LI KAM LING v. TSE WAI KEUNG t/a KEUNG FAT (CHINA HK) MOTOR ENGINEERING

DCEC 394/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 394 OF 2013

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JUDGMENT

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1.  This is an application for compensation under sections 9, 10 and 10A of the Employees’ Compensation Ordinance, Cap 282 (“the Ordinance”) against Tse Wai Keung trading as Keung Fat (China-HK) Motor Engineering, the respondent.

2.  There is no dispute that the respondent runs an automobile repairing garage in the trading name of Keung Fat (China-HK) Motor Engineering at No 141 Kwu Tung Road, Lok Ma Chau, New Territories (“the Garage”).

3.  It is the applicant’s case that he was employed by the respondent as an automobile mechanic working at the Garage since early March 2012.  He sustained injury on 14 July 2012 in the course of his employment.

4.  The applicant’s daily wage was HK$650 and he worked from Monday to Saturday, 8:00 am to 6:00 pm (about 26 days a month).  He was responsible for repairing vehicles and for cleaning and tidying the Garage when required.

5.  The respondent’s case is that the applicant was never an employee of the respondent.  In fact, the respondent did not know the applicant at all.

6.  According to the applicant, since the first day of work with the respondent, the applicant’s daily duties were arranged by the respondent.  The respondent would notify the applicant if there were any problems with his customer’s vehicles and would instruct the applicant to inspect or repair the customer’s vehicles.  During his employment, the applicant used tools provided by the respondent to inspect and repair the respondent’s customer’s vehicles.

7.  On 14 July 2012, the applicant was, whilst in the course of his employment with the respondent, instructed to work with his colleague Mr Fong Pak Yung to inspect and repair a lorry.  In the course, the applicant had to inject grease into the lorry with a grease gun connected to a plastic hose (the grease gun and the connecting hose were provided by the respondent).  The said hose suddenly burst and the grease shot at the applicant, puncturing his left hand (“the Accident”).

8.  The plastic hose could not withstand the pressure generated by the grease gun.  Before the Accident, both Mr Fong and the applicant had told the respondent about the problem of the plastic connecting hose, and asked the respondent to use metal hose instead, but the respondent never purchased proper hose for their use.

9.  After the Accident, the applicant was in a lot of pain.  Mr Fong asked the applicant to seek medical treatment immediately.  However, the respondent said the applicant must finish the works before he could leave.  The applicant stayed on to finish the respondent’s work for the day and then sought medical treatment from the Accident and Emergency Department of Pok Oi Hospital at around 7:00 pm on the same day.  Medical report dated 17 January 2013 recorded that :-

“palm injury by a high pressure injection of oil”;

“a tiny hole with surrounding erythema over left thenar eminenace region.”

10.  After the applicant was treated at the Accident & Emergency Department of Pok Oi Hospital on 14 and 17 July 2012, he was then admitted to the Department of Orthopaedics & Traumatology of Tuen Mun Hospital on 3 August 2012 and was hospitalized for 22 days for surgery and further medical treatments. 

11.  According to the medical report dated 25 November 2012, the applicant:-

“sustained jet injury by chemical lubricants at work 2 weeks prior admission”;

“there was marked swelling over left hand and wrist with signs of cellulitis over thenar eminence”;

“xray left hand showed vague shadow over thenar area”;

“Incision and drainage was performed on 04/08/2012. There was greenish oily substance noted over thenar compartment and spread along tendon sheath. CT scan was performed showed residual foreign materials and second debridement done on 11/08/2012”.

12.  The counsel for the respondent confirmed that the respondent did not dispute that the applicant sustained injury on 14 July 2012 which was caused by a high pressurized grease gun.  The only issue is whether he sustained the said injury at the Garage while performing work as the employee of the respondent.

13.  According to the notification of Accident filed by the applicant dated 11 September 2012, the applicant stated that he was employed by the respondent as an automobile mechanic and he sustained injuries at work on 14 July 2012 at about 11:00 am when he was using a pressurized grease gun.  This notification was filled out by the applicant himself.

14.  Mr Fong is the applicant’s second witness.  He told the court that he was employed by the respondent from April to August 2012.  The respondent did not sign any employment contract with Mr Fong. He was paid by the respondent in cash, and the respondent never provided any salary slip to him.  His employment condition was similar to those of the applicant.

15.  He told the court that he only got to know the applicant when both of them were working at the Garage together in April 2012.  He told the court that he had no grudges with the respondent.

16.  He was working with the applicant at the time of the Accident.  He heard a scream and he went over to see what happened.  He saw the applicant’s left hand bleeding.  He saw the grease gun with the hose on the ground.  He agreed that he did not really check whether the plastic hose was burst at the material time, but he saw lubricant coming out from the applicant’s wound after the Accident. 

17.  The respondent testified and adopted his witness statement and supplemental witness statement as his evidence in chief.  He stated in his witness statement that he did not employ the applicant and he did not even know the applicant at all.  The first time he met the applicant was when the applicant came to the Garage to give him the sick leave certificates on 25 August 2012 and it was also the first time he heard about the Accident.  He told the applicant to leave since he did not know him.  The respondent found it strange and he made enquiry with people in the neighboring shops but no one witnessed or heard about the Accident.

18.  The respondent agreed that Mr Fong was his employee at the material time.  When asked when he started to employ Mr Fong, he said for the first time in court that he had only started to employ Mr Fong since around the end of June 2012, and that Mr Fong was working for him as a casual worker before June 2012 (which he later described as independent contractor casual worker). The respondent agreed that after his employment of Mr Fong in around the end of June 2012, he had never entered into any written employment contract with Mr Fong. He further admitted that he did not contribute to Mr Fong’s Mandatory Provident Fund and that he had not taken out any insurance policy for Mr Fong before 6 August 2012.

19.  When the respondent was asked about why he would suddenly decide to take out insurance policy for Mr Fong on 6 August 2012 (which is about 3 weeks after the applicant’s Accident), he said there was no reason for it.

20.  The respondent stated in his witness statement that he had “investigated about the applicant’s Accident with the shops nearby on 25 August 2012”.  When the respondent was asked about this statement in his cross-examination, he alleged for the first time that he had actually spoken with Mr Fong about this on 25 August 2012.  He further alleged that Mr Fong had told him on 25 August 2012 that the applicant’s Accident never happened.  He was asked the reason why he did not mention this in his witness statement or in his supplemental witness statement after he had read Mr Fong’s witness statement, he could not come up with any reasonable answer.  He alleged that this information was not important.  He also told the court that he had never told anyone about this alleged conversation he had with Mr Fong before.  He could not explain further why he had decided to keep this information to himself even after reading Mr Fong’s witness statement.

21.  If such conversation did happen, there is simply no reason why the respondent would not state so in his witness statement.  There is no reason why the respondent would not seek to challenge Mr Fong’s evidence by filing supplemental witness statement.  I do not believe the respondent.

LIABILITY

22.  I have no hesitation to reject the respondent’s evidence that he did not know and did not employ the applicant at the material time.  I find the applicant and Mr Fong to be an honest witness.  I accept that the applicant sustained his injury while he was using the high pressurized grease gun in the course of his employment with the respondent on 14 July 2012.  In this regard, the applicant’s evidence is in fact supported by Mr Fong.  He was a co-worker of the applicant.  Mr Fong’s evidence was not under much challenge by the respondent, save that it was put to him that he had never worked with the applicant at the respondent’s Garage before.  He did not hold any grudges against the respondent.  There is no suggestion that Mr Fong was making up the story against the respondent.  I do accept Mr Fong’s evidence that the applicant was his co-worker being employed by the respondent and that he suffered injury to his left hand in the course of his employment on 14 July 2012.

23.  On the issue of liability, I hold that the respondent is liable to pay compensation to the applicant under the Ordinance.

QUANTUM

24.  The applicant was born on 18 March 1953 in Mainland China.  He was educated to primary school level.  He was 59 years old at the time of the Accident.  He is married and has a daughter.

25.  The applicant was jointly examined by Dr Lam Chi Keung, Johnson (“Dr Lam”) and Dr Chan Wai Fu (“Dr Chan”) on 27 November 2014.  There is a Joint Orthopaedic Report by Dr Lam, orthpaedic expert for the applicant, and Dr Chan, orthopaedic expert for the respondent dated 26 February 2015 (“the Joint Ortho Report”).

26.  According to the Joint Ortho Report, the applicant complained of:-

(a) Left thumb was stiff and immobile.

(b) Occasional pustules in the left thumb and index finger which required drainage (by a needle) by himself and self-dressing for treatment.  In 2014, there were 4-5 episodes of such pustules formation, each lasting for about 1 month.

(c) Numbness and pain over the left hand, sometimes radiating to the left forearm.  Such episodes occurred every day and were worse with the change of weather.

(d) Activities of daily living were independent, but more difficult in eating.  His left hand could not hold a bowl, and he used a combination of chopsticks and a spoon using his right hand when eating.  He would use chopsticks (with his right hand) in getting the food from the dish to place in his bowl, and then he would use a spoon (with his right hand) for eating.

27.  His pre-accident job as a garage mechanic required considerable physical exertion (eg using hand tools and lifting/moving heavy gear boxes weighing over 100-200 lbs).  He has many years of experience working as a garage mechanic.

28.  The experts’ report revealed that the applicant’s left thumb was held in an adducted position, the metacarpophalangeal joint and interphalangeal joint were stiff.  There was obvious wasting of both the thenar muscle and the 1^st dorsal interosseous muscle.

29.  The applicant could not make a full fist with his left hand.  There were 2 small gaps over the dorsum of the 1^st and 2^nd web space.  The applicant informed the doctors that these 2 gaps were formed after pus formation.

30.  Test of the handgrip and pinch grip revealed that the handgrip was decreased for the left hand.  Plotting the handgrip against various positions of Jamar Dynamometer yielded a bell-shaped curve suggesting use of genuine effort.  Pinch grip strength could not be tested because the thumb was not able to oppose other fingers.

31.  Dr Lam and Dr Chan agreed that the diagnosis was injection injury/grease gun injury to the left hand.  This is consistent with the mechanism of injury described by the applicant.  They also agreed that based on the evidence there was no pre-existing condition in the applicant’s left hand.

32.  Dr Chan opined that the treatments received, namely multiple surgery with incision and drainage on 4 August 2012, wound debridement on 11 August 2012 and second wound debridement, local skin flap and extensor tendon tenolysis on 8 November 2012, antibiotics, physiotherapy and occupational therapy, were all standard and appropriate.

33.  Dr Lam opined that at the time of this assessment, the applicant was able to retain his injured digits, but his left thumb was very stiff in the interphalangeal joint, metacarpophalangeal joint and carpometacarpal joint.  Further the first web was contracted, and the thumb failed to oppose other digits.  Dr Lam opined that further conservative treatment such as physiotherapy or occupational therapy was not beneficial.

34.  As the left thumb was very stiff and could not oppose other digits, Dr Lam opined that the function of the left hand would be very much reduced, mainly functioning as a hook or helping hand, and would not be able to perform fine activities such as holding a nail, or making a pincer or tripod pinch.  Moreover, with a contracted 1^st web, it would be difficult for the applicant to hold a large object (eg a bowl) in his left hand.

35.  In the assessment of impairment, Dr Lam considered that the thumb was the most important digit for the function of the hand, and was commonly estimated to account for 40% to half the function of the hand.  Dr Lam also considered that an opposable thumb was very important for the hand.  An opposable thumb allowed the digits to grasp/handle objects and was characteristic of primates.  Considering the overall evidence reviewed, Dr Lam estimated that the residual impairment in the applicant’s left hand was severe.

36.  For assessment of permanent impairment and disability in practical terms, the doctor opined that the applicant would not be able to use left hand to perform fine activities such as holding a nail, or making a pincer or tripod pinch.  He would have difficulty in grasping a large object or making a grasp with significant strength.  He would be able to use the left hand like a hook in holding, say, an object with a handle (eg briefcase), and using the left hand to assist the right hand in lifting.

37.  Dr Chan further assessed that the applicant would not be able to return to his pre-accident job as a garage mechanic which would probably require a strong hand grip in both hands, and strength and dexterity in both hands.  Duties that do not require medium to heavy manual labour involving both hands are more suitable.  Examples include a security guard.

38.  Considering the evidence reviewed and findings at the present assessment, and considering the residual impairment, Dr Lam estimated that the applicant’s left hand injury should carry 16% whole person impairment due to marked stiffness affecting 1^stinterphalangeal joint, metacarpophalangealjoint and carpometacarpal joint; and about 1% whole person impairment related to mild stiffness affecting the left index finger.  The total permanent impairment is therefore 17% whole person impairment.

39.  Considering overall evidence and findings at this assessment and the overall residual impairment, Dr Lam estimated that the impairment related to the left thumb should carry 20% loss of earning capacity.  The impairment related to stiffness affecting the second ray/index finger is mild, and should carry only 1% loss of earning capacity.  Total loss of earning capacity is therefore estimated to be 21%.

40.  Dr Chan on the other hand assessed the applicant’s whole person impairment due to the grease gun injection injury causing persistent pain and stiffness in his non-dominant left thumb at 10% and his loss of earning capacity at about 10%.

41.  Considering the severity of injury, the need for multiple surgeries, the chronic wound problem, the need for rehabilitation, the progress with treatment, and the pre-Accident job demand, Dr Lam opined that the duration of sick leave issued by the applicant’s treating specialists/doctors who assessed him from time to time was appropriate and should be endorsed.

The applicant’s monthly earnings

42.  The applicant earned HK$650 per day plus overtime allowance of HK$65 per hour when he was employed by the respondent.  His salary was paid in cash.  The respondent would also give the applicant HK$45 to HK$50 as meal allowance.  For the purpose of this application, the applicant is only claiming the basic daily wages he earned ie (HK$650 x 26 days) = HK$16,900 as his pre-accident monthly earnings.

Section 9

43.  Pursuant to section 9(1), subject to subsection (1A), where permanent partial incapacity results from the injury the amount of compensation shall be in the case of an injury not specified in the First Schedule, such percentage of the compensation which would have been payable in the case of permanent total incapacity as is proportionate to the loss of earning capacity permanently caused by the injury in any employment which the employee was capable of undertaking at that time.

44.  Pursuant to section 9(1A) of the Ordinance, where:-

(a) permanent partial incapacity results from an injury or a combination of injuries (whether or not specified in the First Schedule); and

(b) the percentage of the loss of earning capacity specified or assessed in relation to that injury or combination of injuries in accordance with subsection (1) would be substantially less than the percentage of the loss of earning capacity permanently caused by the injury or injuries in the special circumstances of the employee, including, without limiting the generality of the foregoing:

(i) the nature of the injury or injuries in relation to the nature of his former usual employment; and

(ii) his qualifications, previous training and experience, the amount of compensation shall be such percentage of the compensation which would have been payable in the case of permanent total incapacity as is proportionate to the loss of earning capacity permanently caused by the injury or injuries in any employment which, having regard to those special circumstances, the employee was capable of undertaking at that time.

45.  Pursuant to section 9(3), permanent partial incapacity shall be deemed to result from an injury where the percentage or aggregate percentage of the loss of earning capacity amounts in the case of an incapacity of a permanent nature which results from an injury not specified in the First Schedule, to less than 100% as assessed by an Ordinary Assessment Board.

46.  The applicant was assessed by the Employees’ Compensation (Ordinary Assessment) Board on 2 December 2013 and 10 December 2013.  He was assessed to be suffering from a left hand injury resulting in left hand scar and left thumb interphalangeal joint and metacarpophalangeal joint stiffness.  The period of absence from duty necessary as a result of the injury was intermittently from 14 July 2012 to 2 December 2013.  Loss of earning capacity permanently caused by the injury was assessed at 12%.

47.  The applicant was reassessed by the Employees’ Compensation (Ordinary Assessment) Board on 31 March 2014 and 8 April 2014.  According to the Form 9 issued on 22 April 2014 (“Form 9”), loss of earning capacity permanently caused by the injury was reassessed at 15% .

48.  On 28 April 2014, the applicant lodged an appeal against the Ordinary Assessment Board’s assessments as shown in the Form 9 in respect of the injury and loss of earning capacity permanently caused by the injury pursuant to section 18 of the Ordinance.

49.  In an appeal under section 18 of the Ordinance against the assessment of the Board, the correct test is to “start afresh” (Chan Kit v Sam Wo Industrial Manufactory [1989] 1 HKC 115, cited with approval in the Court of Appeal’s judgment in Tsang Kwong Tong v Tennile Decoration & Design Ltd, CACV 42/2006 (Hon Cheung, Tang JJA and Kwan J, 10 October 2006)).

50.  In Tang ShauTsan v Wealthy Construction Co Ltd, CACV 58/2000 (Hon Mayo VP, Rogers JA and Woo JA, 5 April 2000), it was held that it is for the court to assess the percentage of loss of earning capacity.  Medical opinion is useful, but it is for the court to come to its own conclusion.

51.  The concept of earning capacity is not limited to present, nor is it to be measured by some immediate and possibly quite fortuitous achievement.  It is concerned with a continuing state, with the potential of an individual and very much with the future: Lau HoWah v Yau Chi Biu [1987] HKLR 1061.

52.  In the present case, the applicant’s injury is not specified in the First Schedule.  Under such circumstances, the court may invoke section 9(1)(b) and assess the percentage of the compensation which would have been payable in the case of permanent total incapacity as is proportionate to the loss of earning capacity permanently caused by the injury in any employment which the employee was capable of undertaking at that time.

53.  The applicant invites the court to invoke section 9(1A) of the Ordinance and assess the percentage of compensation which would have been payable in case of permanent total incapacity as is proportionate to the loss of earning capacity permanently caused by the injury or injuries in any employment which, having regard to those special circumstances, the employee was capable of undertaking at that time.

54.  The formula for assessing the compensation under section 9(1A) of the Ordinance is [(b – a)/b x c] of which the abbreviations represent as follows:-

(a) “a” is the wages/earnings of the job that the applicant is capable of earning by performing the job that he is capable to undertake but assessed at the date of the Accident.

(b) “b” is the pre-Accident wages/earning of the applicant.

(c) “c” is the s 7(1)(b) “lump sum”.

55.  The often cited Paper Millsformula was modified in LuiKwong Yan v ShuiHing Decoration Works &Anor [1993] 1 HKLR 168.

56.  In the case of Kwan Yee Chor v Hung Fau Metal Construction Company Limited and Another, DCEC 520/2001 (HH Judge Lok, 10July 2002), the court accepted that section 9(1A) should apply in that case and held as follows:-

“In my judgment, there is ample justification for this court to invoke s 9(1A) of the Ordinance and to assess a higher loss of earning capacity. The injuries suffered by the applicant may not appear to be very serious. However, as the applicant’s pre-accident job would involve a great physical demand on the use of the right wrist, both for the welding operations and the other ancillary tasks such as moving various heavy metal objects in the work sites, the applicant certainly cannot return to his former employment. Coupled with the fact that the applicant has only received little education and he does not possess other special skills apart from working as an iron-work worker, the percentage of loss of earning capacity assessed under s. 9(1) of the Ordinance would be substantially less than the percentage of actual loss of earning capacity suffered by the applicant. Based on the aforesaid, I allow the applicant’s appeal and assess the compensation for permanent partial incapacity in accordance with the provisions contained in s. 9(1A) of the Ordinance and the formula laid down in Hong Kong Paper Mills Ltd v Chan Hi Wu[1981] HKLR 556, which was later modified in LuiKwong Yan v ShuiHing Decoration Works & Anr [1993] 1 HKLR 168”.

57.  Both Dr Lam and Dr Chan opined that the applicant would not be able to return to his pre-accident job as a garage mechanic which would probably require a strong hand grip in both hands, and strength and dexterity in both hands.  Dr Lam found that duties that do not require medium to heavy manual labour involving both hands are more suitable for the applicant.  Examples include a security guard.  Dr Lam estimated total loss of earning capacity to be 21%.  Dr Chan opined that the applicant would be better suited for alternative jobs which do not demand repeated exertion of his left thumb.  Such jobs include shop assistant, security watchperson or car-park attendant.  Dr Chan estimated his loss of earning capacity was about 10%.

58.  The applicant invites the court to take into account the following evidence:-

(a) Both parties’ medical experts agree that the applicant sustained an injection injury/grease gun injury to the left hand, consistent with the mechanism of injury described.  Dr Lam estimated that the residual impairment in the left hand is severe.  The applicant would not be able to use left hand to perform fine activities such as holding a nail, or making a pincer or tripod pinch.  He would have difficulty in grasping a large object or making a grasp with significant strength.  He would be able to use the left hand like a hook in holding, say, an object with a handle (eg briefcase), and using the left hand to assist the right hand in lifting.

(b) The applicant’s pre-accident work was physically demanding in nature, involving the use of both hands whilst inspecting and repairing vehicles.  According to the Joint Ortho Report, he was required to use hand tools, and lift and move heavy gear boxes weighing over 100-200 lbs.

(c) The applicant was 59 years old at the time of the Accident.  He was only educated up to primary school level and had no other work experience other than as a mechanic.

59.  Taking into account the nature of the applicant’s injuries, his qualifications, previous training and experience, I accept that he falls into “the special circumstances” stipulated in section 9(1A)(b) of the Ordinance. 

60.  The applicant was 59 years old at the time of the Accident.  Under section 7(1) of the Ordinance, where permanent total incapacity results from the injury, the amount of compensation shall be in the case of an employee of or over 56 years of age at the time of the accident, a lump sum equal to 48 months' earnings or 48 times the amount specified in the second column of the 6^th schedule shown opposite section 7(1)(c) specified in the first column of that schedule, whichever is the less.

61.  As in the case of Leung Wai Pong v Tang Hon Kong trading as Kin Wah Decoration Company, DCEC 237/2007 (HH Judge Lok, 19 November 2008), the statistics published by the Census and Statistics Department can be used to assess the average monthly salary of security guards.  According to the publication by Census and Statistics Department of Hong Kong, a security guard (as suggested by Dr Lam) earned an average monthly salary of HK$9,117 in September 2012.  The respondent does not dispute this figure in the event that the court decides to apply the Hong Kong Paper Mills formula.

62.  A post-accident income of HK$9,117 is a 46% reduction in earnings [(HK$16,900 – HK$9,117)/HK$16,900 x 100%], which is significantly more than the 15% loss of earning capacity assessed by the Medical Assessment Board.  In the circumstances, I shall apply the Paper Mills formula and allow the section 18 appeal by substituting 15% with 46% pursuant to section 18(3).

63.  The calculation for award under section 9 is therefore:-

[(HK$16,900 – HK$9,117)/HK$16,900] x HK$811,200

=   HK$373,584
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64.  Counsel for the respondent indicated that the respondent, subject to the issue of liability, would not dispute the amounts being claimed under sections 10 and 10A.  Hence, the total amount of the claim is as follows:-

     Summary of claims

(1)     Section 9	HK$373,584.00
(2)     Section 10	HK$188,378.67
(3)     Section 10A	HK$5,562.00
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Total	HK$567,524.67

Costs and interest

65.  I order interest on the total sum awarded at half the judgment rate from the date of the Accident (ie 14 July 2012) to the date of judgment and thereafter at the judgment rate until payment.  Costs of this application be to the applicant with certificate for counsel, to be taxed if not agreed and the applicant’s own costs be taxed in accordance with the Legal Aid Regulations.