TSE WA LUNG v. MATSUDEN ENGINEERING CO LTD AND OTHERS

DCEC1109/2000

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 1109 OF 2000

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JUDGMENT

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1. The compensation to the Applicant has been agreed at $141,028. This is without prejudice to his common law claim. The remaining issue is whether the Applicant was employed by the 2nd or the 5th Respondent.

2. The Applicant said that he was originally recruited by one Li Kam Wing. Subsequently Li was not involved. It was R5 who dealt with his work and paid his wages. After he was injured he went to the Labour Department, he was told he would be paid by R3. R5 told him R3 would pay on his behalf. He had not heard of R3 before. He also said he had not worked for R2.

3. Lam Kwok Kwan the proprietor of R2 exhibited the wage sheets and said that the Applicant was not employed by him. He also is a director of a limited company in which the brother of R5 is also a director. Through the introduction of R5 he had sub-contracted 3 projects from R3 as R5 had no manpower and funds to take up those projects. Those 3 projects were:

(1) Wan Ho Street in Kwun Tong;

(2) Duty Free Shop at the airport; and

(3) MTR Choy Hung Station.

4. Ms. Chan Sai Yin sister-in-law of R5 would issue invoices to get payment in respect of those projects.

5. R5 was his friend but had never worked in his firm. In respect of those projects R5 would sometimes collect cheques for him.

6. After he received the fax for interim payment of the Applicant which stated the interim payment was on behalf of R2 he asked R5 to explain. R5 explained that the Applicant was his employee and R3 had paid the Applicant, so everything was alright. He did not take up the matter further as R5 told him the Applicant had declared to the Labour Department and he needed not do anything.

7. Ms. Chan Sai Yin who worked for R2 said she issued R2's invoices in respect of the Kwun Tong, Duty Free Shop and Choy Hung contracts. She was the only person who issued invoices for R2. She had not issued any invoices on behalf of R2 in respect of the Hong Kong University, Tung Chung Crescent nor the Airport Express Kowloon Station projects. She did not nor had authorised anyone to apply chops on the invoices in respect of those projects nor for the documents involved in the present proceedings.

8. R2 had 2 round chops and 2 other chops. One round chop was kept in the van while the other 3 were put in the drawer of her desk.

9. R2 had lent invoices and paper with letterheads of R2 to R5 on a few occasions. She said R5 had no relationship with R2. R5 did not work for R2. R5 collected payments for R2 from R3 because it was R5 who introduced R3 to R2 and R5 always went to R3's office. After R5 collected payment for R2 he would tell her about it.

10. She said she received the document concerning the interim payment to the Applicant, she asked R5 who told her that he employed the Applicant and claimed for insurance. She needed not bother.

11. When R5 borrowed invoices he did not tell her for what purposes he needed those invoices. R5 did not ask for the papers with letterheads. As for chops she said the fokis could always get the chops from her drawer. For letter pads anyone could use them as all workers would tear a few pages to make drawings.

12. Mak Kim Sun on behalf of R3 said that he has known R5 for over 20 years as friend and sub-contractor. He worked for R3 as sub-contractor through R2. The practice of his company is to sub-contract to companies and he would not deal with a particular person. When he was first acquainted with R5 he worked for R2 and he thought R5 still worked for R2. He paid the interim payment to the Applicant on behalf of R2.

13. He said he has known R5 for over 20 years. To him R5 was a person from R2. R5 used R2's name to work for him. R5 told him he was a partner of R2.

14. He did not know Lam Kwok Kwan..

15. From 1998 to 2000 R3 had continuous working relationship with R2.

16. In cross-examination by R5 he agreed that R5 had not worked in the construction site for many years. It was in November 1997 that R5 worked for him in Discovery Park.

17. As to the HKU project R5 said that a lot of the workers worked on their own without a company, for instance, Ah Ching and Ah Sing. He said those have company may be just sole proprietors.

18. He agreed that he gave R5 the Discovery Park project as he trusted him. He did not know R5's detail when he met D5 again. He only considered what amount he had to pay.

19. Shum Hang Yin was an employee of R3, he had to go to the construction sites and also deal with executive works. He said R5 took part in some of the projects. Sometimes he contacted R5 and sometimes Yuen Fu Man.

20. R5 said that he knew Mak Kim Sun for over 20 years when he first started aluminium work business. After a few years the business folded up and he became transportation worker as container trade driver. He quitted his job in 1996. He met Mak again.

21. In 1997 he sub-contracted some work from R3 at Discovery Park. At first he just used ordinary paper to issue his invoices. After a while Mak told him his company had to make entries in his company's accounts in the name of companies and asked him to submit invoices with letterheads of a company. He told Mak he did not have a company and Mak told him to take letterhead papers from R2 to issue his invoices. So he issued invoices with R2's papers. Thereafter he used R2's papers to issue invoices. He got the papers sometimes borrowed from Ms. Chan and sometimes just took a few pieces without informing Chan. The chops were taken from Chan's drawers and placed on the invoices in Chan's absence.

22. The project in which the Applicant was injured was sub-contracted to Tam Hok Wing and he supplied 3 workers including to Tam. He paid all those 3 workers wages.

23. Having considered all the evidence carefully I find on balance that it was R5 who employed the Applicant directly and R2 was not involved for the following reasons:-

(1) R5 had told the Labour Department that he employed the Applicant directly.

(2) For the relevant period neither R5 nor the Applicant was in the payroll of R2.

(3) For the Discovery Park project R5 first used just blank papers to issue invoices for the Discovery Park projects. I accept that it was Mak who suggested R5 to use R2's name so that he could comply with his practice to deal with companies for accounting purposes.

(4) Mak in cross-examination said that it was his practice to do business through a company and R5 used R2's name to work for him. In effect he knew it was R5 who worked for him. As it was his practice to do business through a company so he allowed R5 to use R2's name to work for him.

(5) When R5 put to Mak that in the HKU project Ah Ching and Ah Sing worked on their own, Mak's reply was that they have company may be just sole proprietorship. It goes to show that as long as there is a company name to satisfy his practice of dealing with a company he could not be bothered.

24. In view of my finding I make the following order nisi in respect of costs:-

(1j) The Applicant's own costs to be taxed in accordance with Legal Aid Regulations.

(2) In respect of the application, costs to the Applicant to be borne by R1, R3, R4 and R5.

(3) In respect of the proceedings to determine who employed the Applicant costs to R2 to be borne by R1, R3 and R4.