CHAN KAI MAN v. BAIQIAN INTERNATIONAL HOLDING LTD

DCEC 1612/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1612 OF 2012

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DCPI 660/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 660 OF 2013

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JUDGMENT

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BACKGROUND

1.  By an order made by Master J Chow on 28 May 2015, it was directed that the trial of DCEC 1612/2012 (the “EC Action”) and the trial of DCPI 660/2013 (the “PI Action”) were to be heard together before a bilingual judge.  The EC Action and the PI Action were heard by this court for six days in December 2015 as described above.  Time was then allowed to the parties to prepare their respective closing submissions in writing which were subsequently submitted to this court by the respondent/defendant on or about 28 January 2016 and by the applicant/plaintiff on or about 4 February 2016, followed by supplemental submissions by the respondent/defendant on 5 February 2016.

2.  The applicant/plaintiff in these actions is Mr Chan Kai Man （陳解文）(“Chan”).  It is the case of Chan that he was at all material times in the employ of Baiqian International Holding Limited（百千國際集團有限公司）(“BQIH”), the respondent/defendant herein, as a Hong Kong–China cross-border lorry driver and that he suffered back injuries in an industrial accident when he was unloading goods in Hong Kong in the course of his employment on 2 August 2012 (“the Accident”).  It is also the case of Chan that his employment was terminated on 4 August 2012 and the key to the lorry assigned to him and the official cross-border driver document were taken back from him on 5 August 2012 by BQIH.  Chan alleges that he has suffered loss and damages as a result of his injuries.  

3.  BQIH denies any employment relationship as alleged by Chan or at all.  It alleges that Chan’s employer at all material times was a Mainland China business entity known by the name of 深圳市深聯運國際貨運代理有限公司（“深聯” or “SLY”）. It does not admit and puts Chan to strict proof that any accident happened in the course of Chan’s employment as alleged or at all.  BQIH also alleges that it was not the duty of Chan to load or unload the cargoes; that the Accident did not result from a risk which was necessarily incidental to the performance of Chan’s duties; that Chan’s injuries were attributable to the serious and wilful misconduct of Chan; and that there is no or no sufficient causal connection between the Accident and Chan’s employment.  BQIH further alleges Chan quitted his employment with SLY by returning his lorry key and the official cross-border driver document to SLY through one of his colleagues on 5 August 2012.

4.  At the trial of these actions, only Chan himself gave evidence to prove his own case.  No other witnesses were called to give evidence in support of Chan’s case although there was included in the trial bundles the witness statement of one Mr Tsang Kwok Ming（曾國明）(“Tsang KM”).  However, Tsang KM was not called to give evidence at the trial.  Chan explained when he was giving his oral evidence at the trial that Tsang KM was not called as a witness because he asked for HK$2,000 for giving evidence at this trial.  Since it was not sought on behalf of Chan to put in the witness statement of Tsang KM as evidence at the trial, it is not necessary for this court to consider its contents.

5.  On the other hand, BQIH called the following three witnesses to give evidence at the trial in support of the defendant’s case:-

(1) Mr Tsang Siu Chung（曾紹聰）(“Tsang SC”, DW1), who was said to have joined SLY in January 2011, transferred to BQIH and became its manager in May 2012, and left the employ of BQIH in or about April 2013;

(2) Mr Liao Er Hua（廖尔華）(“Liao EH”, DW2), who is the “legal representative”（法定代表人）of SLY and is also holding 5,000 of the 10,001 shares issued (being 49.995% of the shares issued) in BQIH (the other substantial shareholder is Mr Liao Mu Hua（廖木華）(“Liao MH”) who is also holding 5,000 of the 10,001 shares issued (being 49.995% of  the shares issued) and he is the brother of Liao EH); and

(3) Ms Liao Yin Feng（廖銀鳳）(“Liao YF”, DW3), who is said to be the Chief Cashier of the Finance Department（財務部總出納）of SLY and the sister of Liao EH and Liao MH.

THE ISSUES

6.  The main issues on liability in the EC Action and the PI Action largely overlap and can be summarized as follows:-

(1) Who was Chan’s employer?  Chan says his employer at all material times was BQIH.  BQIH denies and says that Chan’s employer was SLY.

(2) Whether and how the Accident happened; Whether BQIH is liable.

(a) BQIH also puts Chan to strict proof concerning the occurrence of the Accident.

(b) Whether it was part of the duties of Chan as a cross-border lorry driver to load and unload the cargoes onto and from his lorry.

(c) Whether and how the Accident happened.

(3) What were the injuries and damages suffered by Chan?

WHO WAS CHAN’S EMPLOYER?

7.  Section 2(1) of the Employees Compensation Ordinance, Cap  282 (the “ECO”) provides a definition of “employee” as follows:-

“...... any person who has ...... entered into or works under a contract of service or apprenticeship with an employer in any employment, whether by way of manual labour, clerical work, or otherwise, and whether the contract is expressed or implied, is oral or in writing ......”

8.  The issue of whether a person is an employee of another is a question of fact to be determined by the court which looks at the substance of the relationship rather than the label attached to it by the parties.

9.  Both Chan’s counsel and BQIH’s counsel in their respective opening submissions referred this court to the judgment of the Hong Kong Court of Final Appeal in Poon Chau Nam v. Yim Siu Cheung t/a Yat Cheung Air Conditioning and Electric Co (2007) 10 HKCFAR 156.  Though the issue placed before the Court of Final Appeal is whether the applicant in the employees’ compensation proceedings was an employee or an independent contractor of the respondent, the principles enunciated by the Court of Final Appeal in the Poon Chau Nam case are relevant and applicable to the instant case before this court.

10.  In paragraphs 9 and 18 of the judgment, the Court of Final Appeal says:-

“9. In the great majority of cases, deciding whether or not A is B’s employee presents little difficulty. Most people take up jobs which are regular and stable, doing the work assigned to them, supervised by the boss and receiving regular wages and other benefits in return. They are obviously employees. However, in certain instances, the answer to the question whether an employer-employee relationship exists is elusive, as recognized by Lord Griffiths in Lee Ting Sang v Chung Chi Keung & Another ([1990] 1 HKLR 764 at p.766G) ......

18. The modern approach to the question whether one person is another’s employee is therefore to examine all the features of their relationship against the background of the indicia developed in the abovementioned case-law with a view to deciding whether, as a matter of overall impression, the relationship is one of employment, bearing in mind the purpose for which the question is asked. It involves a nuanced and not a mechanical approach, as Mummery J emphasized in Hall v Lorimer ([1992] 1 WLR 939 at p.944) (in a passage approved by the English Court of Appeal ([1994] 1 WLR 209 at p.216 (CA)):

In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity.  This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation.  The object of the exercise is to paint a picture from the accumulation of details.  The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole.  It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details.  Not all details are of equal weight or importance in any given situation.  The details may also vary in importance from one situation to another.”

11.  Mr Jerome Liu, counsel for Chan, also referred this court to the case of Shen Li Ping (for herself and for and on behalf of other members of the family of Tsang Kwok Kwong, deceased) v Oriental Logistics Group Limited, unreported, DCEC 987/2010, 25 October 2012.  In the Shen Li Ping case, Madam Shen was the applicant in an application for compensation under the ECO in relation to the death of her late husband Mr Tsang Kwok Kwong arising out of a fatal accident happened in December 2008 when Tsang was driving a 10-ton cross-border container truck and bumped into the rear of another truck.  Oriental Logistics Group Limited, a company incorporated in Hong Kong, was the respondent in the proceedings. Oriental Logistics disputed liability and alleged that Tsang was employed by a PRC company known as Max Dart Technology Logistic Co Ltd located in Dongguan. Madam Shen and Oriental Logistics referred to and relied on different documents in support of their respective contentions.  Some documents pointed more to Oriental Logistic as Tsang’s employer whilst other documents pointed more to the PRC company Max Dart as the employer.  Madam Shen relied on a number of documents that were said to have the cumulative effect of proving that Oriental Logistics was the employer of Tsang.  Such documents included: (1) the vehicle registration document showing that Oriental Logistics was the registered owner of the truck driven by Tsang; (2) a table bearing the letterhead of  Oriental Logistics titled as “Drivers Contact Details”（司機聯系資料表）showing the assigned trucks and the contact details of different drivers including Tsang; (3) a table bearing the letterhead of Oriental Logistics showing details of calculation of the salary of Tsang for December 2008; (4) an insurance policy issued in August 2008 showing Oriental Logistics insured against the relevant truck in accordance with PRC regulations; and (5) a table bearing the company stamp of Oriental Logistics with GPS record showing the movement of Tsang’s truck for each stop of the journey on the day of the accident and the day before.  On the other hand, Oriental Logistics relied heavily on the “personnel registration card”（人事資料卡） of Max Dart dated 10 October 2008 to suggest that the employment relationship was between Tsang and Max Dart.  Having heard the witnesses and considered the relevant documents, the trial judge in the Shen Li Ping case took the view that the cumulative effect of the relevant documents suggested that Oriental Logistics was the employer of Tsang.

12.  In the present case, it appears that the following factors and materials are the more relevant ones in determining the identity of the Chan’s employer:-

(1) the newspaper advertisement;

(2) the job interview in Hong Kong;

(3) the circumstances under which Chan was offered the job;

(4) the terms and conditions of Chan’s employment contract;

(5) the ownership of the lorry driven by Chan;

(6) documents signed between Chan and his employer and documents received from BQIH and SLY;

(7) payment of wages to Chan by his employer;

(8) the mode of operation, the sources from which Chan received his instructions of work, and the supervision of Chan’s work;

(9) employer’s contribution to Chan’s Mandatory Provident Funds was made and paid by BQIH;

(10) the several companies involved were all related companies and were not truly  independent business entities as alleged by BQIH;

(11) the parties’ own view of their relationship.

(A) The newspaper advertisement, the interview, the circumstances under which Chan was offered the job, and the terms and conditions of the employment

13.  Chan was at all material times a Hong Kong resident who was born in Mainland China in 1956.  According to Chan, he came across a job advertisement for several positions of Hong Kong-China cross-border lorry driver on a Hong Kong local newspaper, namely the Oriental Daily, in or about mid-September 2011.  The documents included in the trial bundles of the EC Action at pages 325-333 show that the relevant advertisement was published on 15 September 2011 and the advertisement says as follows:-

“多名中港快件司機

1. 深圳機場清關有中型貨車牌

2. 能刻苦耐勞有責任心

3. 月薪16,000糧準不拖糧

4. 包強積金勞保

有意請電xxxxxxxx曾生”

14.  The newspaper advertisement stated that the employer was recruiting several China-Hong Kong drivers for cross-border express dispatch and custom clearance in Shenzhen Airport.  It offered a monthly salary of HK$16,000.00.  Other benefits included Mandatory Provident Funds (“MPF”) and Employees’ Compensation Insurance.  Interested applicants were asked to contact a Mr Tsang by phone.

15.  Chan therefore rang to the telephone number as advertised to apply for the job.  He was asked to attend an interview on a Saturday in mid-September 2011.

16.  The interview took place at a venue situated at Unit B, 9/F, Kwai Wan Industrial Building, No 2 Wing Kin Road, Kwai Chung, NT, Hong Kong (“Unit 9B”).  Unit B was at all material times the registered office of BQIH as shown by the Notice of Change of Address of Registered Office filed on behalf of BQIH on 11 February 2011.

17.  According to Chan, he was interviewed by Tsang KM who gave him his business card during the interview. From a copy of such business card included in the trial bundles, one can see the following information printed on it:-

(1) the name of BQIH in both Chinese and English with a logo comprising the 2 English alphabets of “b” and “q” joined together horizontally and a star resting right above the alphabet “q” (the “bp Logo”);

(2) the name of Tsang KM in both Chinese and English though there was not any description of his official title;

(3) two business addresses, one is a Hong Kong address and the other one is an address in Shenzhen, China.  Both addresses are printed in both Chinese and English.  The Hong Kong address is the same address of the Registered Office of BQIH whilst the Shenzhen address is “Bldg 22, JinBi Industrial Zone, Huang Tian, XiXiang Town BaoAn District, ShenZhen, China” (“the Shenzhen Address”) which refers to a block of building in which the register address of SLY is situated;

(4) several telephone numbers of which one is a Hong Kong mobile phone number and is the same mobile phone number that appeared in the newspaper advertisement; and

(5) an email address stated as tkm@slyex.com which, according to the evidence of Tsang SC given under cross-examination, the mail server “slyex” was the one hosting his own email address when he was working for SLY but his email address changed to one with a mail server name of “1001000” when he was subsequently transferred to BQIH in Hong Kong.

18.  It is said by Chan that Tsang KM introduced himself to Chan as the manager of BQIH.  Chan also said that the following things happened during the interview:-

(1) Tsang KM offered Chan the job and an oral employment contract was made;

(2) Chan’s employer would be BQIH and his salary would be HK$16,000 per month;

(3) Chan would be entitled to holidays on Sundays and the Statutory Holidays including the National Day Statutory Holiday coming up on 1 October 2011;

(4) the method of calculating Chan’s remuneration was also explained to Chan;

(5) Chan would be paid an allowance of HK$200 per day from 28 September 2011 onwards and he would be paid his salary of HK$16,000 per month from the day when the necessary insurance policy for the newly acquired lorry to be assigned to Chan had been set up;

(6) Chan also passed his identification documents to Tsang KM for making photocopies.

19.  The story of BQIH on this part was mainly covered by the evidence of Tsang SC.  He said that he was the manager of BQIH at the time of the alleged Accident on 2 August 2012.  It is also his evidence that he joined SLY in January 2011 and was transferred to BQIH in May 2012.  He further said that he left the employ of BQIH in around April 2013 and that he was no longer an employee of BQIH at the time of the trial of the proceedings herein.

20.  In his cross-examination, Tsang SC said that BQIH did not have any particular business at the time when he was transferred from SLY to BQIH in around May 2012 save for renting out lorries to SLY.  He further said that before his transfer to BQIH, there were then only 4 employees in BQIH, namely, Ting Ting（婷婷）, Ka Yee（嘉儀）, Chan Wai Wah（陳偉華）and Ah Sui（阿水）.

21.  Tsang SC said that Tsang KM was never an employee of BQIH.  He said that Tsang KM and Liao EH (ie a major shareholder of BQIH) were in similar line of business.  They had some kind of business arrangements previously in that high-valued goods were handled by Tsang KM and low-valued goods were handled by BQIH.  Tsang KM and BQIH shared the same industrial property as their business premises.  However, the said business arrangements ceased at around the time when Tsang SC was transferred from SLY to BQIH in April or May 2012.

22.  Tsang SC tried to explain the recruitment advertisement by alleging that:-

(1) in or about September 2011, due to its business expansion SLY was in urgent need of one more cross-border lorry-driver;

(2) Liao EH of SLY asked Tsang SC for help by recruiting a driver for him;

(3) Liao EH said that since jobs of cross-border driver were usually filled by recruiting Hong Kong residents, he needed to put up recruitment advertisements on Hong Kong newspapers and that for such purpose it would be more convenient to leave a Hong Kong telephone number for contact;

(4) Since SLY was situated in Shenzhen and would be unable to place newspaper advertisement in Hong Kong directly, Liao EH asked BQIH and Tsang SC for assistance;

(5) BQIH, therefore, appointed a Hong Kong resident, namely Tsang KM, to place newspaper advertisement on behalf of SLY in Hong Kong, to take telephone calls, and to inform Tsang SC to arrange for the relevant job interviews;

(6) Tsang KM was never an employee of BQIH and that BQIH had never paid any wages or remuneration to Tsang KM;

(7) Upon reading the newspaper advertisement, Chan rang up Tsang KM who referred Chan to Tsang SC for a job interview.  Since Tsang SC happened to be visiting a place in the vicinity of the Huanggang Port in Shenzhen for business, arrangement was made for Chan to see Tsang SC in a restaurant in that area for an interview;

(8) During the interview, Tsang SC explained to Chan the duties of his job with SLY and the terms and conditions of his employment.  Tsang SC also told Chan to attend the head office of SLY in Shenzhen to complete the personnel procedure on a prescribed date;

(9) In his supplemental witness statement, Tsang SC added that:-

(a) he was acting on behalf of SLY (and not as the manager of BQIH) when conducting the interview with Chan in the Huanggang Port in Shenzhen; and

(b) during the interview, he told Chan expressly that he would be employed by SLY;

(10) BQIH or Tsang SC had never entered into any oral or written employment contract with Chan;

(11) BQIH or Tsang SC had never authorized Tsang KM to enter into any oral or written employment contract with Chan.

(12) In fact, to the contrary, Chan signed a Chinese labour agreement in writing with SLY on 18 October 2011 and became an employee of SLY.

23.  Chan did not have much education. He was born in Mainland China in 1956.  He received education in Mainland China up to level 5 in primary school.  Counsel for BQIH referred this court to the evidence of Chan in the Magistracy Case No KTS 1743-57 of 2013 (“the MPF Case”) and submitted that Chan was an unreliable witness.  It appears from the transcript of the MPF case that a total of 15 summonses were laid against BQIH for offences under the Mandatory Provident Fund Schemes Ordinance (Cap 485) in connection with Chan’s Mandatory Provident Fund (“MPF”) account.  These 15 summonses could be grouped into four categories: (1) the first summons alleged that BQIH failed to arrange for Chan to become a MPF scheme member within the time stipulated by law after Chan had become an employee of BQIH; (2) the second to fifth summonses alleged that since BQIH had failed to arrange for Chan to become a MPF scheme member within time it therefore failed to make MPF contributions for Chan as required by the law; (3) the sixth to thirteenth summonses alleged that BQIH had failed to make any or any sufficient contributions to the MPF scheme after Chan had been registered as a MPF scheme member; and (4) the fourteenth and fifteenth summonses alleged that the respective commencement date and termination date of Chan’s employment with BQIH were incorrect and false.  A central issue common to all these 15 summonses was whether BQIH was the employer of Chan.  Chan was called to give evidence in the MPF Case as one of the prosecution witnesses.  Three other witnesses were called to give evidence as prosecution witnesses of which two were employees of an agency hired to render administrative support services to the relevant MPF scheme to which Chan had been registered as a member by BQIH, and the remaining prosecution witness was an employee of the Mandatory Provident Fund Schemes Authority (“the MPFA”).  BQIH called no witness to give evidence in the MPF Case, an approach that it was entitled to adopt and no adverse inference could be drawn against it by the trial magistrate.  Mr Lam, counsel for BQIH in the present proceedings, was also retained to act for BQIH in the MPF Case.  When the prosecution case was closed, a submission of no case to answer was made by Mr Lam.  The trial magistrate ruled that there was a case to answer, though he acquitted BQIH of all the 15 summonses at the end of the trial.  The main reason for the acquittal was that the standard of proof required for a conviction was “beyond all reasonable doubt” and after considering all the evidence available to the court the magistrate was not so satisfied. According to the transcript of the MPF Case, there were a number of reasons why the trial magistrate was not satisfied beyond all reasonable doubt that BQIH was guilty as summonsed.  One of the reasons was that Chan appeared to have confusion as to the identity of his employer.  Under his examination-in-chief in the trial of the MPF Case, Chan at first confirmed that his employer was “百千國際物流有限公司” (“BQ Logistics”) but subsequently claimed that the name of his employer should be that of BQIH.  Under cross-examination, when being asked whether Tsang KM was acting for BQIH, SLY, or BQ Logistics when he conducted the job interview, Chan said that he did not know.  For these reasons alone, the trial magistrate was of the view that he could not be satisfied beyond all reasonable doubt that BQIH was the employer of Chan in the trial of the MPF Case.  It is noted that besides stating that he was not satisfied beyond all reasonable doubt and noting the confusion in the identity of the employer in the evidence of Chan, the trial magistrate did not make any finding that Chan was an unreliable witness.  To the contrary, the trial magistrate did make some adverse comments against BQIH in the oral reasons delivered by him by saying that the position or conduct of BQIH was “非常可疑” (very suspicious).

24.  In connection with the acquittal of BQIH in the MPF Case, Mr Jerome Liu of counsel for Chan referred me to a passage in the judgment of Lord Diplock in Hunter Appellant v Chief Constable of the West Midlands Police and Others [1982] AC 529 at 543 A-C in which His Lordship summarized the approach to be adopted in a subsequent civil proceedings when dealing with the conviction or acquittal in an earlier criminal case in the following way:-

“...... This raises a possible complication that the onus of proof of facts that lies upon the prosecution in criminal proceedings is higher than that required of parties to civil proceedings who seek in those proceedings to prove facts on which they rely. Thus a decision in a criminal case upon a particular question in favour of a defendant, whether by way of acquittal or a ruling on a voir dire, is not inconsistent with the fact that the decision would have been against him if all that were required were the civil standard of proof on the balance of probabilities. This is why acquittals were not made admissible in evidence in civil actions by the Civil Evidence Act 1968. In contrast to this a decision on a particular question against a defendant in a criminal case, such as Bridge J.’s ruling on the voir dire in the murder trial, is reached upon the higher criminal standard of proof beyond all reasonable doubt and is wholly inconsistent with any possibility that the decision would not have been against him if the same question had fallen to be decided in civil proceedings instead of criminal. That is why convictions were made admissible in evidence in civil proceedings by the Act of 1968.”

I agree with the approach adopted by Lord Diplock.

25.  Chan had received little education and is not a sophisticated person.  Though he is not the best witness by any standard and his recollection of events may not be perfect, he has been very consistent with his account concerning the detailed particulars of the interview with Tsang KM, the circumstances under which he was given the name card of Tsang KM, his meeting with Tsang SC in a restaurant in the vicinity of the Huanggang Port and the matters discussed at such meeting, etc.  His story was unshaken under the vigorous cross-examination by Mr Lam, counsel for BQIH.

26.  On the other hand, I notice that Tsang SC is obviously a more sophisticated person than Chan, but I also observe that he was less than frank when he was giving his evidence at the trial.  He avoided questions by counsel from time to time by giving ambiguous answers or irrelevant answers.  He gave me the impression that he had something to hide and that he was not a reliable witness.  There are clearly inconsistencies in his story about the relationship between BQIH and Tsang KM.  Take the issue of the business name card of Tsang KM as an example.  In his supplemental witness statement (para 22), Tsang SC said that during the period of cooperation between BQIH and Tsang KM, the former allowed the latter to use its name and its business address and to print the same on his business name cards in order to facilitate the execution of those business duties covered by their business cooperation such as liaison and communication with the Hong Kong customers of BQIH.  In short, according to the evidence of Tsang SC as contained in his supplemental witness statement, Tsang KM printed his own BQIH business name cards with both the knowledge and the authority of BQIH.  However, when Tsang SC was giving oral evidence in court he tried to retract his committed position by saying that the business name card was probably printed by Tsang KM himself in Hong Kong and he was not sure if Tsang KM had been authorized to do so.  The story that Tsang SC had been trying very hard to tell this court is that Tsang KM was never an employee of BQIH.  Nor was he authorized to conduct the interview with Chan, make any offer for employment to Chan or enter into any oral or written employment agreement with Chan.

27.  I find it very hard to follow or accept the story told by Tsang SC that since SLY was a business entity in Mainland China it was unable to place advertisement on newspaper in Hong Kong. Hence SLY had to get the assistance of BQIH which in turn asked Tsang KM to help by placing the job recruitment advertisement and using his own mobile phone number for contact by interested job applicants.  I find that the story told by Tsang SC defies common sense and is inherently implausible.  I do not accept his story that it is not possible for a Mainland business entity to place advertisement on newspaper in Hong Kong.  In fact, Tsang SC admitted under cross-examination that SLY itself had never tried to place job recruitment advertisement on Hong Kong newspapers direct.  Further, even if SLY really needed someone in Hong Kong to help placing newspaper advertisement, Tsang SC would be an obvious choice since, according to him, he was then still an employee of SLY and he is a Hong Kong resident.  Alternatively, there were then several full time employees working for BQIH in Hong Kong.  These employees, instead of Tsang KM if he was not an employee of BQIH as alleged by Tsang SC, should also be the most obvious persons whom SLY could and should have approached for assistance.  This is particularly so bearing in mind the fact that, although SLY and BQIH were two separate legal entities in Shenzhen and Hong Kong respectively, they were closely associated with each other in terms of their common shareholders, business structure and business operation.  For example, there was significant overlap in the shareholders and senior management of these companies in that Liao EH, who was then holding 5,000 of the 10,001 shares issued (being 49.995% of the shares issued) in BQIH and 34% shareholding in SLY, was also the “legal representative”（法定代表人）of SLY, and that his brother Liao MH, who was similarly holding 5,000 of the 10,001 shares issued (being 49.995% of the shares issued) in BQIH and 33% shareholding in SLY, was the sole director of BQIH.  It is therefore unbelievable that SLY (assuming that it was the prospective employer of Chan) would have gone all the way to get an outsider like Tsang KM to help if he was not an employee of SLY or BQIH.

28.  In connection with the issue of whether Tsang KM was a manager of BQIH, Tsang SC had confirmed to the Presiding Officer of the Labour Tribunal in Claims No LBTC 4545 of 2012, a claim brought by Chan against BQIH under the Employment Ordinance (Cap 57), at a hearing held on 8 January 2013 that Tsang KM was previously a manager of BQIH but his employment had ceased already.  At p 3 G-J of the transcript (of which a copy can be found at p 719 G-J of the trial bundle of the EC Action), it is recorded as follows:-

“官： 咁邊個介紹你做呢份工？

申索人： 我係見工見嗰個曾國明，經理嚟嘅，喺香港百千公司見工。

官： 曾國明？

申索人： 係。

官： 你又姓曾，同呢個人有冇關係？

被告公司代表： 冇，冇關係，佢講呢個曾國明係之前百千公司嘅經理，而家已經冇做。

官： 即係個曾國明請你嘅？

申索人： 係。”

29.  Tsang SC also suggested that the monthly salary of HK$16,000.00 as described in the newspaper advertisement was put down by Tsang KM without the knowledge or consent of SLY or BQIH.  I find it difficult to follow or accept such suggestion since there is simply not any conceivable explanation as to why Tsang KM would have done so if such figure had not been prescribed by SLY or BQIH beforehand.

30.  On the basis of the matters discussed above, I prefer Chan’s account to that of Tsang SC concerning the newspaper advertisement, the interview, the circumstances under which Chan was offered his job, and the terms and conditions of his employment.  These factors alone suggest that BQIH rather than SLY was the employer of Chan at all material times.

(B) Ownership of the lorry

31.  It is common ground that the Lorry was owned by BQIH.  This fact tends to add weight to the view that BQIH rather than SLY was the employer of Chan.

32.  The evidence of Chan and documents produced on his behalf shows that:-

(1) Around the end of September 2011, Tsang KM rang Chan and asked him to report duty on 28 September 2011.  Tsang KM also instructed Chan to pick up the key to the lorry with registration number of RA3045 (“the Lorry”) from a Wan Tat Automobile Company （宏達車行）in San Tin Road and then drive the lorry to Mainland China for processing its registration.

(2) Documents in the trial bundle show that the Lorry was first registered in Hong Kong on 16 September 2011 and its registered owner was BQIH.

(3) According to Chan, he drove the Lorry to Mainland China and spent about 3 days to handle the registration of the lorry with the Mainland China authority by himself.  During this period, Chan parked the lorry at Shenzhen Airport.  All the relevant charges such as the registration fees, parking fees and toll charges were all paid and reimbursed by BQIH.

(4) Photographs of the Lorry taken by Chan in around mid-2014 for the purpose of these proceedings show that on the two sides of the body of the Lorry there were printed the abovementioned “bq Logo”, the words “BQ LOGISTICS” (not the name of BQIH), the website address of www.1001000.cc and a Mainland China telephone number of 86-755-22222232.  It is noted that this website address and the telephone number are the same as those of BQIH appearing on the business card of Tsang KM.  Regarding the “bq Logo”, Tsang SC was asked in cross-examination as to why the “bq Logo” but not the name or logo of SLY was printed on the body of the Lorry.  He was unable to give any explanation and he only said that one should ask the boss.  It is also Chan’s evidence that at the time when he was the driver of the Lorry, there were in fact also the Chinese name of BQIH “百千國際” printed on the body of the Lorry and that such Chinese characters were only covered with a fresh coat of paint after he had commenced these legal proceedings against BQIH.  Chan’s supported his story with a photograph downloaded from the website of Baiqian (www.100100.cc) showing the body paintwork of another lorry similar to the Lorry driven by him.

(5) Chan further said that he had also met with Tsang SC (ie DW1) at a restaurant in Lok Ma Chau pursuant to the instructions given by Tsang KM.  During the meeting with Tsang SC, Chan asked him when he could start driving the Lorry.  Tsang SC told Chan that Tsang SC himself would be responsible for handling the insurance policy of the Lorry and that Chan could expect to start driving the Lorry in around mid-October 2011 when the insurance policy for the Lorry was ready.

33.  The evidence of BQIH on those issues mentioned above was covered mainly by the evidence of Tsang SC.  The gist of his evidence is that:-

(1) BQIH and SLY were two companies that were operated independently.  BQIH was a logistic company.  BQIH only provided Hong Kong-China logistic services to SLY.  BQIH and SLY had signed an agreement dated 1 March 2011 entitled “Cargo Transportation Contract”（“貨物運輸合同”）under which SLY agreed to rent an unspecified number of cross-border lorries from BQIH at the rental of HK$20,000.00 per lorry per month for a period of 3 years from 1 March 2011 to 1 March 2014 which can be terminated at any time by giving the counterparty 30-day notice in writing. According to the terms of the Cargo Transportation Contract, the lorries would be owned and managed by BQIH whilst SLY would be responsible for those expenses incurred in the daily operation of the lorries such as fuel, maintenance, highway toll,  the management and wages of the drivers, and the expenses for loading and unloading the lorries.

(2) Chan’s driver information and the Hong Kong-China motor vehicle licence of the Lorry were registered together with the relevant authorities.

(3) The name of a transportation company “威盛運輸企業有限公司” (Weisheng Transportation & Enterprises Co Ltd) was painted on the body of the Lorry on the request of SLY since it is the name of the “牌頭公司” (which is understood to be a vehicle licensing company).  It is noted from the photographs produced by Chan that the “bq Logo” and the name “BQ LOGISTICS” were also painted on the body of the Lorry. However, Tsang SC did not refer to or explain why the “bq Logo” or the words “BQ LOGISTICS” were painted on the body of the Lorry.

(C) Documents Signed Between Chan and His Employer and Documents Received From BQIH and SLY

34.  BQIH relies heavily on two Chinese documents in support of its contention that Chan was employed by SLY instead of BQIH.  These two Chinese documents are:-

(1) a two-page document in Chinese bearing the title of “工作職責約定書” (Agreement on Work Duties) (“Work Duties Agreement”); and

(2) a one-page document in Chinese bearing the title of “員工個人資料登記表” (Registration Form on Personal Particulars of Employee) (“Employee’s Personal Particulars Form”)

35.  In the Work Duties Agreement, SLY was named as Party A and Chan was named as Party B.  Party A was described as the “Company” and Party B was described as the “Employee”.  The document was purported to have been signed by both parties on 18 October 2011.  The following interesting features are noted on the face of the Work Duties Agreement:-

(1) Despite the fact that the Work Duties Agreement is a pro forma document, the name of SLY is filled out in handwriting instead of in print like the other terms contained in the document;

(2) It is noticed that about 70% of the contents of the document are actually provisions for regulating cross-border lorry drivers in the performance of their duties.  Though the document contains some terms that are commonly found in employment contracts (such as the monthly remuneration of Party B is HKD16,000.00 and that Party B is entitled to one day of rest per week, etc), it is described as an “Agreement on Work Duties” instead of an employment agreement.  It is also noticed that some essential terms of an employment contract are lacking in the document, for example, there are not any terms providing for any notice of termination of the relationship by Party A or Party B or any payment in lieu of such notice. Instead, there are only a few words towards the end of the document stating that “有效期至乙方離職止” (“valid until Party B’s leaving”).  Looking at the document as a whole, it gives me a rather strong impression that the person who drafted the agreement has been intentionally ambiguous about the relationship between Party A and Party B and trying hard to leave some scope for arguing that their relationship may be something other than an employment.

36.  Despite the features I mentioned in the preceding paragraph, the Work Duties Agreement is a document which seems to suggest there was some kind of relationship, including the possibility of some kind of employment relationship, between Chan and SLY.

37.  Regarding the Work Duties Agreement, it is the evidence of Chan as contained in paragraph 13 of his supplemental witness statement that when he signed on the document he did not see any name or stamp of SLY or any signature of its representative on the document.  It is also his evidence that he passed the document to the responsible staff member immediately after he had signed on it and he did not see anyone writing down the name of SLY or affixing SLY’s stamp or signing on the document at that time.  Under cross-examination, Chan explained that when he was asked to sign the Work Duties Agreement by a Miss Poon, he was told that it was some kind of agreement with the Custom Department undertaking not to involve oneself in smuggling activities.

38.  On this issue, it is the oral evidence of Tsang SC that:-

(1) the name of Party A (ie SLY) is the handwriting of one莫宇彬 (transliterated as Mok Yu Bun) who was then SLY’s Human Resources Manager;

(2) it was signed in the presence of “Ah Bun” and Tsang SC himself;

(3) Tsang SC at first said that the name of SLY had been written down in the document when it was signed though he was not sure if the stamp of SLY had been affixed at that time.  However, when Tsang SC was reminded by Mr Liu, counsel acting for Chan, his testimony should be based on his actual recollection but not assumptions, he changed his evidence and said that he could not recall whether the name of SLY had been written down in the document already when it was signed.

39.  Liao ER (DW2), who was and is the “legal representative” of SLY and a major and substantial shareholder of BQIH, was also asked about the Work Duties Agreement during his cross-examination. He was given the opportunity to comment on Chan’s story.  However, Liao ER only said that such document was made by the Human Resources Department and the requirement was to have names inserted.  He did not refute or reject Chan’s story as implausible or unbelievable.  Liao ER was then further shown Exhibit D1, which is a one-page employment contract of SLY in Chinese bearing the Chinese title of “聘用確認書” (Confirmation of Employment Agreement).  The space marked “公司名稱” (“Name of Company”) on the top right hand corner of the document was left blank without inserting the name of SLY or any other company.  The document was signed by the employee, bore the red stamp of SLY but was not signed by SLY; nor was the document dated.  Liao ER gave the unconvincing answer that it did not matter so long as the document bore the red stamp of SLY.

40.  In so far as the Employee’s Personal Particulars Form is concerned, Chan explained in his supplemental witness statement that the document was actually a two-page document with front side and back side in that on the front side there was the Employee’s Personal Particulars Form whilst the back side bore the form in Chinese entitled “員工誠信申明書” (“Employee’s Declaration of Interest”).  Chan’s story is the same as that for the Work Duties Agreement.  It is also his evidence under cross-examination that when he was asked to sign on it he was told that he should provide the telephone number of a contact person in case he should meet with any emergency or accident.  As a result, he wrote down the mobile phone number of his son on the Employee’s Personal Particulars Form.

41.  Having considered all the evidence available, it is clear that there is no evidence from BQIH’s witnesses to contradict that of Chan.  I find Chan’s story not implausible in that when he was asked to sign on these documents, neither the name of SLY nor the stamp of SLY appeared on the form, and that these information were only filled out by someone after these forms had been signed and submitted by Chan. Alternatively, even if these information had already been written down on the forms when Chan signed on them, he probably would not have noticed them or realized their potential importance since he had been given to understand by Tsang KM that BQIH was his employer and that these company names might not matter much as he, by then, had already seen so many different company names, including “bp”, BQIH, “BQ LOGISTICS” and “威盛運輸企業有限公司”, printed on the business name card of Tsang KM and the body of the Lorry.  This is particularly so bearing in mind Chan’s relatively low level of education and my earlier finding that he is not a sophisticated person.

(D) Payment of wages to Chan by his employer

42.  It is common ground that Chan was paid his salaries and his mobile phone allowance in cash on the 15^th day of every month.  Other relevant expenses were also paid on reimbursement basis two to three times in every two months.

43.  According to Chan, payments were made in Hong Kong dollars to him by the Cashier known as “紅姐” (“Madam Hung”) at the Shenzhen Address printed on the business name card of Tsang KM.

44.  It is the evidence of Liao YF DW3 that salaries of the Hong Kong-China cross-border drivers were usually paid on the 15^th day of each month at the registered office of SLY, namely Room 310 at the Shenzhen Address.  The salary records of all the drivers were consolidated and printed on a standard form of SLY on a monthly basis.  Liao YF said that each one of these monthly forms would bear the Chinese title of “深圳市深聯運國際貨運代理有限公司” followed by the words of “201x年xx月工資表” at the top and the names and signatures of the officers who prepared, checked and approved the form at the bottom.  She further explained that due to privacy reason, she or other colleagues of the finance department would cover those entries concerning other drivers with paper strips but leaving the heading of the form at the top, and the names of the officers at the bottom, and the relevant entry in respect of the driver who was collecting his salaries visible to him when he signed on the form upon receiving his salaries.

45.  The story of BQIH was disputed by Chan.  His story is that the Shenzhen Address is a 3-storey warehouse structure.  He had been instructed to drive the Lorry to there for loading and unloading goods.  He noticed that there was a name plate bearing the company name of Baiqian put up at the main entrance of the building.  Chan further said that starting from January 2012 onwards the salary record form was folded up in such a way that only the particular entry pertinent to his salary was revealed to him for his signature.  Thus, he did not know whether the name of SLY was printed on the salary record form or not.  As for the period before January 2012, Chan said that the record was not folded up or covered in any way and he could see the whole documents and all the other entries concerning the other drivers.  He was certain that the name of SLY was not printed on the form.

46.  Having heard Liao YF and seen her giving evidence in court, I do not find her to be a frank, honest or reliable witness.  She was very evasive when answering questions put to her by Chan’s counsel.  She was particularly evasive and trying hard to avoid the questions when she was asked by Chan’s counsel on issues such as whether SLY actually paid BQIH to reimburse the latter of the MPF contributions allegedly made by BQIH on behalf of SLY in respect of Chan’s MPF account, and whether SLY had filed any document with the Shenzhen government concerning SLY’s alleged employment of Chan.  She said that these matters were not within the ambit of her work and duties.  On a number of other issues, she tried to avoid counsel’s questions by saying that she did not understand the questions, giving answers not relevant to the questions, claiming she did not remember or claiming that she had no knowledge of the matter or that the matter was handled by other colleagues, etc.

47.  I do not accept the account of Liao YF as to how the salary record form was presented to Chan and the other drivers for their signature.  The method as described is so clumsy and awkward that I can hardly imagine any person in his right mind would have adopted in practice.  Nor do I accept the story told by Liao YF that she had been instructed by her supervisors that the drivers had to be shown the top part of the form printed with the name of SLY and the month to which the form referred, and the bottom part showing the names and signatures of the officers who prepared, checked and approved the form.

48.  The fact that I rejected the evidence of Liao YF concerning the salary record form does not necessarily mean that I must accept the account of Chan on the issue.  Whilst I accept Chan’s evidence that since January 2012 the salary record form was folded up in such a way that only the particular entry relating to his own salary was revealed to him for his signature, I doubt, and therefore do not accept, that he would be able to recall with the degree of certainty he asserted that the name of SLY did not appear on the form at such time when the identity of his employer would not appear to have any significance to him.  Even if the name of SLY was printed on the salary record forms and revealed to Chan when he signed to acknowledge receipt of his salaries, he probably would not have noticed it or came to the view that his employer was SLY instead of BQIH, particularly bearing in mind the fact that Chan is not a sophisticated person.  In any event, whether the name of SLY was printed on the salary record form and whether Chan could and should have notice of it are only one of the many factors that this court would take into account when deciding whether there was any employer-employee relationship between Chan and BQIH at the material times.

(E) Mode of operation, sources of instructions, and supervision of work

49.  Regarding the mode of operation, the sources of his instructions of work and the supervision of his work, the evidence of Chan can be summarized as follows:-

(1) During his employment with BQIH, his working hours were not regular;

(2) Usually, instructions of work were given to him by an employee of BQIH in Hong Kong known by the name of “Ah Sui”（“阿水”）.  Ah Sui would inform Chan by phone in the evening of the time and place for loading the Lorry in Hong Kong on the following day.

(3) After Chan had conveyed the goods from Hong Kong to Shenzhen and unloaded the goods in the cargo area of the Shenzhen Airport, he would be informed by phone by a colleague in Shenzhen known by the name of “Ah Bun”（“阿彬”）of the places for loading the Lorry in Shenzhen.  Chan was required to convey the loaded goods to Hong Kong and to unload them at prescribed destinations in Hong Kong.  After he had finished his work, he would park the Lorry in Western District of Hong Kong near his own residence.

(4) Besides Ah Sui and Ah Bun, other colleagues would also give Chan work instructions from time to time.  Such colleagues included Tsang KM, Tsang SC and Ting Ting.

(5) During Chan’s employment with BQIH, the latter would issue a notice in writing to all the cross-border drivers about once in every three months.  Such notice set out in writing the contact particulars of BQIH’s warehouse in Kwai Chung and its warehouse in Shenzhen for ease of communications.  It also set out the contact phone numbers of Ah Sui and Ah Bun.  Chan had got such notice in writing from Tsang KM, Ting Ting and Ah Bun before.  He annexed one example of such notice dated 18 November 2011 to his supplemental witness statement.  The notice was marked “港車司機請注意” (“Attention of Drivers of Hong Kong Lorries”).  It was issued in the name of “百千物流操作管理中心” (“Baiqian Logistics Operations Management Centre”).  It is noted that there is a reference in the notice to the Hong Kong address of a “百千國際物流有限公司” (“BQ Logistics”) and the contact person is stated to be “Ah Sui”.

50.  Tsang SC attempted to answer and deal with Chan’s case in paragraphs 27 to 30 of his supplemental witness statement as follows:-

(1) Ah Sui was an employee of BQIH (mistakenly stated as Chan).  He only relayed the instructions given by SLY to Chan.  BQIH did not have any authority to give instructions to Chan.

(2) The relevant written notice was not issued by BQIH as alleged by Chan.  Instead, the name of “百千物流” (“BQ Logistics”) and not BQIH was printed at the bottom part of the notice.  Tsang SC explained that BQ Logistics and BQIH were two different and independent companies.  To his knowledge, BQ Logistics was a PRC company and its business comprised mainly of loading lorries and consolidation of goods.

(3) Tsang SC further explained since Baiqian Logistics did not have an address in Hong Kong so it borrowed the address of BQIH for contact and communication purposes.

51.  It is noticed that Tsang SC did not deny Chan’s account that the aforesaid notice dated 18 November 2011 was given to him by employees of BQIH.

52.  Liao EH said in paragraphs 17 to 21 of his supplemental statement that:-

(1) The full name of Ah Bun was “黃魯彬”;

(2) Ah Bun was an employee of SLY at the material time but he had left the employ of SLY already on 30 April 2013. During his employment with SLY, he was the immediate supervisor of Chan;

(3) Work instructions were given orally by Ah Bun to Chan in the office of SLY in Shenzhen or by phone.

53.  In the oral evidence of Tsang SC, he tried to paint a picture that all the instructions for the loading and unloading arrangements for the 7 lorries owned by BQIH and leased to SLY were given by staff of SLY in SLY’s Shenzhen office and that staff members of BQIH in Hong Kong were also informed of such instructions so that they could relay the same to the drivers.  In his cross-examination by Chan’s counsel, Tsang SC said that staff members of BQIH did not have much involvement in respect of the co-ordination work of the drivers and that it was only in some unexpected situations, which were infrequent, that assistance from the staff members of BQIH would be required.

54.  If what Tsang SC said is true, one can hardly imagine why BQIH would need to have 5 employees in its Hong Kong office at Unit 9B when it is also the evidence of Tsang SC that BQIH did not have any business other than renting its lorries to SLY.

55.  Having considered all the relevant evidence, I reject the story of Tsang SC and I find that BQIH was actively involved in the management and co-ordination of the work of the cross-border drivers including Chan.  It appears rather clearly from the evidence that operations in Hong Kong were controlled by employees of BQIH from Unit 9B whilst operations in Shenzhen were controlled by people at the Shenzhen Address, whether it was part of BQIH, SLY, or BQ Logistics.

(F) The Mandatory Provident Funds Issue

56.  In Hong Kong, there is in place the Mandatory Provident Fund scheme (the “MPF”) which is a compulsory saving scheme for the retirement of residents in Hong Kong.  Under the MPF scheme, an employee and his employer are required to contribute 5% of the employee’s relevant income as mandatory contributions for and in respect of the employee to a MPF scheme provided by an approved private organization selected by the employer subject to a maximum relevant income level for contribution purposes. In this connection, the employer is required to set up a MPF account for the employee with the selected MPF provider within 60 days of the employee’s employment.

57.  In the present case, it is common ground that BQIH had set up a MPF account with an approved MPF provider for Chan during the period when he was working as a cross-border lorry driver albeit such account was set up late and not until sometime in January 2012 and only for a monthly contribution of HK$325.00 from each of BQIH and Chan, which sum was apparently calculated with reference to the “Minimum Relevant Income” of HK$6,500.00 stipulated by law during the period between 1 November 2011 and 31 May 2012 and that sum “Minimum Relevant Income” was far below the amount HK$16,000.00 basic salary actually earned by Chan back then.  The apparent breach of the relevant MPF legislations by BQIH resulted in a total of 15 summonses being laid against it in the MPF Case discussed above.

58.  Chan first made reference to the MPF issue in paragraphs 26 to 28 of his witness statement filed in the EC Action on 22 August 2013 and filed in the PI Action on 22 October 2013.  Chan enclosed a document which is a standard form document of AXA and bearing the title “Application for Membership – Employee” (the “MPF Application Form”). The MPF Application Form is a document for setting up a MPF account with the AXA MPF scheme.  Chan was named as the applicant in Part B of the form.  Part A was stated “To be completed by Employer” and the name of BQIH was named under this part as Chan’s employer.  The backside of the document contains a declaration and it was signed by both Chan and BQIH on 3 January 2012.  Tsang SC confirmed that the signature of the employer belonged to Liao MH, who was the major and very substantial shareholder and the sole director of BQIH.

59.  Chan filed a supplemental witness statement in both the EC Action on 17 December 2014 and in the PI Action on 6 January 2015.  In paragraph 9 of his supplemental witness statement, he made a very short reference to the MPF issue by saying that it was his understanding the MPF was only available in Hong Kong but not in PRC and that since the job recruitment advertisement mentioned MPF as part of the remuneration package he knew that the relevant company was a Hong Kong company.

60.  A number of witness statements and supplemental witness statements of the three defence witnesses had been filed on behalf of BQIL.  According to these witness statements and supplemental witness statements, BQIH’s case on the MPF issue runs like this:-

(1) BQIH made its MPF contributions in respect of Chan’s MPF account for and on behalf of SLY;

(2) Chan’s contribution to his MPF account was deducted from the monthly salaries paid to him by SLY;

(3) Tsang SC alleged that he had mentioned to Chan that since he was a Hong Kong resident it would be difficult for him to join the National Social Security Fund (“NSSF”) of China or to get his retirement benefits upon his retirement.  Chan, therefore, asked SLY to help him in arranging retirement protection.  SLY then asked BQIH to lend its name as the employer of Chan and to file an application on behalf of SLY in Hong Kong so as to enable Chan to join a MPF scheme.  BQIH agreed and helped SLY to set up a MPF account for Chan with the AXA MPF scheme.  SLY was responsible for the monthly contributions.

(4) The story of Liao EH is similar to that of Tsang SC.  He added that there were some cross-border lorry drivers in the employ of SLY who had signed a document entitled “放棄參保申請書” (“Application for Waiver of Participating in NSSF”) confirming that it was their own intention not to join the NSSF despite SLY’s advice and asked SLY to make alternative arrangements for them in respective of the arrangement for their retirement benefits.  On this, Tsang SC said under cross-examination that he had no idea whether Chan or other cross-border drivers had also signed a similar document.  Liao EH himself was also unable to confirm whether Chan had ever signed such a document.  Liao EH also explained that since the employee of SLY responsible for financial matters had not yet sorted out as to how the MPF contributions made by BQIH on behalf of SLY should be reflected in the books of SLY before he left the employ of SLY and that he had also failed to handover the matter to his successor, SLY did not have any record reflecting the relevant MPF arrangements.

61.  Under cross-examination, Liao EH further added that,

(1) according to the requirements stipulated by the National Council for Social Security Fund, men over 45 years of age and women over 40 years of age were not eligible for participation in the NSSF.  Since Chan was 55 years of age already when he was employed by SLY, it was certain that he would not be able to participate in NSSF;

(2) to participate in the NSSF scheme, the employee must be able to provide and submit his “勞務證” (“Labour Licence”).  Since Chan did not have a Labour Licence, he was not eligible to participate in the NSSF scheme;

(3) he had consulted the in-house lawyer of his company and he was advised that it would not be a problem to employ a person who did not have a Labour Licence even though it would mean that he was not eligible to participate in the NSSF scheme.

62.  These reasons as said by Liao EH during his cross-examination were something new in the case of BQIH.  They were never said by any of the defence witnesses in any of the witness statements previously filed.  In fact, it was inconsistent with what he said earlier in his witness statements.  It also contradicted what Tsang SC said in his witness statements and at the trial about the MPF issue.

63.  It appeared that solicitors acting for Chan had written to the MPF Authority (“MPFA”) by letter of 14 July 2014 for making an enquiry.  The MPFA replied by a letter dated 24 July 2014 (the “MPFA Letter”).  In the 3^rd paragraph, the MPFA says:-

“The guiding principal [sic] for MPF coverage is that the Ordinance is intended to cover those employees who are employed in or from Hong Kong. According to the information you provided, if the employee concerned is a Hong Kong resident and is employed by an overseas company to work in Hong Kong, the employer is required to enroll this employee into an MPF scheme and make contributions for him according to the provisions of the Ordinance. Whether the employer is incorporated in Hong Kong is irrelevant.”

64.  Under cross-examination, Tsang SC tried to dissociate himself from the MPF matters by conceding that he had not liaised with local MPF providers to explore the possibility of enrolling the Hong Kong-China cross-border drivers into a MPF scheme; he was not sure whether people of the Personnel Department of SLY had ever checked with any MPF providers regarding the matter.  When he was cross-examined on what he said in his witness statement that SLY borrowed the name of BQIH as Chan’s employer for enrolling Chan into a MPF scheme, Tsang SC retracted and claimed that he had no personal knowledge of the MPF matters and arrangements.  He also contradicted himself on the contents of the recruitment advertisement in particular as to whether Tsang KM should or was authorized to put down his mobile phone number in the advertisement.

65.  The MPF Application Form is an important document relating to the MPF issue.  It is signed by Liao MH.  On the face of the MPF Application Form, BQIH was the employer of Chan during the relevant period.  There is at least, if not more than, a prima facie case suggesting that BQIH was Chan’s employer.  However, Liao MH was not called to give evidence.  There is no suggestion that Liao MH cannot be called to give evidence at this trial.  Nor is there any explanation given by BQIH as why Liao MH has not been called to give evidence.  When Liao EH was asked under cross-examination whether there was any reason for Liao MH not giving evidence at this trial, he answered that he did not know but he confirmed that Liao MH knew about this trial.  In these circumstances, this court is entitled to draw adverse inference against BQIH at least on the MPF issue in the way as enunciated by the Hon Johnson Lam J. (as His Lordship then was) in Ip Man Shan, Henry v Ching Hing Construction Co Ltd, unreported, HCA 3675/1985, 15 January 2003, if necessary.

66.  Further, it is my observation that the defence witnesses, in particular Tsang SC and Liao EH, were very evasive when they were being cross-examined on the MPF issue.  Both of them were changing their story as they moved along.  As such, the evidence of the defence witnesses is unreliable and cannot be trusted.  I do not accept that BQIH arranged MPF for Chan for and on behalf of SLY as alleged.  I also do not accept BQIH’s story and the evidence of Tsang SC or Liao EH that arrangements were made between SLY and BQIH to enroll Chan into a MPF scheme because he was not eligible to participate in the NSSF as alleged or at all.  I find that the defence witnesses were not telling the truth on the MPF issue.  All the three defence witnesses were unreliable witnesses.  I particularly reject the evidence of Liao EH which was full of blatant lies.  I accept the MPF Application Form is prima facie evidence in support of Chan’s contention that BQIH was his employer.

(G) The companies are all related/associated companies and not truly independent business entitles

67.  Besides BQIH and SLY, the names of “百千國際物流有限公司” (“Baiqian International Logistics Limited Company” or “BQ Logistics”) and “百千物流” (“Baiqian Logistics” or “BQ Logistics”) also appeared in the documents produced by the parties or were mentioned by the witnesses in the course of their oral evidence.  BQ Logistics was a Shenzhen company.  The evidence shows that:-

(1) There was significant overlap in the shareholders and senior management of these companies in that:-

(a) Liao EH was then holding 5,000 of the 10,001 shares issued (being 49.995% of the shares issued) in BQIH, 34% shareholding in SLY, and 34% shareholding in BQ Logistics.  He was also the “legal representative” （法定代表人）of both SLY and BQ Logistics.

(b) Liao MH was similarly holding 5,000 of the 10,001 shares issued (being 49.995% of the shares issued) in BQIH, 33% shareholding in SLY, and 33% shareholding in BQ Logistics.  He was also the sole director of BQIH.

(2) These companies appeared to have been sharing their resources such as the business premises in Unit 9B and the Shenzhen Address and their personnel such as Tsang SC to some extent as revealed by the evidence.

68.  In fact, as revealed by Liao EH during cross-examination, his companies appeared to be going through some kind of restructuring in or about the time when Chan was recruited as a cross-border driver.  According to Liao EH, SLY was registered in Shenzhen in 2005.  In 2009, SLY began discussions with “聯想集團” (the Lenovo Group) to explore the opportunity of having some kind of co-operation with a view to enabling SLY to be publicly listed in Shenzhen. However, nothing materialized since SLY was not strong enough to meet the listing conditions.  In or about 2010 to 2011, Liao EH registered BQ Logistics in Shenzhen with a view to restructuring and consolidating the business and operations of SLY in Shenzhen.  It is noted from the documents produced that the Hong Kong company also changed its name during this period in early 2011 from its previous name of San Xing Express Company Limited to its present name of  Baiqian International Holding Limited on 9 February 2011, probably also as part of the purported restructuring and consolidating exercise.

69.  Having considered the evidence available, I do not accept the story of BQIH that these three companies were separate and independent companies.  It is evident that these three companies, namely BQIH, SLY and BQ Logistics, are associated companies within the same group and they have significant overlap in their shareholders and management. The structure of the group might then be in a state of flux in 2011 at the time when Chan was recruited as a cross-border driver when the role of each one of these companies within the group was not yet clearly defined.

(H) The parties’ own view of their relationship

70.  I have no doubt that Chan considered BQIH as his employer.  Although on some occasions such as in his Notification of Accident dated 13 August 2012 he had mis-stated the name of his employer as “百千國際物流有限公司” (Baiqian International Logistics Limited Company, or BQ Logistics), I am of the view that such kind of mistake is understandable given that the Chinese name of BQ Logistics is so confusingly similar to the Chinese name of BQIH and that such name of “百千國際物流有限公司” (BQ Logistics) was actually painted on the body of the Lorry driven by Chan.

71.  The position of BQIH is more equivocal.  On the one hand, BQIH named itself as Chan’s employer in Chan’s application to AXA for joining its MPF scheme.  On the other hand, it insisted that SLY was the employer of Chan instead.  It appears to me that both BQIH and SLY had intentionally tried to keep the status of the cross-border drivers ambiguous so as to avoid the legal consequences of whatever enforcement actions that might be brought against BQIH and/or SLY for non-compliance with the relevant employment–related regulations, such as the NSSF in China and MPF and Employees Compensation insurance in Hong Kong.

BQIH was Chan’s employer

72.  By making an informed, considered and qualitative assessment of all relevant evidence available, it gives me a strong overall impression and I therefore find accordingly that BQIH was the employer of Chan.  In arriving at such a decision, I have placed particular weight on those factors discussed under sub-headings (A), (B), (E), (F), (G) and (H) above.

WHETHER AND HOW THE ACCIDENT HAPPENED; WHETHER BQIH IS LIABLE?

73.  I notice that the Accident as described by Chan in his witness statement is slightly different from the case pleaded on his behalf, but the differences are relatively insignificant.  It is Chan’s case as contained in his witness statements and oral testimony given at trial that:-

(1) He drove the Lorry to and arrived at the place where the Accident subsequently happened at about 4:30 pm on 2 August 2012.  It was the cargo unloading area of UPS in the Hong Kong International Airport Freight Forwarding Centre. There was no one from UPS to unload the cargoes from the Lorry for Chan.  He then began to unload the cargoes from the Lorry by himself.

(2) The cargoes were placed on wooden pallets.  He was then carrying out his work inside the cargo area of the Lorry.  He inserted the forks of his pallet jack underneath a wooden pallet with a cargo weighing about 250 kg placed on top.  The relevant pallet jack was borrowed from an UPS staff known to Chan by the name of “阿花” (“Ah Fa”) or “花仔” (“Fa Jai”).

(3) When he attempted to move by pulling the pallet of cargo with his pallet jack, he noticed that it was jammed with another pallet of cargo.  He tried to move the pallet of cargo by pulling hard with his pallet jack for several times but without success.

(4) When he tried to pull again, the wooden pallet broke and the forks of the pallet jack were let loose suddenly causing him to lose his balance and fall back onto the floor of the cargo area of the Lorry, landing on his buttock and suffering injuries in his waist or back.  Ah Fa of UPS saw the Accident.  He unloaded the two pallets of cargoes from the Lorry for Chan.

(5) Immediately after the Accident, Chan rang up Tsang SC and informed him of the Accident.  Tsang SC instructed Chan that he had to drive the Lorry back to BQIH no matter what happened.  Chan took a rest for about an hour at the spot of the Accident before he drove off from the scene.

(6) He said that when he first joined BQIH, he was only required to drive the Lorry to transport goods to prescribed destinations according to the instructions given to him.  However, since 1 July 2012, BQIH required him to take up loading and unloading duties as well.  BQIH had never provided any tools for him to carry out his loading and unloading tasks.  He talked to Tsang SC in early July 2012 on this matter and reflected that it would be very difficult for him to carry out his tasks without a pallet jack, but Tsang SC responded by asking him to borrow pallet jack from the airport people.  In fact, the pallet jack that he used in the Accident was borrowed from an UPS employee known to Chan as “阿花” (“Ah Fa”) or “花仔” (“Fa Jai”).  Chan believed that if BQIH had provided suitable pallet and pallet jack for him, the accident could have been avoided. Chan also said that BQIH had failed to assign any or any sufficient manpower to help him to perform his loading and unloading tasks.  Nor had he been given any instructions, guidance, or training on loading and unloading cargoes.

(7) He had complained to Tsang SC on or about 25 July 2012 about these new arrangements, but his complaint was simply ignored.

(8) He had been assigned to handle the UPS tasks during this period.  He was arranged to work from 9 pm to 6 am.  At first, BQIH arranged a rotation of shift twice a week but it was subsequently changed to once a week.

(9) Though he was dissatisfied with the new arrangements under which he and the other drivers were all required to perform cargo loading and unloading duties, he never said that he would resign from his job as alleged by BQIH.

(10) He rang Tsang SC in the evening on the day of the Accident to report the Accident to him.  Tsang SC instructed Chan to return the Lorry to BQIH by parking it at the Stonecutters Island car park in Cheung Sha Wan district.

(11) As the pain in his low back was getting serious, Chan went to seek treatment from a bonesetter on 3 August 2012.

(12) Chan even attended the Accident & Emergency Department of the Queen Mary Hospital for treatment at around 4 am of 4 August 2012 due to his severe and intensifying pain.  He rang Tsang SC on 4 August 2012 to inform him that he needed to take sick leave due to his injuries.  However, Tsang SC told him that he would not have to attend work anymore.

(13) On 5 August 2012, an employee of BQIH went to the vicinity of Chan’s home and took back his key and driver’s documentation on behalf of BQIH.

74.  From the documents contained in the trial bundles, Chan reported the Accident to the Labour Department of the HKSAR Government by submitting a Notification of Accident dated 13 August 2012 stating that he sprained his low back when he was unloading cargoes on 2 August 2012 at 4:30 pm.  He also stated in such notice that the contact person of his employer was Tsang SC though he mis-stated the name of the employer company as BQ Logistics.  Officers of the Labour Department took statement from Chan in the form of a declaration made by him on 23 August 2012.

75.  In so far as the position of BQIH is concerned, not only did it dispute the employment status of Chan it did not admit the accident either.  BQIH averred that the Accident did not occur in the course of Chan’s employment as alleged or at all.  BQIH also averred that: Chan was employed by SLY as a cross-border driver for transportation of cargoes between Shenzhen and Hong Kong using the Lorry provided by BQIH; BQIH did not give any instructions to Chan to load or unload cargoes; the loading and unloading of cargoes had no connection with BQIH’s trade or business; the accident did not result from a risk which was necessarily incidental to the performance of Chan’s duties; Chan had no express or implied authority to load or unload cargoes; Chan’s injury was attributable to his own serious and wilful misconduct; and there is no or insufficient causal connection between the Accident and his employment.

76.  Of the three witnesses who gave evidence for BQIH, two of them, namely Tsang SC (DW1) and Liao EH (DW2), had part of their evidence dealing with the Accident.  Taking their evidence as contained in their witness statements and as given at the trial together, it appears rather clearly that they did not have much to say directly about the Accident.  What they had been trying to do was to implicate, but without stating explicitly, that there was not the Accident as claimed by Chan because he was not required to load or unload cargoes, and that he made up his story of having suffered injuries in the Accident because he was then having a labour dispute with his employer and was not happy about the new rotation arrangement made by BQIH or SLY under the new UPS contract. 

77.  It is the evidence of Tsang SC (DW1) that:-

(1) Chan had a labour dispute with SLY since about July 2012.

(2) Chan left the employ of SLY after he had finished his work on 2 August 2012.

(3) Chan rang him on 2 August 2012 after the alleged Accident.  He advised Chan that he should attend the A&ED for medical care immediately.  Chan was also asked to contact SLY for further advice on the handling of his incident.  Chan told him that he wanted to retract from his early resignation, but he told Chan that that was a matter between him and SLY.

(4) He did not hear from Chan on 3and 4 August 2012 until Chan returned his key and driver’s documentation to SLY through his Chan’s colleague in Shenzhen.

(5) On 31 August 2012, SLY asked him to relay a message to Chan asking him to go to Shenzhen for a labour conciliation.  However, Chan did not respond to such request.

(6) Regarding the UPS cargo unloading area in Hong Kong International Airport Freight Forwarding Centre where the Accident allegedly happened, UPS had designated people to unload cargoes from lorries to ensure that the unloading operation was done efficiently.  Such UPS people would not allow lorry drivers to unload cargoes from their own lorries. Further, there was generally a shortage of unloading bay in the UPS cargo unloading area.  Lorries had to be driven away immediately after they had finished unloading their cargoes.  UPS would not allow any lorry to park there for more than an hour.  Tsang SC believed that if there was any incident happened in the UPS cargo unloading area, UPS people would follow up and take steps to inform the employer of the lorry driver involved in the incident, but he said that he had not received any telephone call from UPS.

78.  Under cross-examination, Tsang SC agreed that he had never given instructions to Chan as to how to handle cargoes or heavy loads, but he also said that he had never given instructions to Chan to handle or move the cargoes.  He conceded that he had never been to the UPS cargo unloading area in the Hong Kong International Airport.  He said that he was speaking from his 16 years of working experience with UPS.  He said that Chan rang him at about 8 pm or 9 pm after the Accident.  Tsang SC said he did not know why Chan rang him instead of ringing up a member of staff of SLY to inform him of the Accident.

79.  It is the evidence of Liao EH (DW2) that:-

(1) There had been a labour dispute between Chan and SLY since July 2012.

(2) At that time SLY had signed a contract with UPS agreeing to provide 2 lorries with drivers, one lorry for day shift and the other lorry for night shift, for providing transportation services to UPS.  Chan was one of these drivers deployed for the UPS contract.

(3) To avoid frequent change of lorries and drivers, UPS requested such change should take place on monthly basis only.  SLY was concerned that the drivers might have difficulty in adjusting to the new working requirements, it arranged the lorries and drivers to rotate their duties once every two days.

(4) After about a week, upon the request of UPS, SLY decided to change the rotation frequency to once every three days.

(5) When Chan’s supervisor Ah Bun (黃魯彬) notified Chan of such change in the evening of 10 July 2012, he reacted strongly and threatened to resign immediately if SLY implemented such change.

(6) Ah Bun told Chan that he could not leave the job immediately and should at least wait until SLY managed to find another driver to take his place.  Ah Bun further told Chan that he could stick to the old rotation pattern for the time being and that he could be released when SLY managed to find another driver to take his place.

(7) Chan left his employment with SLY after he had finished his duties on 2 August 2012 because at that time SLY had already found another driver to replace Chan.

(8) Chan had rung up Tsang SC and SLY after the alleged Accident on 2 August 2012.  Upon learning the incident, Liao EH had advised Chan that he should seek medical treatment immediately.

(9) Subsequently, Chan told SLY that he did not want to leave his job.  However, SLY advised Chan that his agreement with SLY to leave could not be changed.  Chan then threatened that if he drove the Lorry to Jiangmen of China, SLY would not be able to recover it since he had served military service in Jiangmen before.  SLY told Ah Bun about Chan’s threat and asked Chan to park the Lorry in Cheung Sha Wan and handed over his key and driver’s documentation to Shenzhen.  Chan declined to hand over those items for the reason that he had difficulties in walking.

(10) SLY did not hear any news from Chan on 3 and 4 August 2012 until 5 August 2012 when a Shenzhen employee of SLY, who is a village folk of Chan, handed over Chan’s key and driver’s documentation to SLY.  Liao EH said that since Chan knew that his village folk would be visiting Hong Kong, he asked such village folk to pay him a visit at his home to pick up his key and driver’s documents for handing over to SLY. Liao EH said that SLY did not know this arrangement beforehand.

(11) On 31 August 2012, Liao EH asked Tsang SC to relay a message to Chan and ask Chan to go to Shenzhen to attend conciliation.  However, Chan did not respond.

(12) Chan was a driver.  His duty was only driving.  He was not required to undertake any cargo loading, unloading or moving duties.  Liao EH, SLY or BQIH had never given any instructions to Chan to load, unload or move cargoes.  He had no need to use any tools for unloading or moving cargoes.  Liao EH claimed that he did not know why Chan would have used tools for unloading the cargoes by himself.  He therefore had reservation and was skeptical about Chan’s allegation that he met with the Accident.

80.  I notice that there are a number of gaps in the case of BQIH and in the evidence of both Tsang SC and Liao EH concerning the Accident and their implications against Chan.  The following are two examples of these gaps:-

(1) Firstly, if the allegations of Liao EH were true, what actually was discussed between Ah Bun and Chan on 10 July 2012 would be of considerable importance.  Liao EH was not a party to the conversation.  He would not have any personal knowledge of it.  At best, he might have been told about the contents of such conversation by Ah Bun, but Liao EH never stated the source of his information either in his witness statements or his oral evidence.  Worst still, it appears that no witness statement had ever been prepared for and signed by Ah Bun.  Ah Bun was not called to give evidence at this trial.  Though Liao EH attempted to explain in paragraph 21 of his supplemental witness statement that Ah Bun had left the employ of SLY on 30 April 2013 and Liao EH had not been able to reach him for more information, no particulars were given to satisfy the court that Ah Bun could not be reached despite due diligence and reasonable effort by the witness or BQIH.

(2) Secondly, Liao EH alleged that Chan had told SLY that he did not want to leave his job, but SLY advised Chan that his agreement with SLY to leave could not be changed.  Chan then made a threat to drive the Lorry to Jiangmen and SLY then told Ah Bun about Chan’s threat.  As a result, SLY asked Chan to park the Lorry in Cheung Sha Wan.  I notice that these allegations made by Liao EH were rather ambiguous and devoid of the necessary particulars.  The most obvious deficiency in these allegations is that SLY is a company which could only act through natural persons but Liao EH did not tell us in his evidence whom did Chan talk to and by whom was the alleged advice given.

81.  I have already found earlier that the defence witnesses, in particular Tsang SC and Liao EH, were evasive, unreliable and could not be trusted.  Upon a close analysis of the evidence given by Chan about the Accident, I find Chan’s story regarding the Accident coherent and logical.  I, therefore, prefer Chan’s account of the events to the story given by the two defence witnesses of Tsang SC and Liao EH.

82.  It is my finding that:-

(1) Starting from July 2012, Chan was also required to carry out cargo loading and unloading duties under the new UPS contract;

(2) The Accident occurred in the course of Chan’s employment with BQIH;

(3) Further, BQIH, as the employer of Chan according to my finding, was under a duty of care to Chan;

(4) Alternatively, if I were wrong in finding that BQIH was the employer of Chan, BQIH also owed Chan a duty of care as the person giving instructions of work to him on behalf of his employer;

(5) It was admitted by Tsang SC under cross-examination that no instructions had ever been given to Chan on how to handle the cargo loading and unloading tasks or how to perform them safely;

(6) It was further admitted by Tsang SC under cross-examination that no tools had ever been provided to Chan for him to perform the cargo loading and unloading tasks;

(7) Based on Chan’s evidence in assessing how the Accident happened, the positioning of the pallets of cargoes inside the cargo area of the Lorry was unsafe and the wooden pallet used was also unsafe.  As a result two pallets of cargoes were jammed together and the wooden pallet broke when it was being pulled with the pallet jack;

(8) As such, BQIH breached its duty of care by failing to put in place a safe system of work, to provide suitable tools, equipment, or appliances for Chan to carry out his duties.  BQIH also breached its duty of care by failing to give any safe instructions to Chan;

(9) The Accident was caused by and resulted from the aforesaid breaches of its duty of care by BQIH;

(10) In view of my finding that Chan was required by BQIH to undertake cargo loading and unloading duties as from July 2012 onwards and the fact that BQIH did not adduce any evidence for proving what safety measures should have been taken by Chan for protecting himself, the plea of contributory negligence in the Defence is therefore rejected.

WHAT WERE THE INJURIES AND DAMAGES SUFFERED BY CHAN?

Injuries and medical treatments

83.  Chan complained that he suffered back injuries in the Accident.  He said he went to consult a Chinese medical practitioner in 許國賢骨傷科醫館 (Hui Kok Yin Bone Injuries Clinic) on 3 August 2012. He was granted one day sick-leave.

84.  Due to intensifying pain, Chan went to the Accident & Emergency Department of Queen Mary Hospital for treatment at about 4 am of 4 August 2012.  It was recorded in the medical certificate dated 15 October 2012 issued by Dr Herbert Yuen, resident of the Accident & Emergency Department, Queen Mary Hospital, that Chan complained of lower back pain, but there was no lower limb numbness or weakness, and that he was alert and afebrile.  X-ray of lumbar spine showed no fracture.  He was given analgesics and discharged with two days sick leave granted to him.

85.  Chan subsequently attended the Sai Ying Pun Clinic (Family Medicine) (“SYPC”) for consultation and treatment for 5 times on 22, 24 and 28 August 2012, and 3 and 5 September 2012.  Medical report dated 22 October 2012 compiled by Dr Ngai Ming Leon, resident in Sai Ying Pun Clinic (Family Medicine), Department of Family Medicine & Primary Healthcare, Hospital Authority, recorded that Chan claimed that his back was sprained on 2 August 2012 when he was pulling heavy objects.  When Chan first attended SYPC on 22 August 2012, he complained about having persistent back pain.  Numbness on his right foot without any weakness was noted.  Physical examination revealed tenderness and stiffness over the 2^nd and 3^rd lumbar paraspinal muscle and the range of spinal movement was markedly limited in flexion.  Though there was decreased sensation over the whole right foot, its power was not affected.  Doctor’s diagnosis was back sprain and radiculopathy.  Chan was referred to physiotherapy.  He was discharged with oral analgesics.  During the period when Chan was waiting for physiotherapy treatment in the public hospital, he went back to SYPC on four more occasions during the period from late August to early September 2012 to seek treatment for his back pain.  It also appears from the medical receipts produced by Chan that he had sought medical treatment in Dongguan City in January, March and October 2013.

86.  Chan was assessed by the Employees’ Compensation (Ordinary Assessment) Board on 10 December 2012 and 4 January 2013.  A Form 7 Certificate of Assessment was issued on 18 January 2013.  Chan was assessed to have sustained back sprain resulting in residual pain.  Period of absence from duty necessary as a result of the injury was assessed to be 3-5 & 22-31 August 2012, and 3-7 September 2012.  Loss of Earning Capacity permanently caused by the injury was assessed by the Board to be 1%.  Chan applied for review of the assessment by the Board.  The review was carried out on 24 May 2013.  The Board, by a Form 9 Certificate of Review of Assessment issued on 7 June 2013, confirmed the original assessment which remained unchanged.

87.  On 16 January 2014, a joint medical assessment was carried out on Chan by Dr Lam Chi Keung Johnson appointed by Chan’s solicitors and Dr Chiang Si Chung Arthur appointed by BQIH’s solicitors.  Dr Lam and Dr Chiang submitted a joint report dated 10 April 2014 (“the Joint Report”).  In the Joint Report, it was recorded that the Accident was the first time Chan had an accident on duty.  Before the Accident, he had no previous injury or pre-existing pain in his back and his health was satisfactory with no chronic disease or previous major surgery.  Both Dr Lam and Dr Chiang agreed that Chan suffered soft tissue injury to his low back which injury was consistent with the mechanism of injury described if the Accident did happen.  Radiologically, there were very mild degenerative changes in Chan’s lumbar spine and they were likely to be a pre-existing condition which might be symptomatic or asymptomatic.  He did not require or at least there was no evidence suggesting that he required any treatment or therapy for his back before the Accident.  Functionally, Chan could do jobs that required long hours of driving and sitting.  It was likely that Chan enjoyed rather painless and satisfactory function in his low back before the Accident.  Both doctors were of the view that the treatment Chan received was appropriate and that no surgery was required for his injuries.  They also opined that Chan’s back injury had reached maximal medical improvement at the time of the joint assessment.

88.  Dr Lam, medical expert retained by Chan’s solicitors, took the view that whilst it was possible that Chan suffered only mild soft tissue injury to his back in the Accident, it was also possible that the soft tissue injury to his low back was more significant than it first appeared taking into account the subsequent chain of events including the clinical picture (that the pain was so severe that Chan needed to rest on the floor for about an hour before he could get up after the Accident), the clinical progress with treatment (that the pain increased to such an extent that Chan felt the need to attend the Accident & Emergency Department, Queen Mary Hospital and he subsequently felt the need to seek treatment in mainland China for about 40 days resulting in only partial, though significant, improvement), the further investigation findings, and the latest findings in the joint assessment (in that Chan still complained of right buttock numbness on prolonged sitting for over an hour; numbness in the buttock when lying on one side during long sleep; that Chan saw it fit to take some kind of medicine he got from Thailand every day; that there was still mild tenderness over the lumbar paraspinal muscle with muscle tightness and guarding without muscle spasm; that there was mild tenderness over the lumbosacral junction and the sacrum).  Dr Lam opined that it was likely that Chan had more significant or at least moderate degree of soft tissue injury to his low back, causing persistent low back pain and impairment as a residue of the Accident.  He assessed that the degree of residual pain and impairment to be mild.  He opined that the fact that Chan suddenly began to experience rather persistent low back symptoms with physical signs after the Accident made it unlikely that the problem was a result of the natural progression of degeneration which was usually a slow and gradual process.  He further opined that the problem was more probably a result of the Accident.  As regards Chan’s work capacity, he had returned to work as a driver with duties for short trips within Hong Kong instead of cross-border.  Dr Lam opined that, with more exercise to strengthen his back, Chan, gradually and eventually, should be able to return to his pre-accident job as a cross-border lorry driver with reduced capacity in that he would need more short breaks for rest or stretching after prolonged period of driving, but he should avoid long period of driving for, say, over 12 hours.  It is Dr Lam’s evaluation that Chan has suffered about 3% impairment of the whole person and 3% loss of earning capacity.

89.  On the other hand, Dr Chiang, medical expert retained by BQIH’s solicitors, based on the description of Chan’s symptoms as stated in the SYPC clinical records, came to the view that Chan suffered soft tissue injury of his low back with mild symptoms and signs and that the initially noted limitation in flexion range had likely improved a lot about one month after the Accident by early September 2012.  The absence of limitation in the straight leg raising test in the initial three weeks after the Accident, and the satisfactory condition of Chan’s low back in early September 2012 might have suggested that the mild limitation in the right-sided straight leg raise test was probably a transient physical sign.  The late appearance of numbness in the right foot, which was not confirmed by sensation testing, would also have suggested that the numbness was possibly mild and transient.  The fact that Chan complained of right buttock numbness on prolonged sitting and prolonged sleeping only recently but not previously suggested that the symptom should not be related to his injury.  It could either have arisen from events unrelated to the injury at a later stage, or it might not be actually present since there was no supporting unilateral physical sign in the right lower limb to explain for the right buttock numbness. Further, latest physical examination showed that Chan’s low back was in a satisfactory condition with no muscle spasm felt and no display of motor or sensory neurological deficit in both lower limbs.  X-ray also showed that the lumbar lordosis was well-preserved.  Dr Chiang was also of the view that the recently noted bilateral limitation of the straight leg raise test was unlikely to be related to the injury Chan sustained in the Accident because the same test carried out in both limbs in the early stage after the Accident was normal though there was transient limitation in the right-sided straight leg raising test.  Dr Chiang noted that the range of moving test of the back and tenderness were subjective tests which depended on the patient’s effort or his description, and it might not be as reliable as the objective test.  Taking into account all the information available, Dr Chiang considered that Chan’s soft tissue injury had likely attained a reasonable recovery by early September 2012 and that the latest examination results supported the view that Chan had achieved a satisfactory recovery.  Dr Chiang opined that Chan’s total impairment of the whole person resulting from his injury was 1% and his loss of earning capacity was also 1%.

90.  Regarding Chan’s sick leave, Dr Lam opined that the sick leave granted to Chan from time to time by his treating specialists/doctors was appropriate and should be endorsed.  Dr Chiang agreed that the sick leave outlined in the Form 9 should be granted to Chan.

91.  The difference between the respective opinion of Dr Lam and Dr Chiang is more nominal than real.  Though Dr Lam seems to be suggesting than the soft tissue injury sustained by Chan might be somewhat a bit more serious that it first appeared, his conclusion seems to be that Chan had recovered reasonably well; that he could return to his pre-accident job as a cross-border lorry driver gradually and eventually; and that both his impairment of the whole person and his loss of earning capacity were relatively mild at 3%.

Assessment for employees’ compensation

92.  Chan’s claim for employees’ compensation consists of 3 heads of claim as follows:-

(1) Compensation in case of permanent partial incapacity under s 9 of the Employees’ Compensation Ordinance (Cap 282) (“ECO”);

(2) Compensation in case of temporary incapacity under s  10 of ECO; and

(3) Payment of medical expenses under s 10A of ECO

(a) S 9 Compensation

93.  The injury suffered by Chan was not specified in the First Schedule of ECO.  Therefore, the applicable subsection for assessing his compensation for permanent partial incapacity is s 9(1)(b).

94.  Mr Liu, counsel for Chan, referred me to the case of Kan Wai Yip v Everbest Port Services Limited, unreported, DCEC 383/2008, 3 February 2009, paras 36-45 in which HH Judge Marlene Ng pointed out that in assessing the loss of earning capacity, the court should come to its own assessment in accordance with the guidelines in s 9(1)(b) of ECO, instead of merely adopting the percentage of loss of earning capacity given by expert.  Mr Liu submitted that, taking all the sufferings and circumstances of this case and comparing Chan’s injury with the injuries in Schedule 1 of ECO, the appropriate and reasonable assessment of the percentage of loss of earning capacity should be 2%.

95.  Mr Lam, counsel for BQIH, submitted that Chan did not file any Notification for Appeal to Form 9 for this trial in accordance with s 18 of ECO and therefore should not be heard on arguments involving the decision of the Medical Assessment Board.  Hence, he submitted, the 1% loss of earning capacity as assessed by the Board should be adopted.

96.  S 18 of ECO requires that any appeal shall lie to the District Court from any decision or assessment of the Board within 6 months of such decision or assessment, but the court may, if it thinks fit, extend the time within which to appeal notwithstanding that the time has elapsed.  It is true that no appeal has been taken out against the assessment of the Board in the present case.  The result is that, according to s 16H of ECO, the assessment and decision of the Board as contained in the Form 9 Certificate of Review of Assessment issued on 7 June 2013, shall be admitted in evidence without further proof on its production in any court and, until the contrary is proved, it shall be presumed that the certificate is so issued and signed, and shall be evidence of the matters stated therein, ie including the nature of Chan’s injury, the period(s) of sick leave necessary as a result of such injury, and Chan’s percentage loss of earning capacity of 1%.  However, there is nothing in s 16H or any other provisions in ECO suggesting that such piece of evidence shall be conclusive.  It is for the court to draw its own conclusion as to the earning capacity of Chan.  In determining the matter, the court has to take into account all relevant factors including the Form 7 or Form 9 if one is available.

97.  Whilst I accept Mr Liu’s submissions that the court should come to its own assessment of Chan’s loss of earning capacity in accordance with the guidelines in section 9(1)(b) of the ECO, I am not convinced, having considered all the evidence available, that Chan’s loss of earning capacity should be 2% instead of 1% as submitted by Mr Liu.

98.  Chan was born on 30 July 1956.  He was aged 56 when the Accident happened on 2 August 2012.  Given that Chan was over 56 years of age at the time of the Accident, a lump sum equal to 48 months’ earnings should be used for calculating Chan’s s 9 compensation: see s 7(1)(c) of ECO.

99.  There is no dispute that Chan’s monthly salary at the time of the Accident was HK$16,000.00.  However, there is a dispute between the parties as to whether the employer’s contribution to the Mandatory Provident Funds should be included in calculating the monthly earnings of Chan.  Chan’s counsel has adopted the sum of HK$16,325.00 as Chan’s monthly earnings, of which the sum of HK$325.00 was the employer’s monthly contribution to Chan’s MPF account.[1] On the other hand, BQIH’s counsel has adopted the figure of HK$16,000.00.  It was submitted by BQIH’s counsel and I agreed that, for the purpose of assessing employee’s compensation, Chan’s “earnings” should not include employer’s contribution to his MPF which was specifically excluded from the meaning of “earnings” as defined in s.3 of ECO.[2]

100.  By reason of the foregoing, I assess the s.9 compensation for his permanent partial loss of earning capacity to be:

   HK$16,000.00 x 48 x 1% = HK$7,680.00

(b) S 10 Compensation

101.  S 10(1) of ECO provides:-

“Where temporary incapacity whether total or partial results from the injury, the compensation shall be the periodical payments hereinafter mentioned, or a lump sum calculated accordingly, having regard to the probable duration, and probable changes in the degree, of the incapacity. Such periodical payments shall be, or shall be at the rate proportionate to, a monthly payment of four-fifths of the difference between the monthly earnings which the employee was earning at the time of the accident and the monthly earnings which he is earning, or is capable of earning, in some suitable employment or business during the period of the temporary incapacity after the accident.”

102.  According to s 10(5), the maximum period that an employee can receive periodical payments under s 10 is 24 months or for such further period being not more than 12 months as the court may allow.

103.  Mr Liu, counsel for Chan, submitted that the 24-month period from 3 August 2012 to 2 August 2014 under this head of claim can be broken down into three parts as follows:-

(1) 3 August 2012 - 7 September s2012

(a) Medical certificates were granted covering 18 days during this period instead of the whole period of 36 days.

(b) Mr Liu submitted that the court could make award covering those days not covered by sick leave certificates as well if the court is not satisfied under s 10(1) that Chan was “...... capable of earning, in some suitable employment or business during the period of the temporary incapacity after the accident”.

(2) 8 September 2012 - 31 June 2014

(a) This period was not covered by sick leave certificates.

(b) Mr Liu submitted that despite the fact that Chan was still seeking medical treatment in Mainland China during part of this period, he did try his best to secure three employments during this period though the first two did not last long.

(i) Chan worked a few days in December 2012 as a private car driver and he earned about HK$700.00.

(ii) Chan worked as a driver in January 2012 and earned HK$5,900.00.

(iii) Chan worked as a local driver (instead of cross-border driver) with Uni-Link Logistics Ltd. during the period from June 2013 to June 2014 for about HK$8,000.00 per month (or HK$8,400.00 with MPF) for about 7.5 months.

(iv) Mr Liu acknowledged that when Chan was jointly examined by two medical experts, namely Dr Lam and Dr Chiang appointed on behalf of Chan and BQIH respectively, on 16 January 2014, both experts opined that Chan should be able to return to his pre-injury job with his satisfactory recovery.  Mr Liu indicated that the applicable period for assessing Chan’s s 10 claim might be reduced to 16.5 months covering the period from 8 September 2012 to 15 January 2014.

(3) 1 July 2014 – 2 August 2014

(a) From 1 July 2014 onwards, Chan has been in the employ of Uni-Link Logistics Ltd. with a monthly salary of HK$16,000.00.

104.  It is the submissions of Mr Lam, counsel for BQIH, that:-

(1) For the first period from 3 August 2012 to 7 September 2012, the whole period of 36 days instead of only those 18 days covered by medical certificates be counted for the purpose of assessing s 10 compensation.

(2) No s 10 damages should be assessed for the period after 7 September 2012 since there were not any medical certificates issued covering such period.

105.  I accept the submissions of Mr Liu that Chan had tried to secure employments which his physical condition could manage.  Though his physical condition had not yet recovered enough during the period from mid-September 2012 to January 2014 to enable him to be employed as a cross-border driver, he tried to do jobs as a local driver for private car within Hong Kong.  I agree with Mr Liu on the approach to be adopted for assessing s 10 compensation, though I do not agree that the amount of employer’s contribution to MPF could be taken into account by reason of the definition of “earnings” under s 3 of ECO when assessing the amount of Chan’s monthly earnings.

106.  I, therefore, assess Chan’s s 10 compensation as follows:-

(1) For the period from 3 August 2012 to 7 September 2012 for a period of 36 days:-

HK$16,000 x (29/31 + 7/30) x 4/5 = HK$14,961

(2) For the period from 8 September 2012 to 15 January 2014 for a period of 16.28 months:-

{HK$16,000 x 16.28 months - [HK$700 + HK$5,900 + (HK$8,000 x 7.5 months)]} x 4/5 = HK$155,104

(3) For the period from 16 January 2014 to 2 August 2014, there would be no s.10 compensation assessed.

(4) Hence, the total compensation under s.10 is:-

   HK$14,961 + HK$155,104 = HK$170,065

(c) S 10A Compensation

107.  Under s 10A(1) of ECO, if, in any employment, personal injury is caused to an employee by accident arising out of and in the course of his employment, his employer shall be liable to pay the medical expenses for the medical treatment in respect of such injury.  S 10A(1A) provides that unless otherwise provided by agreement in writing entered into by the employer and the employee, medical expenses which an employer is liable to pay under s 10(1) does not include those in respect of medical treatment given outside Hong Kong in relation to an accident occurring in Hong Kong.

108.  Mr Liu, counsel for Chan, quite rightly claimed only the sum of HK$685.00 as medical expenses incurred by Chan in Hong Kong during the period between 3 August 2012 and 3 September 2012 under s 10A without including those medical expenses incurred by Chan in Mainland China.

109.  Interestingly, counsel for BQIH in their Opening Submissions (paragraph 64), stated that the sum of HK$12,516.25 was acceptable under s 10A.  It appears that they were referring to the sum of HK$12,516.25 claimed by Chan in the PI Action as the medical expenses incurred which included those incurrred by him in Hong Kong as well as those incurred in Mainland China.  As such, it must be understood to mean that BQIH did not dispute the HK$685 claimed by Chan under s 10A.

110.  To summarise, the compensation of Chan under ECO is assessed as follows:-

Section 9 compensation:	HK$7,680.00
Section 10 compensation:	HK$170,065.00
Section 10A compensation:	HK$685.00
Total:	HK$178,430.00

Assessment for PI action

111.  Chan’s claim in the PI Action consists of the following heads of damages:-

(1) General damages for pain, suffering and loss of amenities (“PSLA”)

(2) Pre-trial loss of earnings

(3) Special damages for medical expenses, travelling expenses and tonic food expenses

(4) Damages for loss of earning capacity.

(a) PSLA

112.  Mr Liu, counsel for Chan, submitted that an award for PSLA in the present case should be about HK$150,000.  Mr Lam, counsel for BQIH, suggested that HK70,000 was the appropriate award.  Having considered the submissions by both counsel and the authorities cited by them in support of their contention, I find that an award of HK$100,000 of HK$100,000 is appropriate for Chan’s case.

(b) Pre-trial loss of earnings

113.  Mr Liu submitted that the appropriate award under this head of claim should be about HK$271,805.82.  The basis of his submissions is by and large the same as those he made under the EC Action for s 10 compensation save for these two differences:-

(1) For s10 compensation claim under the ECO, a claimant is only entitled to claim a monthly payment of four-fifths of the difference (instead of the full difference) between the monthly earnings which he was earning at the time of the accident and the monthly earnings he is earning, or is capable of earning, in some suitable employment or business during the period of the temporary incapacity after the accident.  For a pre-trial loss of action claim in a personal injuries action, there is no such “one-fifth discount”.

(2) In the claim for pre-trial loss of earnings, Mr Liu has thrown in a further sum of HK$51,837.50 covering the period from 16 January 2014 to 31 July 2014 being the difference in the monthly earnings that Chan could otherwise have earned as a cross-border driver (HK$16,325.00, being HK$16,000.00 as the monthly earnings plus HK$325.00 being the underpaid MPF contribution made by BQIH) and the actual amount he earned as a local driver within Hong Kong (HK$8,400.00, being HK$8,000.00 as his monthly earnings plus HK$400.00 as the MPF contribution made by his employer).

114.  Mr Lam in his submissions argued and contended that:-

(1) The monthly salary earned by Chan at the time of the Accident was inclusive of MPF.

(2) Both experts agreed that Chan was able to return to his pre-accident work and that a sick leave period (for 3 August 2012 to 7 September 2012 for a total of 36 days) was appropriate.

(3) There is no evidence that Chan, aside from his own subjective complaint unsupported by objective medical evidence, was unable to return to his pre-accident work and earn at the pre-accident level upon cessation of the sick leave period.

(4) There is no evidence that Chan had tried to search for driving jobs with a pay comparable to his pre-accident job.

(5) In short, Mr Lam is submitting that there was no mitigation of his own loss by Chan.  Hence, Chan should only be allowed a sum of HK$19,200.00, being his loss of earnings for 36 days, as damages for his pre-trial loss of earnings.

115.  I do not agree with the submissions of Mr Lam for the following reasons:-

(1) There is clearly evidence showing that Chan was receiving medical treatments and multiple sessions of physiotherapy in Mainland China during 2013 and was still buying some kind of Thailand’s “bone pain plaster” for use in early 2014.  There is one matter I would like to mention here about some of the relevant Mainland China medical receipts.  Mr Lam cross-examined Chan on the dates and the serial numbers of two medical receipts issued by a government clinic in Mainland China and made the observation that the date on one of these two receipts apparently had been overwritten with a new date and that the serial numbers of these receipts appeared to be in the reverse order.  However, there is no evidence suggesting that the alteration was made by Chan or someone with Chan’s instructions or that any dishonest purpose was involved.  I further notice that there were in fact three other medical receipts issued by the same government clinic in March 2013 in Mainland China which also have their serial numbers in reverse order, but these 3 medical receipts were not challenged by Mr Lam.  For these reasons, I do not make any finding regarding these medical receipts and would just consider them as valid evidence in support of Chan’s claim for medical expenses incurred.

(2) In so far as the effort of Chan spent on finding driving jobs during the period from end of 2012 to mid-2014 is concerned, there is evidence that before he finally settled down with his current job as a cross-border driver in the employ of Uni-Link Logistics Ltd. since July 2014, he had taken up 3 jobs as local driver since they involved only shorter trips within Hong Kong, tasks which Chan considered that he could manage taking into account his then physical conditions.  From Chan’s employment pattern during this period of a year and a half, I see that the first two jobs were only for very short duration with the first one lasted only for a few days in December 2012 and the second one for about a month in January 2013, Chan’s employment began to last longer starting from about June 2013 when he was employed as a local driver for about 13 months from June 2013 to June 2014 before he secured a job as a cross-border driver in July 2014.  These changes are consistent with Chan’s claim that his physical condition at first did not allow him to drive long trips as a cross-border driver with the injuries he sustained in the Accident.  However, as his physical condition continued to improve, he could begin to take up cross-border driving duties sometime in 2014.

116.  In so far as Mr Liu’s submissions are concerned, I do not agree with him that Chan should be allowed a few more months from 16 January 2014 (ie the date of the joint assessment of Chan by the two medical experts) to 31 July 2014 for him to find a job as a cross-border driver.  Taking into account the fact that the back injury he suffered was relatively mild and that the available evidence showed that he had no need for medical treatment any more since around the end of 2013, I find that Chan could have found a job as a cross-border driver latest by about mid-January 2014.  As such, I find that Chan’s pre-trial loss of earnings largely overlap with his s 10 compensation under ECO save that adjustments shall be made to remove the “one-fifth discount” stipulated in s 10 of ECO and that a further sum representing employer’s 5% contribution to the MPF shall be added back to the assessed sum.  I calculate Chan’s pre-trial loss of earnings as follows:-

   HK$170,065.00 x 5/4 x (1 + 0.05) = HK$223,210.30

(c) Special damages for medical expenses, travelling expenses and tonic food expenses

117.  Mr Liu claims on behalf of Chan the total sum of HK$17,916.25 under this head, consisting of the respective sum of HK$12,516.25, HK$2,000.00 and HK$3,400.00 as medical expenses, transportation expenses, and tonic food expenses incurred.  Whilst the amounts claimed for transportation expenses and tonic food expenses were not disputed by Mr Lam for BQIH, he changed the position he adopted in paragraphs 64 and 89 of BQIH’s Opening Submissions (where it was clearly stated in paragraph 64 that “Medical expenses of $12,516.25 is acceptable” and in paragraph 89 that “The Defendant agrees to the sum stated in the Opening Submissions [of the Plaintiff]”) and submitted in paragraph 344 of his Closing Submissions that the sum of HK$8,890.00 in respect of the two Dongguan physiotherapy medical receipts should not be allowed on the ground that one of them had been tempered.  I reject Mr Lam’s submissions regarding these two receipts for the reasons I have already discussed in paragraph 115 (1) above.  I therefore allow these sums which totaled HK$17,916.25 as claimed.

(d) Loss of earning capacity

118.  Mr Liu claims on behalf of Chan the sum of HK$16,800.00 as the damages for Chan’s loss of earning capacity to reflect the handicap that Chan will suffer in the open labour market as a result of his physical impairment and loss of earning capacity.  On the other hand, Mr Lam submitted that there was no evidence to support such award.  With the very mild 1% physical impairment and 1% loss of earning capacity suffered by Chan, I do not find that Chan will suffer any or any significant disadvantage or handicap in the open labour market to justify an award to be made under this head of claim.  See Moeliker v A Reyrolle and Co Ltd [1977] 1 WLR 132 at 141.

Summary of assessment in PI action

119.  To summarise, the following is my assessment of Chan’s damages in the PI Action:-

Heads of Damages	Amount (HK$)	Amount (HK$)
PI Action Damages		341,126.25
PSLA	100,000.00
Pre-trial Loss of Earnings	223,210.00
Medical Expenses, Travelling Expenses, etc.	17,916.25
Loss of Earning Capacity	0.00
		(178,430.00)
EC Action Damages
s 9 Compensation	7,680.00
s 10 Compensation	170,065.00
s 10A Compensation	685.00
Amount net of EC Award		162,696.25

Interest

120.  Chan is entitled to interest on the awards as follows:

(1) in the EC Action

The award carries an interest at half of the judgment rate from the date of the Accident (2 August 2012) to the date of this judgment and thereafter at the judgment rate until full payment.

(2) in the PI Action

Interest on general damages at 2% per annum from the date of writ until the date of this judgment; interest on special damages at half of the judgment rate from the date of the Accident until the date of this judgment; and interest thereafter at judgment rate until full payment.

Costs

121.  I also make a costs order nisi that Chan is entitled to costs of the EC Action and the PI Action, to be taxed if not agreed, with certificate for counsel and that Chan’s own costs are to be taxed in accordance with Legal Aid Regulations.

122.  Lastly, I would like to thank counsel for Chan and both counsel for BQIH for their assistance at the trial.