MOHAMMAD JAVED v. LO KUI CHEUNG AND ANOTHER

DCEC 1230/2014
DCPI 1995/2014
(Heard Together)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1230 OF 2014

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IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 1995 OF 2014

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DECISION

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INTRODUCTION

1.  There are 6 Summonses before me, 3 of them were issued by each of the parties respectively in the employees’ compensation action numbered DCEC 1230 of 2014 (“EC Action”), and the other 3 were issued by each of them in the personal injury action numbered DCPI 1995 of 2014 (“PI Action”).

2.  The question to be determined in these 6 Summonses is basically whether the EC Action and the PI Action shall be struck out on the ground that they were commenced out of the statutory time limit, or the court shall receive and determine these two actions notwithstanding that they were time-barred. 

3.  The accident that caused the injury which was the subject of the present claims happened on 2 August 2010 (“the Accident”).  The EC Action and the PI Action were taken out on 17 June 2014.

4.  The EC Action was commenced 22.5 months after the expiry of the statutory required period of 24 months under section 14(1) of the Employees’ Compensation Ordinance, Cap 282 (“ECO”).

5.  The PI Action was commenced 11.5 months after the expiry of the statutory time limit as required under section 27(4)(a) of the Limitation Ordinance, Cap 347 (“LO”).

6.  The parties in these two actions are the same.  I will refer them respectively as the Applicant, the 1^st Respondent and the 2^nd Respondent. 

THE LEGAL PRINCIPLES

EC Action - section 14 of the Employees’ Compensation Ordinance

7.  Section 14(1) of the ECO requires an employee who was injured in the course of employment and intends to claim compensation under the ECO to apply to the court within 24 months from the occurrence of the accident, failing which, proceedings for recovery under the ECO for the injury shall not be maintainable. 

8.  Another requirement under section 14(1) of the ECO is that the employee shall give notice of the accident to the employer as soon as practicable after the accident.  There was no dispute that the 1^st and 2^nd Respondents were aware of the Accident shortly after it was happened.  This is, therefore, not an issue in the present claims.

9.  Section 14(4) of the ECO provides that notwithstanding the non-compliance of section 14(1), the court may receive and determine an application for compensation under the ECO if it was satisfied that “there was reasonable excuse for the failure so to give notice or to make an application, as the case may be”. 

“Reasonable Excuse”

10.  The often cited and applied passage about the interpretation of “reasonable excuse” in section 14(4) of the ECO was the following judgment of His Honour Judge Charles in the case of Wong Man-tak v Shaws & Sons Limited [1957] DCLR 85 at page 88 to 89: -

“A reasonable excuse in the ordinary sense of the phrase means in relation to a failure by an applicant to make his application for compensation within the prescribed period if the failure was due to such cause or causes that it ought, as a matter of reason, to be excused. …… Moreover, an applicant was not excused if he had a reasonable cause which operated only for part of the period. He had to have reasonable causes for the whole period. Thus while an applicant might delay making his claim until the last moment of the prescribed period, he was not entitled to be excused if his last moment claim was prevented by a reasonable cause unless he could show that he had good reason for not making his claim before that cause arose. Aldridge v Warwickshire Coal Company and Aston v London North Eastern Railway. The principles to be deduced from the foregoing is, I think, that an applicant has a reasonable excuse for not making an application to the court for compensation within the prescribed time if his failure was due to a cause or causes other than unreasonable conduct or an unreasonable decision on his part.”

[See also: Kwok Yau-tai v Tung Wah Group of Hospitals, DCEC 44 of 2000, 11 April 2002, per His Honour Judge Carlson; Chu Suk Han v Szeto Wai Yin and Wong Yun Wa both trading as Wing Tat High Fashions Trading Co, DCEC 402 of 2002, 16 October 2002, per Deputy District Judge W Chan]

11.  The power to extend time under section 14(4) of the ECO is discretionary.  The court has to take into account of the circumstances both before and after the expiry of the statutory time limit.  In the exercise of its discretion whether to extend time, a court would not assist a party who has slept on his rights. [See: Lau Suet Fung v Future Engineering Co, CACV 110 of 2003, 6 February 2004 at paragraphs 62 to 69]

12.  The Court of Appeal in Tsang Loi Fat (transliteration) (曾來發) v Sun Fook Kong (formerly known as Sung Foo Kee Limited (新福港（前名為孫福記營造有限公司）[2011] 4 HKLRD 336, English translation at 344, has set out the following non-exhaustive list of factors that are relevant in considering whether an applicant has a reasonable excuse for the failure to commence the proceedings within the prescribed time:-

(1) reason for the delay;

(2) length of the delay;

(3) whether there is sufficient ground to support an      award of employees’ compensation to the applicant;

(4) any prejudice to the respondent if an extension of time is granted.

13.  The Court of Appeal further listed the following common but non-exhaustive factors that have to be taken into account when consider the reason for the delay:-

“(1) The age, education level, intelligence and background of the Applicant;

(2) Generally speaking, Applicant’s ignorance of the law is not a reasonable excuse for the delay. On the contrary, if the Applicant is sufficiently learned and knows how to make a claim, but fails to do so within the prescribed period, this is a factor to support the contention that the Applicant has failed to provide a reasonable explanation for the delay;

(3) The health condition of the Applicant, whether he was fully aware of the extent of his injury before the expiry of the prescribed period for the claim; or whether his failure to make the claim before the expiry of the prescribed period is because of his illness; and

(4) Whether the Applicant’s failure to make a claim before the expiry of the prescribed period was induced by the conduct of or words said by his employer, insurance company, or a third party.”

14.  It is well established that ignorance of the rights to claim is generally not considered a reasonable excuse for the delay. [Tsang Loi Fat (transliteration) (曾來發) v Sun Fook Kong (formerly known as Sung Foo Kee Limited (新福港（前名為孫福記營造有限公司）, supra, Roles v Pascall & Sons (CA) [1911] 1 KB 982; Chan Wing Chuen v Sun Cheong Bleaching & Dyeing Factory Ltd [1989] HKDCLR 55; Tsui Man Cheong v Lee Hung Ying Vicky trading as Fei Tsui Transportation Company, DCEC 1290 of 2008, 21 September 2009, at paragraph 6.]

PI Action - Sections 27 and 30 of the Limitation Ordinance

15.  The statutory time limit to commence the PI Action is governed by section 27(4)(a) of the LO which provides that the time limit for commencing the PI Action shall be 3 years from the date on which the cause of action accrued, that is the date of the Accident in the present case.

16.  In Donovan v Gwentoys Ltd [1990] 1 WLR 472 at 479, Lord Griffiths held that:-

“The primary purpose of the limitation period is to protect a defendant from the injustice of having to face a stale claim, that is a claim he never expected to have to deal.”

17.  The court has the power, under section 30 of the LO, to override the statutory time limit if it appears that it would be equitable to do so.  The court shall have regard to all the circumstances in particular to the following matters listed out in section 30(3)(a) to (f):-

(1) length of and reason for the delay;

(2) extent to which, having regard to the delay, the evidence adduced or likely to be adduced by any of the parties, is or is likely to be less cogent than if the action had been brought within time;

(3) conduct of the defendant after the cause of action arose, including the extent, if any, to which he responded to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were or might be relevant to the plaintiff’s cause of action against the defendant;

(4) duration of any disability of the plaintiff arising after the date of accrual of the cause of the action;

(5) extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable of giving rise to an action for damages; and

(6) the steps, if any, taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received.

18.  The court performs a balancing exercise to weight the degree of prejudice to each party, to consider the six factors in section 31(3) of the LO listed above and all the circumstances of the case to determine whether it would be equitable to disapply the limitation period.  The court’s discretion is wide and unfettered.  [Mok Lai Fong v Ng Po Sui [2011] 3 HKLRD 67 at paragraph 46; Leung Tai Sang v Hospital Authority HCPI 481 of 2004, 30 June 2005].

THE FACT

The Applicant’s case

19.  The Applicant was born and educated in Pakistan.  He left school at the age of 17 and came to Hong Kong in 1992.  His native language is Urdu and Punjabi.  He speaks some Cantonese and some English.  He married in 1994 at the age of about 20.  When the Accident happened, he was 36 years old, a father of 5 children and has been in Hong Kong for about 18 years.

20.  At the time of the Accident, the Applicant was employed by the 1^st Respondent as a driver.  His employment with the 1^st Respondent commenced in January 2010. 

21.  Prior to his employment with the 1^st Respondent, the Applicant had worked for a number of other employers and contractors in Hong Kong.  He had experienced a previous accident at work and sustained injury in 2001 and was hospitalized for a few days.

22.  The 2^nd Respondent carried on business as a retailer of electrical and other home products.  The 2^nd Respondent sub-contracted part of the work at its warehouse (“Warehouse”) to the 1^st Respondent for the delivery of goods from the Warehouse to the local shops by truck.

23.  On 2 August 2010, while the Applicant was working in the Warehouse, he fell and fractured his right ankle. 

24.  The Accident was reported to the 1^st Respondent by a colleague of the Applicant.  A written Incident Report was prepared on the same date by Mr Wong Wan Leung (“Mr Wong”), an employee of the 2^nd Respondent at that time.

25.  On the date of the Accident, the police had arrived at the scene.  According to the records in the notebook of the police officer, Labour Department was notified.  The Labour Department officer told the police officer on the same date that they would not attend the accident scene to carry out the investigation.

26.  The Applicant was granted sick leave of about 3 months from 2 August 2010 to 4 November 2010 (“Sick Leave”).  Thereafter, he resumed works with the 1^st Respondent, doing the same job as before the Accident for another 9 months.

27.  His employment with the 1^st Respondent was terminated on 1 August 2011.  The Applicant said that he was fired by the 1^st Respondent.  However, the 1^st Respondent contended it was the Applicant who quitted the job because the date of 1 August 2011 marked the beginning of the month of Ramadan in which all Muslims have to fast.

28.  The Applicant then found another job as an operator of a loader for a MTR tunnel project and started work on 7 October 2011. 

29.  The Applicant contended that he was not paid by the 1^st Respondent for the period of the Sick Leave.  This was disputed by the 1^st Respondent. 

30.  The Applicant said that he did not complain to the Labour Department about the Accident because:-

(1) he was not familiar with the procedure;

(2) the 1^st Respondent had asked him not to make a complaint;

(3) the 1^st Respondent had said that he had no insurance and therefore the Applicant did not think it was worth asking anything about getting the money.

31.  The Applicant said he only came to know that he could claim for the injury sustained in the Accident when he was so advised by his lawyer, Mr Burke, at a meeting on 6 November 2013 held in relation to a work place accident happened on 3 October 2013 (“Further Accident”).  Mr Burke was introduced to him by a friend after the Further Accident.

32.  The Applicant then applied for legal aid, which was granted on 8 April 2014.  He also said that he could not afford to instruct a private lawyer, and therefore the funding of legal aid was required.

33.  The Applicant said that he did not know the full name of the 1^st Respondent and only referred to him as “Ah Hung”. The 1^st Respondent had taken him home once during Chinese New Year.  The Applicant would normally park the truck near the home of the 1^st Respondent. The Applicant eventually came to know the full name of the 1^st Respondent with the help of Mr Burke by conducting a search on the registration of vehicle owned by the 1^st Respondent.

34.  A letter before action was sent by the Applicant on 13 May 2014.  The Applicant took out the EC Action and the PI Action on 17 June 2014.

35.  Mr Burke, solicitor for the Applicant, argued that the Applicant’s delay was attributable to the 1^st Respondent’s failure to notify the Labour Department by filing a statutory form (Form 2) after the Accident in accordance with section 15 of the ECO. 

The Respondents’ case

36.  The Respondents did not dispute that the Accident had happened.  They criticized the Applicant’s explanations for delay as inconceivable and unreasonable. 

37.  The 1^st Respondent said that he had paid the Applicant the full monthly wages in the sum of HK$11,000 during the period of his Sick Leave, which was more than the Applicant’s entitlement under the law.  The Applicant further asked for compensation in the sum of HK$30,000.  The 1^st Respondent counter-offered to pay HK$20,000 which was accepted by the Applicant in settlement for the compensation of his injury.  This settlement arrangement was denied by the Applicant.

38.  The 1^st Respondent denied that he had asked the Applicant not to make a complaint or told the Applicant that he has no insurance.

39.  The Respondents submitted that due to the substantial delay, crucial witnesses and relevant evidence were lost.  It was prejudicial against them if the actions were allowed to continue. The Applicant’s then colleague who witnessed the Accident has left the employment with the 1^st Respondent and the 1^st Respondent has lost his contact.  Mr Wong, the logistic officer who made the Incident Report for the 2^nd Respondent has also left the employment and could not be located despite the 2^nd Respondent had written to him and asked for his assistance in giving evidence for the case.  The Warehouse is no longer in existence, and the CCTV recordings of the Warehouse at the time of the Accident had already been overwritten due to the lapse of time.

THE DISCUSSION AND THE EXERCISE OF DISCRETION

The EC Action

Length of the Delay

40.  The length of the delay, being 22 months and 11.5 months respectively, are substantial delay.

Reason for the Delay

“Not familiar with the procedures”

41.  One of the Applicant’s reasons for the delay was that he “was not familiar with the procedures”. Miss Lau, counsel for the Respondents submitted that this was different from saying that the Applicant did not know that he has the right to report to the Labour Department, to seek help if necessary and to demand compensation. 

42.  Miss Lau further referred to the Applicant’s experience in working in Hong Kong, his previous experience of industrial accident which resulted in hospitalization as well as the events happened after the Accident, and submitted that the Applicant’s allegation of him not knowing the rights or the procedures is merely a “convenience excuse”, but not a “reasonable excuse”.

43.  Reading the phrase “not familiar with the procedures” plainly, it suggested that what the Applicant did not familiar with, was how to make the claim, but not his right to claim.  Even if we give the Applicant’s words a broad interpretation and consider it as bearing the meaning that the Applicant did not know the right to claim, it did not assist the Applicant.  As accepted by Mr Burke, it was well established that ignorance of the rights to claim is not a reasonable excuse for the delay to make an employees’ compensation claim.

Non-filing of Form 2

44.  Mr Burke criticized heavily on the 1^st Respondent’s failure to file the Form 2 under section 15 of the ECO, and argued that the Applicant’s delay was directly attributable to the non-filing of the Form 2 by the Respondents.

45.  Form 2 is a notice that an employer shall give to the Commissioner for Labour of any accident that resulted in total or partial incapacity of an employee, irrespective of whether the accident gives rise to any liability to pay compensation.  Failure to file the Form 2 is an offence.

46.  Mr. Burke submitted that if the 1^st Respondent had filed the Form 2, the officers of the Labour Department would have contacted the Applicant after the Accident, he would therefore have the assistance of the officers of the Labour Department in lodging the claim.

47.  Mr Burke argued that the filing of Form 2 is a statutory requirement, and according to him, the purpose of Form 2 was to set in motion a train of events after the injury and in the course of these events, the Applicant would come to know his right and how to make the claims.  He submitted that since the Respondents have been in default of the filing of Form 2, the Applicant has a reasonable excuse under section 14(4) of the ECO. 

48.  The statutory provisions, however, did not support Mr Burke’s argument.  The filing of Form 2 and the claim for compensation are treated in the legislation as two separate matters and are not linked with each other.  It is expressly provided in section 15(1) of the ECO that the filing of the Form 2 is required irrespective of whether the accident gives rise to any liability to pay compensation (section 15(1) of ECO). Section 15(7) of the ECO expressly provided that nothing contained in section 15 shall prevent any person from making a claim for compensation under the ECO. 

49.  Mr Burke relied on the Court of Appeal decision of Lau Suet Fung v Future Engineering Co, CACV110 of 2003, 6 February 2004.  The case of Lau Suet Fung did not support Mr Burke’s argument. 

50.  In Lau Suet Fung, the injured employee had not filed the claim for compensation within the statutory time limit.  The Commissioner for Labour had proceeded to make an assessment for compensation to the injured employee in the absence of a claim apparently because the employer had filed a Form 2. 

51.  The learned Yuen JA set out in the judgment what she understood from counsel to be apparently the practice in cases where an employee was injured in an accident arising out of and in the course of employment.  The learned Yuen JA expressly stated that the assertion of the counsel for the employee about the practice may or may not be correct. 

52.  Both the statutory provisions and the decision of Lau Suet Fung did not support Mr Burke’s argument that the purpose for the filing of Form 2 is to set in motion a train of events leading to or enable the injured employee to make the claim for compensation.

53.  It is an offence under Section 15 of the ECO if the 1^st Respondent failed to file the Form 2 with respect to the Accident. However, the default in the filing of Form 2 in this case was not a reasonable excuse for making the claim out of time.

Background and experience of the Applicant

54.  The Applicant may have received limited education, but he is not inexperienced of workplace or industrial accident.  The Applicant has been in Hong Kong for about 18 years, having a family here with 5 children.  He had been in gainful employment with different contractors or employers over the years.  He had experienced an industrial accident in 2001 whereupon he was hospitalized for a few days.  He said he had not made any legal claim on that occasion because he was paid his sick leave.  With the experience of this previous accident, the Applicant at least would have known his rights as a worker to receive sick leave pay.

55.  The Applicant had continued to work for the 1^st Respondent for 9 months after the expiry of the Sick Leave.  If the Applicant had not been paid for the Sick Leave as he alleged, one would expect that he would seek help or demand the pay from the 1^st Respondent. It is unlikely that he would continue to work for 9 months thereafter without any complaint.

56.  Having regard to the Applicant’s background and experience, I do not accept his allegation that he did not know he could make a claim for his injury in the Accident.  In any event, ignorance of the rights to claim is not a reasonable excuse.

Knowledge of the 1^st Respondent’s full name and address

57.  The Applicant contended that he did not know the full name and address of his employer and argued that these are reasonable excuses for not making the claim within the statutory time limit.

58.  After the Accident, the Applicant had kept in contact with the 1^st Respondent.  According to his own evidence, he continued to work for the 1^st Respondent for another 9 months after the expiry of the Sick Leave.  The Applicant was not entirely ignorant of the 1^st Respondent’s address.  He had been to the 1^st Respondent’s home upon his invitation.  He used to park the vehicle near the home of the 1^st Respondent.  He knew the way to go back to the area of the 1^st Respondent’s residence and identified his vehicle there.  The Applicant could easily ascertain the full name and address of the 1^st Respondent after the Accident if he wanted to.  This is not a reasonable excuse for the delay.

Conduct of the Respondents - whether the 1^st Respondent asked the Applicant not to complain

59.  The Applicant contended that on the same date of the Accident while he was still in hospital, he received a telephone call from the 1^st Respondent.  The 1^st Respondent said to him that he should not make any complaint about the Accident as the 1^st Respondent did not have insurance.  Therefore, the Applicant “did not think it was worth asking anything about getting the money”.  The 1^st Respondent denied that he had made the above statements.

60.  Apart from the parties’ bare assertions, there was no evidence at all to support or negate the assertion.  This matter cannot be resolved on affirmation evidence.  

61.  Even if we assume that the 1^st Respondent had actually said those words while the Applicant was in hospital, I am not satisfied that it gives the Applicant a reasonable excuse for the delay throughout the entire period of inaction having regard to all the circumstances of the case, in particular the background of the Applicant and the events happened after the Accident as discussed above. 

62.  On balance, I attach no weight on this point in the exercise of discretion.

63.  Apart from the above, there is no evidence that the Respondents’ conduct caused the delay.

Health condition of the Applicant not an issue for the delay

64.  The Applicant resumed works after the 3-month Sick Leave.  The health condition of the Applicant was not a relevant issue for the delay.

Ground to support the Applicant’s claim

65.  There was no dispute that the Applicant sustained injury in the Accident happened in the course of his employment with the 1^st Respondent.  The parties differed in the extent of liability and whether or not there was contributory negligence on the part of the Applicant.

Settlement

66.  The parties are in dispute on whether a settlement was reached on the Applicant’s claim.  Again, these are only bare assertions of both parties with no documentary or other supporting evidence.  The Respondents did not rely on this ground for the striking out application.  I do not place any weight on this point one way or the other.

Prejudice against the Respondents

67.  The burden is on the Respondents to prove that they would be prejudiced if the actions are allowed to proceed despite the substantial delay.  Bare assertion of any prejudice is not sufficient. [Cheung Yin Heung v Hang Lung Real Estate Agency Limited and others [2010] 3 HKLRD 67 at paragraph 85]

68.  The Respondents contended that due to the substantial delay by the Applicant, the Respondents have lost crucial witnesses and material evidence.  These include the Applicant’s colleague who witnessed the Accident and Mr Wong who prepared the Incident Report.  Both of them had left the employment with the respective Respondents and could not be located. The 2^nd Respondent has adduced documentary evidence to prove its attempts to locate Mr Wong with a view to asking him to give evidence of the Accident but in vain.  As a result of the substantial delay, the Respondents lost the witness who could provide details of what had happened at the Accident, including the positions of the goods and the position of the Applicant at the material time, the way the goods were secured, and the witness who could verify and explain the Incident Report.  Furthermore, the Warehouse was no longer in existence and site inspection is not possible.  The CCTV recordings of the loading bay of the Warehouse had been overwritten by the system due to the lapse of time.  

69.  The details of how the Accident happened would be relevant in the claim and the loss of witnesses and evidence mentioned above are material.

70.  Mr Burke argued that the 2^nd Respondent has the Incident Report and that should be sufficient evidence.  I disagreed. The Incident Report is only a simple record.  There are other details of the Accident not recorded in the Incident Report. 

71.  I am satisfied that the long period of delay affected the cogency of the evidence and the Respondents’ ability to defend the actions.

72.  Having considered all the relevant circumstances of the case, I am not satisfied that the Applicant has any reasonable excuse for the substantial delay.

The PI Action

73.  The grounds that the Applicant put forward to justify the delay in lodging the PI Action were the same as those put forward in the EC Action.

74.  The above considerations and balancing exercise apply, mutatis mutandis, to the PI Action.  In summary, the length of delay was substantial.  I have considered the Applicant’s reasons for delay above. I found that it was not equitable to disapply the limitation period on those reasons.  The cogency of evidence is very likely to be adversely affected as a result of the long delay.  I do not accept that the Applicant did not know his right to claim until he was told by Mr Burke.  The inaction of the Applicant after the Accident suggested that he had not acted promptly and reasonably, including the steps to seek advice either from the Labour Department or lawyers.  There was no complaint on the conduct of the Respondents after the Accident (apart from the alleged inducement which I have dealt with above). The issue of disability of the Applicant is not relevant.

75.  Having regard to the above matters and all the relevant circumstances, and having balanced the prejudice to each parties, I am not satisfied that it is equitable to allow the Applicant to continue the PI Action.

CONCLUSION

76.  By reasons of the above, I order that both the EC Action and the PI Action be struck out.  I made an order nisi that the Applicant shall pay the 1^st and the 2^nd Respondents the costs of these applications in both the EC Action and the PI Action to be taxed if not agreed, with certificate for counsel.  This cost order nisi shall become absolute if no application to vary the same is made within 14 days from the date of this decision.  The Applicant’s own costs shall be taxed in accordance with Legal Aid Regulations.

DCEC 1230/2014

DCPI 1995/2014