NG MING CHEONG v. MASS TRANSIT RAILWAY CORPORATION

1997, No.131
(Civil)

IN THE COURT OF APPEAL

(On appeal from Hong Kong District Court Employees' Compensation Case No.704 of 1995)

_______________

__________________

____________________

J U D G M E N T

____________________

Le Pichon, J. (delivering the judgment of the Court) :

1. This appeal from the District Court arises under the provisions of the Employees' Compensation Ordinance, Cap.282 ("the Ordinance"). In the court below, the Appellant who was the applicant for compensation under the Ordinance obtained judgment in the sum of $111,965.55 which was assessed on the basis of his having a permanent loss of earning capacity of 15%. The Employees' Compensation (Ordinary Assessment) Board ("the Board") had issued a Certificate of Assessment on 5 June 1996 assessing the Appellant's permanent loss of earning capacity at 53%. The Appellant contends that compensation ought to have been assessed based on that percentage which would result in compensation of $392,620. We allowed the appeal. The reasons appear below.

The facts

2. The Appellant was injured in an accident at work on 10 December 1993. At the time of the accident, the Appellant was employed as a tradesman in the Estate Management Site Office of the Respondent at Hang Fa Chuen. He was stepping on steel bars to repaint an anti-burglary fence at the Respondent's site when two of the bars of the fence broke and he fell from a height of about 12 feet to the ground sustaining injuries to his back, right buttock and right shoulder. He received medical treatment but despite receiving extensive physiotherapy from 11 January to 1 July 1994 his symptoms continued to deteriorate. For some seven months after the accident his condition was not properly diagnosed. In fact he suffered a partial rotator cuff tear in his right shoulder. This was not discovered until late June 1994.

3. The Appellant returned to work on 22 July 1994 but that only lasted for a week as he suffered great pain on 27 July and was taken to hospital. He did not work after that until November 1994. Although the Appellant had been advised to do light work only, he was required to undertake work that was as heavy or heavier than that which he had had to do before his accident. He could not carry out his duties properly and was given a warning letter. When he tried to see the personnel officer to explain his situation, he was given another warning letter. This occurred on 30 December 1994. The Appellant suffered depression and attempted to kill himself. He was then treated as an in-patient in Castle Peak for a time and continues to receive treatment at the orthopaedic, psychiatric and neurological departments of the Prince of Wales Hospital.

4. On the eve of the expiration of 24 months from the date of the accident, the Appellant filed an application pursuant to section 18A(2) of the Ordinance to enforce his claim for compensation under the Ordinance. Had he not done so, his claim would have been time-barred under section 14. The application was filed on 8 December 1995. The Respondent filed an answer opposing the application by denying the allegations contained therein save for the fact that on the day of the accident the Appellant was employed by the Respondent and putting the Appellant to strict proof. No affirmative case was put forward in defence.

5. Approximately six months after the date of the Appellant's application, the Board issued a Certificate of Assessment. This certified that the assessment was made as of 22 May 1996, that the Appellant sustained injuries of right shoulder, right leg and back resulting in pain and stiffness of right shoulder, pain and wasting of right leg as well as psychosis with moderate disturbance in behaviour. It also certified three periods of absence from duty necessary as a result of the injury, namely, from 11/12/93 to 21/07/94, 28/07/94 to 04/11/94 and 02/01/95 to 10/12/95. In other words, during the two year period following the accident, the Appellant was only able to work for a period of one week in July and for about a period of eight weeks from early November to the end of December 1994. The Board assessed the Appellant's loss of earning capacity permanently caused by the injury at 53%.

6. The Note at the foot of the Certificate made it explicit that it was open to either party to object to the assessment within 14 days of the issuance of the certificate under section 16G(1) of the Ordinance or to appeal against the assessment within 6 months under section 18(1) and (2) of the Ordinance. The Respondent neither objected to the assessment nor lodged any appeal to the District Court against the assessment. Nor did it make any application for leave to appeal out of time against the assessment.

7. The Respondent failed to pay any compensation to the Appellant and the application filed in December 1995 therefore proceeded to a hearing on 1 May 1997 which lasted for five days. The Respondent disputed liability as well as quantum although liability was eventually conceded.

8. The learned judge did not consider that the Board's assessment was binding either on the Court or on the parties. He considered that he had to start afresh in assessing disability and determining the Appellant's claim. On that aspect, he heard oral evidence from seven experts, two orthopaedic surgeons, three psychiatrists and two urologists. In addition, the agreed medical report of a neurologist was also before the Court. The learned judge concluded from the medical evidence adduced that apart from the Appellant's rotator cuff injury, the rest of his complaints was caused by his own fictitious malingering rather than by the accident. Whilst he accepted that the Appellant suffered mental illness, he found that that resulted from the treatment the Appellant received at work rather than the effects of the accident. He assessed compensation on the basis that the Appellant had a permanent loss of earning capacity of only 15%.

Grounds of appeal

9. The grounds of appeal raise two issues :

(1) whether the Court was bound by the Board's assessment of 53% loss of earning capacity; and

(2) whether the Court erred in its interpretation of the medical evidence in finding that what precipitated the Appellant's mental illness was his treatment at work rather than the effects of the accident and in placing too much weight on the lack of organic pathology to explain the various symptoms of the Appellant.

The statutory framework

10. The Ordinance entitles an employee who is injured at work to claim compensation from his employer. Its provisions are designed to provide speedy relief and a significant part of claims made under the Ordinance do not require the intervention of the Court. Under the Ordinance, it is incumbent upon an employee who wishes to invoke its provisions to give notice of the accident to the employer who in turn is required to notify the Commissioner of Labour ("the Commissioner") within prescribed time limits irrespective of whether the accident gives rise to any liability to pay compensation. Section 16D(4) empowers the Commissioner to refer to an Ordinary Assessment Board any claim for compensation for an injury to an employee of which he has notice if in the Commissioner's opinion, such injury is likely to result in permanent total or partial incapacity. The decision whether to initiate the procedure rests solely with the Commissioner : neither the employer nor the employee has any say in the matter.

11. Once a claim has been referred to it under section 16D(4), an Ordinary Assessment Board must assess, inter alia, the percentage of the loss of earning capacity permanently caused by the injury in accordance with the Ordinance. In a case of permanent partial incapacity such as the present, compensation has to be assessed in accordance with the detailed provisions of section 9. Once an assessment has been made, the Board is required to issue a certificate to the employee, the employer and the Commissioner, giving details of the assessment.

12. Under section 16H,

"A certificate purporting to be issued -

(a) under section 16F ...

and to be signed by or for an Ordinary Assessment Board or a Special Assessment Board, as the case may be, shall be admitted in evidence without further proof on its production in any court and -

(i) until the contrary is proved, it shall be presumed that the certificate is so issued and signed; and

(ii) shall be evidence of the matters stated therein."

13. An employer or employee who is dissatisfied with the assessment may make an objection to the assessment to the Commissioner in writing within 14 days after the date of issue of the certificate upon receipt of which the Board must review its assessment as provided by section 16G and issue a certificate either confirming the original assessment or varying it.

14. The purpose of such a comprehensive procedure is obvious. If liability is indisputable or admitted, the parties need not go through the expensive and time-consuming court process for an assessment. The Ordinary or Special Assessment Boards would decide for the parties the extent of disability according to certain well set-out criteria including the First Schedule to the Ordinance. The assessment would form the basis for the calculation of compensation. If the assessment is also acceptable to the parties, the amount of compensation can easily be worked out and the employee's claim expeditiously settled.

15. If either party is not satisfied with the assessment, be it that of the Ordinary Assessment Board or that of the Special Assessment Board on review, he may lodge an appeal to the District Court within six months of the original assessment or if an objection had been made, within six months of any certificate issued on review under section 18 of the Ordinance.

16. Section 18 provides as follows :

"(1) Subject to this section, an appeal shall lie to the District Court from any decision or assessment of the Commissioner, an Ordinary Assessment Board or a Special Assessment Board under section 16A, 16D, 16E, 16G or 16GA.

(2) No appeal shall lie after the expiry of 6 months from the date of the decision or, in the case of an assessment, of the date of issue of the relevant certificate under section 16A, 16F, 16G or 16GA, as the case may be:

Provided that the Court may, if it thinks fit, extend the time within which to appeal under this section notwithstanding that the time has elapsed.

(3) On an appeal under this section, the Court may confirm or reverse any decision, or confirm or vary any assessment, of the Commissioner, an Ordinary Assessment Board or a Special Assessment Board, or may substitute its own assessment, and may determine the amount of compensation payable and may make such order in respect thereof, including any order as to costs, as it thinks fit."

Section 18 therefore "has provision for primary assessment, an appeal within a limited period time; and then a general provision entitling the Court to agree or disagree or substitute its own figures on a hearing." See per Hunter J.A. in Chan Kit v. Sum Wo Industrial Manufactory [1989] 2 HKLR 230 at 232F.

17. It is the clear intention of the legislation that the District Court is the forum to contest liability where this is disputed. It is also the forum to hear an appeal against the assessment of the Ordinary or Special Assessment Boards where either party is dissatisfied with it. Where liability is disputed, an employee may lodge a claim for compensation under section 18A of the Ordinance. Where the assessment is in dispute, this can be challenged by way of appeal under section 18. It can also be included in the section 18A proceedings by adding an appeal or application to appeal out of time against the assessment in the Application for compensation. If it is the employer who is not satisfied with the assessment, he can do the same in his Answer. If separate proceedings have been instituted for the determination of liability and assessment respectively, they can be consolidated. The District Judge hearing the Application for compensation can then deal with the two issues together at the trial.

18. In the present case, the Appellant filed an Application for compensation under section 18A. Had the proceedings before the judge included an appeal and/or an application to appeal out of time under section 18, no criticism could possibly be levied at his approach in determining the amount of compensation payable. There was none.

Was the Board's assessment binding?

19. The judge accepted that there was no appeal under section 18 in the present case but went on to hold that that fact made no difference. He stated :

"... An appeal under section 18 is usually filed as ancillary to a claim in any event. Section 18A gives the court power to determine claims subject to certain exceptions. An assessment by the Board under section 16D(5) is not a determination and does not become binding on the parties unless it becomes the subject of an agreement under section 17. If there is no agreement an applicant can apply to the court anyway, as this Applicant has done. Once the application is made then the court has to do the best it can with the assistance of expert evidence to assess the disability and determine the claim."

20. Was the learned judge correct?

21. Counsel for the Appellant submits that if no appeal is made under section 18, the assessment becomes binding. She referred to dicta made in two decisions of this Court which appear to support that proposition. In Wong Sing Fung v. Fu Ming Stainless Engineering Co. Ltd. CA 76 of 1986, Kempster J.A. said (at p.2) :

"... No explanation appears for the failure to give effect to the certificate of the Special Assessment Board which, in the absence of any application for review under section 16G or appeal to the District Court under section 18, was to all intents and purposes agreed. At the very least, pursuant to section 16H, it was evidence of the matters stated therein. Prima facie it was necessary only to determine what figure constituted 4% of $273,600."

In the Chan Kit decision, Hunter J.A. made these observations (at p.232 B-D):

"... the scheme of the Ordinance up to [section 18(1)] is to seek to arrive at an administrative solution to claims of this nature. Quite an elaborate structure is established starting with the Commissioner, then either an Ordinary or a Special Assessment Board under ss.16D and E; and then with review procedures either at the instance of the party under s.16G or on the Board's own motion under s.16GA. The plain intention is that these procedures will be final and accepted by the parties. The section then provides for an appeal:

'(2) No appeal shall lie after the expiry of 6 months from the date of the decision ...'

with certain provisos. Plainly therefore the intent is that the assessments are to be final unless appealed within a limited period of time." (emphasis added)

22. Counsel for the Respondent submits that a certificate issued by the Board is no more than prima facie evidence and not conclusive evidence of the matters stated therein. It can only be conclusive if there is no other evidence. It is nothing more than part of an administrative process designed to encourage the parties to compromise, the role of the Board being simply to give a prima facie view of the extent of the employee's incapacity.

23. Whilst we agree that section 16H itself does not state in terms that the Certificate shall constitute conclusive evidence of the matters stated therein, it does not follow that the evidence cannot become conclusive through the appeal procedure not being invoked. Given the clear and comprehensive framework for challenging an assessment, in particular the imposition of the specific time limit for so doing, we agree with Hunter J.A.'s observation in the Chan Kit case that the legislature's intent is that the assessments are to be final unless appealed within a limited period of time. The comprehensive appeal provisions such as those contained in section 18 are there for a purpose : those provisions are clearly intended to achieve finality. Having regard to the Ordinance as a whole and the purpose for which it was designed, namely to enable employees to obtain compensation for injuries sustained at work reasonably speedily, the importance of finality of assessments which would settle the amount of compensation payable is obvious. Nor would such a consequence take away a party's recourse to the courts as the Respondent sought to submit. That recourse lies in an appeal under section 18 which the Respondent has eschewed.

24. The Respondent's further submission that where liability is also in issue, such an interpretation would mean that two applications would be necessary - one to resolve the liability issue and the other to appeal quantum ( has little substance. We do not agree that it would result in two separate hearings. As soon as it becomes apparent that both issues are being disputed, they could conveniently be consolidated and heard together. We do not see any practical difficulty in so doing.

25. In our judgment, the judge ought not to have entertained any expert evidence at the trial which took place some 11 months after the date of the Certificate in circumstances where the Respondent had chosen not to appeal during the six month period, or to apply for leave to appeal out of time prior to the hearing. The only evidence before him as to quantum should have been the Certificate and nothing more. Accordingly, we accept the Appellant's submission that the judge should have assessed compensation on the basis of a permanent loss of earning capacity of 53%.

26. This effectively disposes of the appeal and it is not necessary to hear counsel on the second issue.

27. The appeal is allowed. We order that the judgment in the sum of $111,965.55 be set aside and substitute therefor judgment in the sum of $392,620 with interest thereon at judgment rate until payment.

28. The Respondent should pay the costs of the appeal to the Appellant. The Appellant's own costs are to be taxed under the Legal Aid Regulations.