NGAI CHU v. LAU PONG CHUN t/a YAU PONG CONSTRUCTION

CACV 402/2004

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 402 OF 2004

(ON APPEAL FROM DCEC NO. 801 OF 2003)

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REASONS FOR JUDGMENT

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Hon Ma CJHC :

1. I agree with the reasons contained in the judgment of Cheung JA for allowing the present appeal.  I wish only to emphasise one point.  In my view, there has been a failure on the part of the respondent to comply with his obligations as to discovery :- see paragraphs 16 and 17 below.  Where relevant, and a fortiori crucial, documents are not discovered, quite apart from this being a breach of a party’s obligations in a civil action (as well as the professional obligations of his legal representatives where they are aware of this), this failure may well often result in a court making adverse findings as to that party’s credibility in the area where the failure has taken place.

Hon Cheung JA :

2. On 8 November 2005, this Court allowed the applicant’s appeal and gave judgment for him in the sum of $57,342 which was a sum agreed upon by the parties together with interest and costs below and of this appeal.  These are my reasons for the judgment.

Facts

3. The applicant claimed employees’ compensation from the respondent in respect of an injury he sustained during work on 24 April 2002.  His claim was dismissed by HH Judge Wesley Wong.  He appealed against the judgment.

4. The applicant’s claim is a simple one.  Since mid March 2002 he was employed by the respondent to do work at various construction sites.  On 24 April 2002, he worked at a site in Shan Ha Village in Yuen Long building a brick wall.  The owner of the site was China Overseas Machinery Ltd. (‘COML’).  The applicant had started this work on 22 April 2002.  In the morning of the accident he was pushing a wheelbarrow full of bricks up a slope when the wheelbarrow toppled and its right hand side handle struck his chest.  He felt painful and had to sit down and rest.  He told two of his co-workers namely Ah Nam and Wong Kam Shing about the accident.  Wong Kam Shing applied bonesetter lotion to his chest while Ah Nam telephoned the respondent who told Ah Nam not to report the accident to the Labour Department.  Ah Nam was in charge of the applicant and Wong Kam Shing.  The applicant remained at the site until the afternoon when he could not withstand the pain and had to attend the Emergency Department of the Tuen Mun Hospital.  He was found to have two fractured ribs and was granted six days of sick leave.  He called up Ah Nam to tell him he was granted sick leave.  Ah Nam told him to have his days off.  The applicant also called up the respondent the next day and was told by him to take days off and rest. 

5. At the end of April 2002 he further attended the Tuen Mun Hospital and was given further sick leave.  In mid May 2002, he told the respondent that his sick leave would expire on 12 May 2002.  The respondent promised to pay him about 12 days of sick leave.  However, despite the promise, he was not paid. 

6. In September 2002, the applicant again pressed the respondent for payment.  The respondent only agreed to pay him five days of periodical pay.  The applicant refused and lodged a complaint to the Labour Department.  He filed a Notification of Accident on 19 September 2002.

7. The respondent denied that the applicant was his employee.  He said he had subcontracted some work to the applicant at other work sites but that work had finished on 22 April 2002.  He had never instructed the applicant to work at the site at Shan Ha Village.  He further denied that the applicant was injured at that site on 24 April 2002.  He learnt from one Wong For Dau in May 2002 that the applicant was injured in April 2002.  He refused the applicant’s request to help him lodge a claim for employees’ compensation because there was no report of his injury and no one knew where he was injured.

Evidence of COML at trial

8. Both the applicant and respondent gave evidence at the hearing.  Two employees namely Mr. Lee Tin Shun (‘Mr. Lee’) and Mr. Chan Wing Cheong (‘Mr. Chan’) of COML also gave evidence. 

9. In response to the inquiry by the respondent, Mr. Chan by letter dated 6 August 2003 stated that COML did not have any records showing that the applicant had ‘gone in and out of or worked in our godown at Shan Ha Village in April 2002’.

10. Mr. Chan by a further letter dated 7 October 2004 informed the Director of Legal Aid (‘DLA’), the applicant’s legal representative, that COML had subcontracted decoration and related works of its godown at Shan Ha Village to the respondent at the beginning of 2002 but due to the absence of records, he could not specify the duration of the work carried out by the respondent.  He further stated that the site was not guarded and it was possible that someone had gone in and out of the site without reporting to COML.

11. By another letter dated 8 October 2004 Mr. Chan informed DLA that according to documents that he had just received from his colleagues the respondent carried out metal hoarding work at its godown from 29 April 2002 to 17 May 2002.  The documents he referred to in his letter were

1. A quotation from the respondent dated 2 March 2002.

2. A notice dated 29 April 2002 from COML informing the respondent to commence work.

3. A letter from the respondent dated 17 May 2002 stating that the metal hoarding work had been completed.  There was an endorsement at the bottom of the letter from Lee Tin Shun stating that work was completed.  The endorsement was also dated 17 May 2002.

12. By a further letter dated 11 August 2004 Mr. Chan informed the respondent that COML had no record of work injury on 24 April 2002 at its godown and that there was also no record of the respondent carrying work at the godown on 24 April 2002.

The judgment

13. In a short judgment, the judge referred to the evidence of the applicant and the respondent, the documents I have mentioned earlier and the fact that Mr. Chan and Mr. Lee had given evidence and confirmed the contents of the documents.  He stated that their evidence had not been shaken and he rejected the allegation that their evidence was not reliable because they had tried to protect COML.  He then held that

‘ With those records and both Mr. Chan and Mr. Lee being independent witnesses on balance I find that the applicant was neither employed by the respondent nor had worked at that site on 24 April 2002.  In the circumstances the application is dismissed.’

14. That was all the judge said about the accident on 24 April 2002.  He made no finding on the credibility of the applicant and the respondent at all.

The applicant’s evidence at trial

15. There is no doubt that the applicant had injured himself and the medical report showing that he had attended the Tuen Mun Hospital on 24 April 2002 is certainly evidence in support of his claim that he was injured on that date.  Whether an accident had taken place at the relevant site was, of course, the issue in dispute.  But the applicant was the only one among all the witnesses who could give direct evidence on this matter.  Unless his evidence was so incredible or was totally contradicted by other credible evidence, one would have thought that he had indeed proved the accident on 24 April 2002. 

The respondent’s evidence at trial

16. The respondent’s witness statement of 17 September 2004 which was adopted by him as his evidence in chief gave the distinct impression that the respondent had not carried out any work at the COML site in April 2002.  He certainly did not disclose that he had performed iron hoarding work there between 29 April and 17 May 2002 let alone building a brick wall.  But after it emerged from the evidence of Mr. Chan and Mr. Lee that a brick wall had actually been built by him at the site, the respondent, without filing any supplemental witness statement, disclosed for the first time during his evidence at the trial that he carried out the brick wall work after he had completed the iron hoarding work between 29 April and 17 May 2002.  However, he made no disclosure of any documents relating to the building of the brick wall even though the evidence clearly showed that such documents existed.  This is in my view certainly a matter affecting the credibility of the respondent.  As said earlier the judge had not made any finding on the credibility of the respondent.  In fact he stopped the lawyer for the applicant from pursuing the matter of non-disclosure by the respondent by saying ‘he who alleges must prove’ and that the respondent had nothing to prove.  This was, as Mr. Lin correctly submitted, an erroneous approach : the burden of proof is one thing, the duty to make discovery of relevant (indeed I would say crucial) documents is quite another.  It was unfortunate that this error was perpetuated in this appeal by the respondent. 

17. The employees’ compensation application filed by the applicant clearly referred to the building of brick wall.  His witness statement which was filed in August 2004 before the respondent filed his, expressly mentioned that he had started building the brick wall since 22 April 2002.  Mr. Lee could not remember when the brick wall was built but Mr. Chan was able to say that for the period before and after 24 April 2002, COML had engaged the respondent to work at the site.  When the brick wall was built was clearly a relevant issue.  Documents relating to the brick wall were clearly documents which ought to have been disclosed.  They were not.

18. While the respondent had denied in his witness statement that the applicant had told him that he was injured on 24 April 2002, the applicant’s evidence that Ah Nam had informed the respondent of his injury on the time of the accident and that he himself had also informed the respondent the next day about his injury was not challenged at all.

The independent evidence : an analysis

19. On a careful reading of the transcript of the evidence, the evidence of Mr. Lee and Mr. Chan and the documents they produced simply do not have the effect of contradicting the applicant’s case (as the judge thought).  Their evidence and the documents they produced did not unequivocally contradict the applicant’s case.  The documents merely showed that the respondent carried out the iron hoarding work between 29 April and 17 May 2002.  They did not show that was the only work performed by the respondent at the site.  It was further accepted by Mr. Chan that since COML did not have someone guarding the entrance to the site and it did not have records of the workers going in or out of the site.  The statement in the letter of 6 August 2003 that COML did not have any record of the applicant going in and out or working at the site in April 2004 must be understood in that context.  Further it was not the applicant’s case that he had reported his injury to COML. 

20. What is more important is that the evidence of Mr. Chan and the letters he produced actually showed that the respondent had performed work at the site for the period both before and after 24 April 2002.  I do not read the letter as stating that while work was performed before and after 24 April 2002 no work was performed on that date.  The wording clearly conveyed the impression during that period of time the respondent had carried out work there.  This being the case, the fact that the respondent carried out the iron hoarding work after 24 April 2002 does not mean that the applicant was not working at the site on his behalf on 24 April 2002 or that he had not injured himself on that day.  I would say that the so called independent evidence of Mr. Lee and Mr. Chan was at worst neutral, and at best supportive of the applicant’s claim.  The judge was in my view wrong to treat this evidence as being adverse to the applicant.

Decision cannot stand

21. In my view the decision by the judge cannot stand and must be set aside.  The applicant clearly had discharged the burden of proof in establishing the accident on 24 April 2002.  In reality, there really was nothing to contradict his evidence that he was indeed injured on 24 April 2002.  As stated above, the evidence of Mr. Lee and Mr. Chan was not adverse to the applicant’s claim.  The conflict of evidence relating to what was discussed by the parties after the accident does not carry the matter further although as I have noted in paragraph 18 above, the respondent did not challenge a fairly important part of the applicant’s witness statement.  In coming to this view, I am fully aware of the advantage that a trial judge may have in observing the witnesses giving evidence.  I also accept the proposition that where a case is based largely on eye-witnesses’ accounts and the court has to resolve two irreconcilable accounts, there may be little to say other than that the witnesses for one side were more credible : see Flannery v. Halifax Estate Agencies Ltd [2000] 1 W.L.R. 377 at 381.  I am also fully aware of the strictures impose on an appellant court in overturning a finding of fact by a trial judge.  However, this is clearly a case where, to adopt the words of Lord Thankerton in Watt or Thomas v. Thomas [1947] AC 484 at 488,

‘ The appellate court, either because the reasons given by the trial judge are not satisfactory, or because it unmistakably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard witnesses, and the matter will then become at large for the appellate court.’

The alternative finding

22. The judge made an alternative finding that, in the event that he was wrong about the accident of 24 April 2002, the applicant was indeed an employee and not an independent contractor of the respondent.  He found that the applicant was directed by the respondent to perform work, the tools were provided by the respondent and that the applicant was paid on an hourly basis.  No doubt the judge had in mind the relevant test for deciding whether someone is an independent contractor or an employee.  There was clearly ample evidence to support such a finding. 

Lack of ‘contractual relationship’?

23. What Mr. Chong, counsel for the respondent, seeks to challenge is that the judge had failed to find there was any contractual relationship at all between the parties and without this relationship, Mr. Chong submits that it is meaningless to make a finding on the nature of the relationship.  Mr. Chong submitted that the evidence of the applicant showed that

1) he was engaged by one Wong For Dau and not respondent to work at the Shan Ha Village site,

2) he had no direct contractual relationship with the respondent, and

3) he did not know the relationship between Wong For Dau and the respondent.

24. The applicant’s evidence showed that he had previously worked together with Wong For Dau and another person as a team of subcontractors in a construction project.  After that project, Wong For Dau worked for the respondent while the applicant became unemployed.  In mid March 2002, Wong For Dau told him that the respondent had work for him and thereafter the applicant began to work for the respondent in a number of sites before he took up the work at Shan Ha Village.

25. In my view this ‘absence of contractual relationship’ argument is without merit.  Paragraph 16 of the applicant’s witness statement which was adopted as his evidence in chief expressly stated that he was instructed by the respondent to work at the Shan Ha Village site.  It was not suggested to him at the trial that it was Wong For Du and not the respondent who instructed him to work there.  What was challenged at the trial was in respect of paragraph 7 of his witness statement where, after stating that Wong For Dau told him the respondent had work for him, he went on to state that the respondent told him to meet him at a construction site the next day.  Under cross examination the applicant agreed that it was also Wong For Dau who arranged the meeting.  But this fact alone is not sufficient to support the argument now raised by Mr. Chong because there was other evidence which was not contradicted, pointing to the instructions given by the respondent to the applicant.  The evidence further showed that the applicant had received payment from the respondent himself.  The fact that the applicant did not know whether Wong For Dau had worked for the respondent as a subcontractor or as an employee is clearly irrelevant to his case against the respondent.

26. There was clearly evidence to support the judge’s finding that the applicant was an employee of the respondent.  Accordingly judgment was entered for the applicant on the sum as agreed by the parties.

Is leave required?

27. In his written submissions, Mr. Chong had raised a point (which in the end was not pursued at the hearing) that leave to appeal is required by section 63(3) of the District Court Ordinance for an appeal from the decision of a District Court judge on employees’ compensation.  The applicant had not applied for leave to appeal in this case.

28. Although this point was not pursued, I still think it is necessary to give an opinion on a matter so that this point should not be raised again in the future. 

29. The District Court Ordinance came into operation on 18 February 1953.  The Employees’ Compensation Ordinance came into operation a few months later on 11 December 1953.  Unlike the wording of section 63(3) of the District Court Ordinance which expressly mentioned that an appeal can only be made to the Court of Appeal with leave, section 23(1) of the Employees’ Compensation Ordinance does not mention leave to appeal except in matters of less than $1,000.  Sections 23(1) and (2) provide that :

'23.	(1)	Subject to the provisions of this section and of section 13, an appeal shall lie to the Court of Appeal from any order of the Court.
	(2)	Except with the leave of the Court or of the Court of Appeal (which shall not be granted unless in the opinion of the Court of Appeal some substantial question of law is involved in the appeal) no appeal shall lie if the amount in dispute is less than $1,000.’

30. In my view the meaning of section 23(1) is clearly that leave is not required.  The appellant is entitled to have an unqualified right of appeal.  Further the wording of section 23(2), which restricts an appeal if the amount in dispute is less than $1,000 unless leave is granted, could only mean that leave is not required in other situations.

31. This Court (Blair-Kerr, S.P.J., Huggins and McMullin JJ) in Wong Po Sin v. New Universal Paper Co. Ltd (Civil Appeal No. 15 of 1972, Judgment dated 5/1/1973) had also held that the phraseology of section 23 contemplates a full right of appeal on fact as well as law.

32. Mr. Lin, counsel for the applicant, had also referred to another decision of this Court (Fuad VP, Penlington and Nazareth JJA) in Chan Chu Ngan v. Wong Woon Pui & Another [1992] 2 HKC 193.  The Court had at the beginning of the appeal given leave to an employee to appeal out of time in respect of a determination of his claim against his employer insurer under sections 43 and 44 of the Employees’ Compensation Ordinance.  The Court came to the view that such a claim came within the meaning of compensation under the ordinance and the determination is ‘an order of the court’ within section 23.  As a result, the Court ruled that leave to appeal was in fact not required.

Hon Burrell J :

33. I agree.