the money most.

68.  Accordingly, I would allow a sum of HK$68,858 as compensation to A for funeral expenses under section 6(5) of ECO.

Apportionment of Section 6(1)(a) of ECO Compensation

69.  The amount of compensation under section 6(1)(a) of ECO shall be payable only to eligible family members of the Deceased.

70.  Section 3 of ECO defines “member of the family” to include spouse, children and parents.

71.  The Seventh Schedule to ECO sets out detailed prescriptive rules for apportioning compensation among the members of the family of the deceased employee. In the present case, §6 of the Seventh Schedule to ECO is apposite.

“6. If the only eligible members of the family are or the eligible members of the family include —

(a) spouses or cohabitees, or any combination thereof;

(b) children; and

(c) parents or grandparents, or any combination thereof,

then, whether or not there is any other eligible member of the family —

(i) 45% of the compensation shall be paid to all of those spouses or cohabitees in equal amounts;

(ii) 45% of the compensation shall be paid to all of those children in equal amounts;

(iii) the remaining 10% of the compensation shall be paid —

(A) to all of those parents in equal amounts if there are no grandparents;

(B) to all of those grandparents in equal amounts if there are no parents; and

(C) in any other case, to all of those parents and grandparents such that 70% of that 10% is paid to all of those parents in equal amounts and 30% of that 10% is paid to all of those grandparents in equal amounts.”

72.  Accordingly, HK$1,398,114.40 shall be apportioned as follows: -

(a)  To A, HK$629,151.48 (45% of HK$1,398,114.40);

(b)  To the Deceased’s 4-year-old daughter, HK$629,151.48 (45% of HK$1,398,114.40);

(c)  To the Deceased’s parents, each HK$69,905.72 (half of 10% of HK$1,398,114.40).

CONCLUSION

73.  In the abovementioned premises,

(a)  I enter judgment on liability against R1;

(b)  the total amount of compensation to be awarded in the present case under ECO should be HK$1,466,972.40 (HK$1,398,114.40 + HK$68,858);

(c)  I enter judgment against R1 and R2 in that sum of compensation accordingly;

(d)  the total amount of compensation awarded shall be paid by R1 and R2 as follows: -

(i)    that HK$698,009.48 (HK$629,151.48 + HK$68,858) be paid to A;

(ii)  that HK$629,151.48 to the Deceased’s daughter be paid into Court to be invested, applied or otherwise dealt with for the benefit of the Deceased’s daughter in such manner as the Court shall think fit, and that application for such directions be made to the Court by the A’s solicitors within 7 days of the payment into court;

(iii)   that HK$69,905.72 be paid to the Deceased’s father; and

(iv)  that HK$69,905.72 be paid to the Deceased’s mother; and

(e)  On top of the compensation, A and the Deceased’s family members are entitled to interest. I shall award interest on the above sums at half of the judgment rate from the date of the Fatal Accident to date of judgment and thereafter at judgment rate until payment.

74.  As to costs, I make the following order nisi[56]: -

(a)  R1 and R2 do pay A’s costs of the EC Action on a party and party basis, such costs to be taxed if not agreed with certificate for counsel;

(b)  R1 and R2 do pay R3’s costs of the assessment of compensation on a party and party basis, such costs to be taxed if not agreed with certificate for counsel;

(c)  There be no order as to costs between A and R3 (including all costs reserved);

(d)  A’s own costs to be taxed in accordance with the Legal Aid Regulations.

75.  A shall file with the Court a draft Order reflecting the foregoing order pronounced by this judgment for the Court’s approval within 14 days from the date of this judgment.

76.  This judgment is handed down in English as submissions were made to me in English. However, R1 and R2 may liaise with the court clerk within 14 days upon receipt of this judgment to arrange for interpretation by a court translator at the District Court. The court clerk shall notify R1 and R2 of this liberty by a letter in Chinese.

77.  Lastly, I would like to thank counsel for their assistance.

[1] See the 4^th Affirmation of Wong Wing Hong (the process server) filed on 11 March 2024.

[2] See A’s witness statement filed on 17 May 2023 (See Trial Bundle (1) at pp 44-77) and supplemental witness statement filed on 12 June 2023 (see Trial Bundle (1) at pp 78-88).

[3] See Pang’s witness statement filed on 17 May 2023 (See Trial Bundle (1) at pp 89-96).

[4] According to the business registration information, R1 commenced the scaffolding business on 4 June 2012 and ceased the business on 1 December 2021, see Trial Bundle (1) at 126-128.

[5] See Trial Bundle (1) at p 106.

[6] The signature, name and position of the person who submitted the Form 2 were covered up / blanked out, see Trial Bundle (1) at pp 136-143. But on a reading of the contents in the relevant context, the person who submitted the Form 2 should be R1.

[7] At trial, counsel for A and R3 agreed that the witness declarations / interview records made to the Labour Department were admissible in evidence and the Court was entitled to place whatever weight on the content thereof as the Court deems appropriate.

[8] Sin was at the material time a casual worker employed by R2 working inside the Flat at the time of the Fatal Accident.

[9] Lee was at the material time a casual worker employed by R2 working inside the Flat at the time of the Fatal Accident.

[10] See Trial Bundle (1) at pp 300-301.

[11] See Trial Bundle (1) at pp 304-305.

[12] See Trial Bundle (1) at pp 281-283.

[13] See Trial Bundle (1) at pp 321-325 (transcript).

[14] See Trial Bundle (1) at pp 321-325 (transcript), 314 & 316.

[15] See Trial Bundle (1) at pp 321-325 (transcript), 315 & 317.

[16] See Trial Bundle (1) at pp 326-391 (transcript), 318-320.

[17] See Trial Bundle (1) at pp 21-22.

[18] See Trial Bundle (1) at pp 181-191.

[19] See Trial Bundle (1) at pp 199-205.

[20] From April 2015 to April 2021.

[21] See Trial Bundle (1) at pp 61-76.

[22] See Trial Bundle (1) at pp 82-85.

[23] See Trial Bundle (1) at p 87.

[24] Trial Bundle (2) at p 402.

[25] Trial Bundle (2) at p 404.

[26] Trial Bundle (2) at pp 408-41, in particular at p 409.

[27] Trial Bundle (2) at pp 416-417.

[28] Trial Bundle (1) at pp 206-211.

[29] Trial Bundle (1) at pp 208-209.

[30] Trial Bundle (1) at pp 171-178.

[31] Trial Bundle (1) at pp 192-195.

[32] Trial Bundle (1) at pp 196-198.

[33] Trial Bundle (1) at pp 212-216.

[34] See Trial Bundle (1) at pp 71-75.

[35] According to L.N. 42 of 2021.

[36] According to L.N. 42 of 2021.

[37] See Lai Cheung Kwong v Lo King Sum [2008] 3 HKLRD 643 at §§6-8 & 12; Or Wing Ming v Ho Bing Chi [2008] 4 HKLRD 337 at §24.

[38] See R2’s declaration to the Labour Department dated 26 November 2021, §2 (Trial Bundle (1) at p 171); for law, see Lai Cheung Kwong v Lo King Sum (supra) at §§1 & 10-11.

[39] See Lai Cheung Kwong v Lo King Sum (supra) at §§11 & 13-16.

[40] See A’s witness statement, §11 (Trial Bundle (1) at p 48).

[41] See paragraph 33 hereinabove.

[42] See Trial Bundle (2) at pp 506-516.

[43] See Trial Bundle (2) at p 515.

[44] See Trial Bundle (1) at p 135.

[45] See Perry v Wright [1908] 1 KB 441, at pp 455, 467-468.

[46] See Trial Bundle (2) at p 509.

[47] See Trial Bundle (2) at p 514; Super Star also reported that the Deceased received an income of HK$42,500 from Super Star for the period from 1 to 30 April 2021, see Trial Bundle (2) at p 418.

[48] See Trial Bundle (1) at p 76.

[49] See Trial Bundle (1) at pp 75-76.

[50] See Trial Bundle (2) at p 505.

[51] According to L.N. 42 of 2021.

[52] See A’s Opening Submissions dated 4 March 2024 at §66.

[53] This amount is consistent with A’s evidence that approximately HK$60,000 odd was incurred on the funeral of the Deceased, see A’s witness statement at §45 (Trial Bundle (1) at p 58).

[54] See Trial Bundle (1) at p 58.

[55] See Mak Chan Hing for herself and members of the family of Mak Shing Kau, deceased v Wong Kwok Wah t/a Peng Chin Co and Ip Hon Kuen, DCEC 840/2014, (Unreported), 4 September 2015 at §§29-33.

[56] The costs order nisi will be made absolute 14 days from the date of the handing down of this judgment if no application is made to vary it.