TSANG SIU HONG v. KONG HOI FOR AND ANOTHER

HCPI 173/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 173 OF 2001

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J U D G M E N T

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1. The plaintiff in this matter is 24-year old male from the Mainland. He arrived in Hong Kong on 21st December 1997, having been granted a tourist visa valid for a period of three months. He was prohibited from obtaining any employment during the visit.

2. The day of his arrival a relative made enquiries with the 1st defendant as to whether employment was available for the plaintiff. The plaintiff was interviewed by the 1st defendant the following day, 22nd December. He was then employed on terms which included accommodation on the premises, the provision of one meal and a daily wage of $150.00. The plaintiff moved into the accommodation that night and commenced work the next day, 23rd December 1997.

3. The business operated by the defendants was a motor vehicle repair yard. The plaintiff was employed to carry out general work at the premises, including, specifically, welding.

4. In the repair yard stood two containers, one atop the other. The lower container had been converted into the office of the business. The upper container had been converted into accommodation which housed the plaintiff and one other employee. There was an external stairway to the upper container. On 28th February 1998 the plaintiff was instructed by 1st defendant to attend to welding during the construction of a cover for the stairway. Square metal tubes, some 48" x 2" x 2" with a wall thickness of 3/16th of an inch, had been moved onto the top of the upper container. They were to be welded into place so as to provide support for sheet metal which would form the stairway cover. 1st defendant was present on the top of the upper container. He instructed the plaintiff to carry welding equipment up from the ground to where he, the plaintiff, would carry out the welding at the top of the stairway. The plaintiff was carrying equipment up the stairway when one of the tubes fell or was dropped from above, striking him towards the rear of the top of his head.

5. The plaintiff says that he recollects 1st defendant attending to his wound. The next clear recollection he has is of being in hospital although he recalls parts of the journey there. It seems he was dazed rather than unconscious. In Pok Oi Hospital it was established that he had sustained a laceration to the vertex region of his head which was sutured.

6. He was transferred to Tuen Mun Hospital where examination revealed a fracture of the skull. A brain scan revealed acute epidural haematoma at both frontal regions. A right craniotomy was performed on 1 March 1997. The source of bleeding was found to be the skull fracture site. Anti-convulsants were administered.

7. He remained in hospital until 14th March 1998. On his discharge he was met, in the grounds of the hospital, by 1st defendant who told him not to mention that fact that he had been employed at the yard and who undertook to bear the cost of the hospital as well as "nourishing foods". 1st defendant encouraged the plaintiff to return to the Mainland and undertook to arrange the payments through the plaintiff's Hong Kong-based relative. The plaintiff returned to the Mainland at the end of that month.

8. The plaintiff's aunt, TSANG Mei Tai, who, let it be said, was not the person who arranged the plaintiff's employment, elaborated on events of the day of the accident. She said that 1st defendant had transported her and other family members firstly from the yard to Pok Oi Hospital, later from Yuen Long Police Station to Tuen Mun Hospital. During the latter journey 1st defendant had said that nothing should be said about the plaintiff's employment but that a fabricated story should be given to the police and also that he would bear the cost of the hospital as well as "nourishing foods". She said that after the plaintiff's discharge she had arranged a meeting with 1st defendant to present the hospital bill to him: he had failed to attend. When she had subsequently spoken to him by telephone, after numerous attempts, he had said that the amount was too great (at some $43,000.00), that he would not pay and that, if she wished, she could sue him. She was subsequently able to obtain a reduction of the hospital account, eventually paying some $2,000.00.

9. This summary emerges from the evidence of the plaintiff and his witness whose evidence, in these respects, I accept. Certain factual issues also have been determined in other proceedings, the consequence of which was an application by the plaintiff, prior to commencement of trial, to strike out portions of the defendants' defence.

THE SUMMONS

10. The plaintiff instituted an action, under case number DCEC529/1999, in the District Court for compensation under the Employees' Compensation Ordinance, Cap. 282. Apart from a blanket denial of liability, the defendants specifically pleaded in that action that 1st defendant had not carried on business, at that time, as Wing Hing Auto Engineering Service, that the plaintiff was unknown to either of them prior to the commencement of those proceedings and that the plaintiff had not been employed by either of them at any stage.

11. That action was tried over a period of four days by Deputy Judge Andrew Chan. Both defendants gave evidence. Their evidence was rejected by the Judge. He made findings of fact, based on the evidence, that the defendants had employed the plaintiff and had carried on the business jointly: he found, in terms,

"... the [plaintiff] did enter into a contract of service...and that during his course of employment on 28th February 1998, he sustained injuries as described by him."

and

"... the 1st and 2nd [defendants] did have different roles to play in this business ..."

12. No appeal was lodged against that judgment

13. In the instant proceedings, the defendants again, in addition to a general denial, specifically denied the fact of employment and the joint proprietorship of the business. The defence was filed prior to Deputy Judge Chan's judgment.

14. By summons dated 18th February 2003 the plaintiff sought an order striking out such parts of the defence as were inconsistent with the decision of Deputy Judge Chan on the grounds that to relitigate those issues would be an abuse of the process of court. That summons was listed for hearing prior to the commencement of the trial on 5th March 2003. Neither defendant appeared.

15. Order 18, Rule 19 provides

(1) The Court may at any stage of the proceedings order to be struck out ... anything in any pleading...on the ground that -

(d) it is otherwise an abuse of the process of the Court.

16. For an assertion of issue estoppel to succeed, it must be established that there has already been a judicial decision of a final character by a court of competent jurisdiction relating to the same question between the same parties as that sought to be put in issue afresh - see Zeiss Stiftung v Rayner & Keeler (No. 3) [1970] 1 Ch. 506 @ 538G. To seek to relitigate a cause which has already been finally adjudicated upon in such circumstances would be an abuse of the process of the court - ibid @ 537C and see Greenhalgh v Mallard [1947] 2 All ER 255.

17. The issues at which the summons in the instant matter was directed fell four-square within these tests. In the circumstances, I exercised my discretion to strike out from the defendants' defence paragraphs 2, 3(a), 3(c) 5 (a) to (d) and 5, insofar as it related to paragraph 5 of the plaintiff's Statement of Claim. The effect was to leave only two matters for consideration - causation and quantum.

CAUSATION

18. The defendants failed to appear for the trial. They were notified of the trial date by notice dated 28th February 2003 from the court, by letter dated 1st March 2003 from the plaintiff's solicitors and, in the case of 1st defendant, orally by his then solicitor on 3rd March 2003.

19. The plaintiff alleges that the incident occurred as a result of negligence and/or breaches of contractual duty and/or breaches of statutory duty by the defendants or their servants or agents. Particulars appear at paragraphs 8 to 10 of the Statement of Claim.

20. The only evidence is that the plaintiff was about his employment, carrying an item up the flight of stairs above which was 1st defendant and a number of metal tubes: one of those tubes hit the plaintiff's head in the course of its descent. Whether it was pushed, thrown, dropped or inadvertently allowed to fall by 1st defendant is unknown, but inanimate objects do not suddenly take flight.

21. There can be no doubt that allowing to fall, or failing to prevent from falling, an object of the nature of the metal tube into an area where the plaintiff would reasonably have been expected to be executing the instructions given to him, in the course of his employment, constitutes a breach of the duties as alleged for which the defendants are liable to compensate the plaintiff.

22. Although not raised in the defence, it is apposite to indicate that this is a not a matter where contributory negligence could be found on the part of the plaintiff.

QUANTUM

23. The nature of the plaintiff's injuries and the treatment he received for them appear in paragraphs 5 and 6 supra as extracts from the hospital reports. There was further evidence in the form of a medical report by Dr Edmund WOO who examined the plaintiff on 18th September 2000. There is no more up to date medical report.

24. Dr WOO relates the plaintiff as complaining of (i) a headache "present most of the day" which is aggravated by physical exertion and which, when severe, may spread forward from the vertex to the temples, with associated nausea; (ii) memory impairment; (iii) irritability and short temper; and (iv) a feeling of generalized weakness. Dr WOO's neurological examination showed "mild impairment in test of memory only" with all other tests of cognitive function described as normal. No other abnormality was detected.

25. In summary, his opinion was that the plaintiff had sustained a mild head injury with no significant impairment of consciousness or post-traumatic amnesia; he had made a good recovery in the intervening period; further significant improvement in the residual headache, irritability and impaired memory was not to be anticipated; no specific treatment would be available; the plaintiff should be able to resume his pre-accident job as a mechanic but impaired memory may limit performance and headaches may require periodic rests; most recovery of neurological functions occur within a year of a head injury although minor improvement can continue for up to two years; the plaintiff would have been able to resume gainful employment after 12 months.

26. When dealing with his present condition the plaintiff testified that he still suffers from the headaches on an almost continual basis, with varying intensity. Contrary to what he apparently told Dr WOO, that he took proprietary analgesics to relieve the headache, he says that he visits various practitioners to obtain medication. He testified that his memory loss and irritability/short temper remain: he is still not so physically strong, generally, as he was before the accident.

27. He went on to relate, in some detail, two incidents which he says occurred in June/July and November/December last year when he lost consciousness for, in each instance, a period of about an hour. He accepted that he had not related these incidents to his solicitors but said that he had told TSANG Mei Tai. Nothing appears in her witness statement about either incident - understandably in respect of the second incident for the statement is dated 24th July 2002 - nor when she testified in Court did she make any mention of the reports said to have been made to her. He says he did not really think about whether these incidents were relevant to his claim: this sits uneasily with the obvious care which he has taken to retain receipts in respect of medical expenses in the Mainland.

28. I had the distinct impression that the plaintiff exaggerated the extent of his current problems. I am not persuaded that the fainting spells in 2002 even occurred: if they did, there is simply no evidence at all to link them with the injury sustained over four years previously. There is no suggestion in Dr WOO's report that the plaintiff's condition may deteriorate in any manner: indeed, its tenor is that, by 2000, his condition has stabilized.

29. I do not doubt that the plaintiff has some headaches nor do I question Dr WOO's assessment of continued irritability and impaired memory, although I bear in mind that he would have relied upon the plaintiff's subjective assessment of each of these features. The claimed inability to lift weights appears to be linked to the exacerbation of the headaches by exertion. He appears to have suffered minimal, if any, loss of social amenities consequent upon the injury, even on his own tentative evidence in this regard.

PSLA

30. The plaintiff says that his injuries fall just short of the "serious injury" category (LEUNG On & Another v CHAN Pui-ki [1996] 2 HKC 565) and are deserving of an award of $350,000.00 in respect of pain, suffering and loss of amenities of life. I was referred to IP Shuk-hing v YUEN Yuk-wai & Another HCPI216/1999 and Courbet v Mandarin Divers Marine Services Limited & Others HCPI677/2000 as indicators of the level of compensation in matters involving head injuries where there were not disastrous consequences.

31. The level of the injuries sustained by the plaintiff appear to me to be mild, interfering with the plaintiff's enjoyment of life to a lesser extent than he would have me believe. In my judgment, the proper award under this head is one of $250,000.00.

Pre-trial loss of earnings

32. This falls into two parts: the period of absence from work which Dr WOO expressed as being justifiable and the further period of actual absence. Different considerations apply to each period.

The first 12 months

33. Dr WOO opined that after 12 months the plaintiff would have been able to return to his previous occupation. Deputy Judge Chan accepted that when he considered this issue. I am content to do so, too.

34. The plaintiff claims compensation based on the remuneration he received whilst employed by the defendants. That was $150.00 a day plus the value of a meal and accommodation. He values that at $50.00 a day based, no doubt, on Deputy Judge Chan's assessment. I regard that as realistic. For the sake of clarity let me say that I would use that figure if the rate of remuneration he was receiving in Hong Kong were the correct rate upon which to base the calculation for this period of loss. In my judgment that is not the correct rate to apply.

35. Prior to the visit to Hong Kong during which he was injured, the plaintiff was employed, in the Mainland, as a machine maintenance mechanic in a factory where umbrellas were manufactured. He had commenced that employment in 1995: he says so and there is a form of certificate to that effect from his apparent employer. In 1995 his monthly salary was Rmb1,000.00 in addition to which he received food, accommodation and an annual "double pay" bonus. He claims in his Revised Statement of Damages and says in his witness statement, and I accept, that as at December 1997 he was earning Rmb1,000.00 per month plus the other perks the value of which he fixes at a like amount. It may be that a further illustration of his propensity for exaggeration is to be found here: in his oral evidence he claimed to have been earning Rmb1,600.00 to $1,700.00 a month. Be that as it may I accept that his annual income as at December 1997 was [(wages and bonus)1,000.00 x 13] + [(food and accommodation) 1,000.00 x 12] Rmb25,000.00.

36. The plaintiff took three months unpaid leave from his employment in the Mainland to come to Hong Kong. He says, and his then employer supports this, that his job would have been available to him on his return. The very day he arrived in Hong Kong he was making enquiries about employment here. The following day he was interviewed and moved into accommodation at the yard, starting work within 72 hours of his arrival. It would be ignoring reality to suggest that, in coming to Hong Kong, he had any purpose other than finding work, and that at a rate far in excess of that he was receiving in the Mainland. He accepts in his witness statement that he knew he was here on a visitors permit and that this was conveyed to 1st defendant when the initial approach was made to him.

37. It follows that both he and 1st defendant were fully aware of what Deputy Judge Chan described as the "unlawful or illegal" nature of the employment. The Deputy Judge exercised his discretion under sec. 2(2) of the Employees Compensation Ordinance, Cap. 282, to deal with the matter as if the plaintiff had been employed under a lawful agreement. Issue estoppel does not apply to that decision.

38. The issue of whether a claimant employed contrary to law is entitled to recover damages for loss of that income consequent upon an injury has been considered by numerous courts in different jurisdictions. After tracing the history, development and exceptions to the ex turpi causa rule, Robertson, JA, in Still v Minister of National Revenue 1997 CasrwellNat 2193 said:

"With respect to the illegal actions of a plaintiff, the application of ex turpi causa has been much curtailed. Justice McLachlin in Hall v. Hebert, [1993] 2 S.C.R. 159 (S.C.C.), at 169 explained the new rationale:

My own view is that courts should be allowed to bar recovery in tort on the ground of the plaintiff's immoral or illegal conduct only in very limited circumstances. The basis of this power, as I see it, lies in [sic] duty of the courts to preserve the integrity of the legal system, and is exercisable only where this concern is in issue."

39. I was referred to three local decisions: CHAN Cheuk-ting v Analogue Engineering Co. Ltd & Another [1986] HKLR 935 - in which the deceased was an illegal immigrant but this was unknown to his employer; LILIK Andayani v CHAN Oi-ling HCLA96/1999 - which dealt with the enforceability by the employee of a claim for wages against her employer and thus is of limited relevance to the present issue; and CHUNG Man-yau & Another v Sihon Company Ltd [1997] 1 HKLRD 1221 - in which a number of earlier decisions were considered.

40. Mortimer, V-P, said this, page 1227D:

"As I see it [the principles] are these. The court must examine all the circumstances - the nature of the illegality complained of, the moral and criminal culpability and the plaintiff's conduct. Also any relevant legislation must be considered. Having done that the court must decide whether in all those circumstances it would affront the public conscience or offend the ordinary right-thinking citizen if compensation for the loss concerned is awarded."

and, at 1228B

"Finally, the court should not be astute, it seems to me, to deprive a plaintiff who has been injured and disabled through no fault of his own, from recovering his proved loss save in a clear case."

(see also CHIU Wing-sze v CHAN Ying-wai & Another [2001] 2 HKLRD 92 @100D)

41. In this matter the plaintiff came to Hong Kong for the purpose of taking up employment. He was previously a long-term resident of Guangdong Province employed there: it is unrealistic to suggest that he would have been unaware of the unlawful nature of his proposed employment in Hong Kong. He accepts that both he and 1st defendant were aware of his status as a visitor when he took up the employment. Employment of persons not lawfully employed is a matter of concern which features regularly in the public domain. The specific legislation which deals with the plaintiff's breach of condition of stay is sec. 41 of the Immigration ordinance, Cap. 115, which provides for both a fine as well as imprisonment for a maximum of two years.

42. In these circumstances it seems to me that the ordinary right-thinking Hong Kong citizen would regard it as unfair for the plaintiff to be deprived of compensation.

43. However, considering those same circumstances together with the facts that, firstly, assuming the plaintiff would have returned to the Mainland on expiration of his visa, the employment had less than a month to run, and, secondly, the plaintiff's employment was, in any event, tenuous given of the risk of discovery and instant termination of employment, it seems to me that that same ordinary right-thinking Hong Kong citizen would be offended by the notion that the plaintiff should profit by the compensation.

44. Robertson, JA, in Still said this:

"... where a contract is expressly or impliedly prohibited by statute, a court may refuse to grant relief to a party when, in all of the circumstances of the case, including regard to the objects and purposes of the statutory prohibition, it would be contrary to public policy, reflected in the relief claimed, to do so.

... the doctrine of illegality rests on the understanding that it would be contrary to public policy to allow a person to maintain an action on a contract prohibited by statute... Public policy is, of course, a variable concept which is more easily illustrated than defined...In the present case, the public policy dimension manifests itself in two ways. The first is reflected in the strongly held belief that a person should not benefit from his or her own wrong. This is an alternative way of expressing moral disapprobation for wrongful conduct. The second rests in the understanding that relief should not be available to a party if it would have the effect of undermining the purposes or objects of the two federal statutes which are involved in this judicial review application.

Moral disapprobation is likely to arise in those cases where a person gains entry to this country through stealth or deception, obtains employment and then seeks unemployment benefits after losing his or her job. Public policy, of course, cannot be equated with public opinion. But there are occasions when community values are rationally supported and not reflective of a "knee-jerk" reaction to a multi-layered problem. While moral disapprobation of employment obtained in flagrant disregard of [local laws] is not an unreasonable policy consideration, this sentiment should not be permitted to degenerate into the belief that everyone who gains [unlawful] employment ... should be so judged."

45. In my judgment this plaintiff's situation is addressed by compensation being calculated in accordance with what he would have earned in his lawful Mainland employment during the equivalent period for that, in truth, is his real loss.

46. It is no answer to say that in adopting such a method of calculation the defendants will "benefit" as a result of the application of the lower rate. The fundamental purpose of compensation is to put a claimant in the position he would have been in had the incident giving rise to the claim not occurred. The plaintiff had no legitimate expectation of continued remuneration at the elevated, Hong Kong level but, on the evidence, he was in regular employment on the Mainland which has been disrupted as a consequence of the injuries he sustained at the hands of the defendants.

47. In the circumstances the award for the plaintiff's loss of earnings for the period March 1998 to February 1999 is $25,000.00.

Past loss of earnings from February 1999 to date of trial

48. The plaintiff has given detailed evidence about his inability to work due to his post-accident condition. It is his case that when he sought to return to his former employment and disclosed the fact that he had been involved in this incident, that employment was terminated. This is borne out by a letter from his erstwhile employer. Other than odd jobs for limited periods he has not worked since the incident.

49. The plaintiff has calculated this portion of his claim on a notional present salary of $3150.00 per month, which is borne out by a letter from his erstwhile employer. This results in a median notional income throughout the period of $2,616.50 per month. Over a period of 48 months the total gross loss is $125,592.00. Against this must be set his small amounts of income earned in temporary jobs. His oral evidence is vague as to just what periods he worked and the exact amount of income he earned: the one fact of which he was sure is that he has not even attempted to look for work since July 2002. His witness statement is a little more precise. I bear in mind his tendency to advance his own case. Doing the best I am able with such as is before me, it seems to me that his real income is likely to have been not less than $6,000.00 over the four year period. Thus I assess the net loss for the second portion of pre-trial loss of earnings as $119,592.00.

Future loss of earnings

50. The plaintiff was 19 at the time of the incident and is now 24 years old: a multiplier of 16 is claimed. 15 would be appropriate.

51. The monthly rate of remuneration is, as above, $3150.00. The plaintiff suggests that he has a prospect of earning $500.00 a month in future. I regard that as artificially low and consistent with his exaggeration of his claim. I accept that he has residual problems, as I have indicated. I do not accept, however, that he is inhibited in employment to the extent he suggests. Even though he bears the onus to prove his claim, the plaintiff has adduced no medical evidence to support his claim: such as there is comes from Dr WOO, is well over two years old and does nothing to assist the plaintiff's present allegations. Moreover, it is noteworthy that the claimed past medical expenses have decreased sharply since 1998/1999 which is not consistent with the plaintiff's claims of lack of improvement. If the fainting spells occurred last year, there is no evidence to suggest that they were caused by the incident in February 1998: the plaintiff accepts that since July last year he has made no effort to look for employment.

52. Doing the best I am able on the evidence before me I can see no reason why the plaintiff should not obtain work resulting in remuneration equivalent, at the very least, to one third of his previous income, $1050.00 per month. The award for future loss of earnings is thus [($3,150.00 - $1,050.00) x 12 x 15] $378,000.00.

Loss of future earning capacity

53. In view of the preceding award, none is appropriate under this head. See the judgment of Keith, JA, in Yu Kok Wing v Lee Tim Loi [2001] 2 HKLRD306 @ 313B:

"If there was such a risk, the plaintiff was entitled to an award for loss of future earning capacity to the extent that that loss had not been reflected in the award for loss of future earnings" [emphasis supplied]

Past expenses

54. Madam TSANG Mei Tai testified that she had paid the hospital an amount of "about $2,000.00". She lives in Hong Kong. The hospital is in Hong Kong. Yet no attempt appears to have been made to establish the precise amount paid, or even the fact of payment. Similarly, for the payment said to have been made to Chiu Luen pharmacy. Nor is it possible to reconcile the receipts produced by the plaintiff at trial for apparent medical treatment in the Mainland with the schedule of payments annexed to his witness statement and the amount claimed: the receipts appear to support a claim for $5,433.50. I propose to allow a, somewhat arbitrary, lump sum of $10,000.00 in respect of all of the items claimed under this head.

Future expenses

55. $20,000.00 is claimed. The plaintiff's schedule to his witness statement indicates an amount of approximately $900.00 per annum has been paid in respect of treatment on average over the last three years. Applying the same multiplier, the award is $13,500.00.

SUMMARY

56. Thus the total of the plaintiff's damages is

PSLA	$250,000.00
Past loss of earnings (1998-1999)	25,000.00
Past loss of earnings (1999-2003)	119,592.00
Future loss of earnings	378,000.00
Past expenses	10,000.00
Future medical expenses	13,500.00
Total	$796,092.00

THE EMPLOYEE'S COMPENSATION AWARD

57. The evidence before me is that no payment has been made by the defendants notwithstanding that the plaintiff was awarded $118,799.40. It has been suggested that, as a consequence of non-payment, I should ignore the award. Were I to do that, the effect would be that the plaintiff would have two judgments, enforceable against the defendants, for an aggregate amount which exceeds the total of the damages she has suffered. That cannot be right. Whilst it may well be open to the defendants to return to court to seek a variation of the judgments, that situation is avoided simply by making an appropriate order at this stage. The proper course to follow is for the amount of the other award to be deducted from the aggregate damages.

58. For the purposes of the awards I have assumed parity between the Remnimbi and the Hong Kong Dollar.

59. There will be judgment for the plaintiff, against the defendants jointly and severally, in the sum of $677,292.60 with interest on the special damages at half the judgment rate from the date of the accident, and interest on the general damages at 2% per annum from the date of writ.

60. Costs of the plaintiff, as taxed or agreed, to be paid by the defendants jointly and severally.

61. The costs order shall be an order nisi with liberty for any party to restore for argument on notice given within 14 days of this judgment.