RANA LEK BAHADUR v. BEST FIELD LOGISTICS LTD

DCEC948/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 948 OF 2008

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BETWEEN

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J U D G M E N T

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1.  The applicant, Rana Lek Bahadur (hereinafter refer to as “Rana”) sustained injury to his left foot in an accident during work on 27 December 2006. He claimed against the respondent as his employer at the time of the accident for compensations under sections 9, 10 and 10A of the Employees’ Compensation Ordinance, Chapter 282, (hereinafter referred to as “the ordinance”).

2.  The respondent denied liability and alleged that Rana was not its employee at the relevant period of time. The respondent further did not admit there was an accident at its container yard situated at D.D. No. 1743 CRP, Lot No. 107, Nam Sang Wai, Kat Heung, Castle Peak Road, Yuen Long in the New Territories (hereinafter refer to as “the container yard”).

The Applicant’s Case

3.  The applicant, Rana, is an ethnic Nepalese who was born in Hong Kong in 1969. He has a Hong Kong ID card. He received primary education in Nepal and came to Hong Kong to seek employment. He can read and write a little English, but is not able to communicate in Cantonese or any other Chinese dialect.

4.  Rana claimed he became an employee of the respondent since April 2006 up to the day of the accident. He was introduced to work for the respondent by a friend called Gurung Mek Bahadur (hereinafter referred to as “Mek”) to work for the respondent as a labourer. According to Rana, Mek was a leading head of the team of Nepalese workers, including Rana, at the respondent company. Mek can speak fluent Cantonese.

5.  It is Rana’s evidence that the respondent’s container yard was run by three persons: (1) Tak Shing; (2) 老李; and (3) a Mr Lee. The three would take turns to supervise his and other yard employees’ work. Rana was able to identify Mr Lee Chan Shing who was present in court was called as a witness for the respondent at the trial.

6.  Rana claimed that his working hours were from 8 am to 5 pm every day with one hour for lunch. He worked six to seven days a week and was paid a daily wage of $300 in cash. He would receive overtime payment at $50 per hour. He would be paid at the end of each working day from Mek who would obtain the wage payments from either Tak Shing or 老李 or from Mr Lee himself. There were seven Nepalese workers and seven Chinese workers at the container yard. He was not required to sign an attendance sheet or a receipt for the wages paid to him.

7.  Rana also claimed that he did not have paid statutory holidays and he was only paid for each day he reported for duty. While the Nepalese workers were all Hong Kong ID cardholders, Rana believed the Chinese labourers at the yard did not possess a Hong Kong ID card. He described the Chinese workers would often run away whenever the police raided the container yard, which happened almost once a week. Whenever the police came, the labourers’ ID card would be checked by the police and the ones without an ID card would be arrested at the container yard.

8.  Rana claimed the goods they were loading, unloading, moving at the yard onto and from the containers were computer equipments, fax machines, mobile phones, batteries and TV sets, etc. The workers were responsible for moving these goods often from one container to another and loading the goods into containers or into lorries.

9.  On the day of the accident, at about 2.15 pm in the afternoon, Rana was instructed to open the doors of a container together with a co‑worker by the name of Ramesh Kumar to unload the goods. According to him, the doors of the container could only be opened more easily when the container is lifted about 6 or 7 inches above ground. That was why a mobile crane was utilised and operated at that stage by the respondent’s mobile crane operator, Mr Kwok Wai-kit, known to Rana as “Fei Tsai”. Rana claimed while he was opening one of the container doors and his co-worker Ramesh was opening the other door and before the doors were fully opened, the container suddenly dropped onto the ground, trapping Rana’s left foot beneath the container. Ramesh shouted to the crane operator and other workers came to Rana’s rescue, including his friend, Mr Pun Shanta Kumar (“Pun”). Eventually, the crane lifted the container releasing Rana’s trapped left foot.

10.  It was Rana’s evidence that he and the other workers had intended at the time to call an ambulance, and Mr Lee, who was in charge of the daily operation, was going to call 999 when someone Rana described as a senior official of the respondent decided against it and a private car was used to drive Rana accompanied by Mek and Pun to the North District Hospital for treatment.

11.  Rana was admitted to the North District Hospital on the same day. X-ray showed his first and second left distal phalanges were fractured. An operation for close reduction and K-wire fixing was performed. He was discharged after seven days on 2 January 2007. He received follow-up treatments and physiotherapy and occupational therapy treatments. He was given sick leave from 27 December 2006 to 11 April 2007, and 9 June 2007 to 30 August 2007.

12.  Rana claimed he attended the respondent’s container yard after he was discharged from the hospital in or about mid-January. He submitted the sick leave certificate to the respondent on two occasions, namely, in January and February. He received on each occasion the sum of $6,000 for the sick leave period for January and February 2007. But the respondent had refused to pay him any more money after the second visit.

13.  The Medical Assessment Board issued a certificate of assessment to Rana on 10 March 2008. It certified his sick leave from 27 December 2006 to 11 April 2007 and 9 June 2007 to 30 August 2007. It further certified his loss of earning capacity due to the injury was 1.5 per cent.

The Respondent’s Case

14.  The respondent denied it was Rana’s employer at the time of the accident. In fact, the respondent denied there was any accident at the container yard on 27 December 2006.

15.  It claimed it had sub-let part of the container yard to three sub‑tenants at the material time. These three sub-tenants were by the name of Hang Tung Company, a Mr Tsui, and a company called Wan Fung（運豐）. Hang Tung’s sub-lease consisted of an area of 30,000 square feet and the monthly rental payment was $50,000, while Mr Tsui’s and Wan Fung’s were a covered area of 4,000 square feet and 3,000 square feet at $30,000 per month and $20,000 per month respectively. On the other hand, the respondent company occupied 90,000 square feet of the total 130,000 square feet container yard.

16.  Furthermore, Mr Lee claimed that the respondent would charge its sub-tenants service expenses on the use of the respondent’s mobile crane, the scale, and if required, the supply of labour services at the container yard. According to Mr Lee, the service income from the three sub-tenants amounted to $180,000 per month.

17.  Mr Lee denied the respondent employed illegal workers. He produced at page 58, bundle D a list of the respondent’s employees at the yard at the material time. The respondent had also produced copies of cheque payments to casual labourers with the photocopies of the labourers’ ID cards in support of its claim that the applicant, Rana, was never an employee of the respondent. Mr Lee claimed that there was no employment record at the respondent to show that the applicant was the respondent’s labourer and denied he was ever so employed at the time of the accident.

18.  The respondent’s mobile crane driver, Mr Kwok Wai-kit, gave evidence at the trial. He denied there was an accident involving a container and the mobile crane on 27 December 2006 with the applicant, Mr Rana. As the yard’s crane operator, he claimed the crane would only operate in co-operation and with the assistance of a signaller communicating through a walkie-talkie on the positions and the manoeuvring of the crane.

Findings

19.  The evidence of the applicant, Rana, and his witness, Mr Pun, directly contradicted the evidence of the respondent’s employees, Mr Lee and Mr Kwok. Mr Lee was the yard manager, Mr Kwok the mobile crane operator. According to Mr Lee and Mr Kwok, Mr Lee also possessed a licence to operate the mobile crane. He and Mr Kwok were the two licensed persons to operate the crane at this container yard.

20.  On one hand, Mr Lee and Mr Kwok claimed there were three sub-tenants at the respondent’s container yard and no accident involving Mr Rana took place at the yard on 27 December 2006. On the other hand, Rana and Pun both gave evidence on Rana’s left foot being trapped under a container while he was opening the door of the container at 2:15 pm of 27 December 2006. They both testified that Rana was taken to the North District Hospital immediately in a private car provided by the respondent because someone at the respondent’s container yard stopped the call to the police at 999.

21.  The medical records produced by the applicant from the North District Hospital Orthopaedics and Traumalogical Department confirmed that Rana’s left foot was crushed by a heavy object on the afternoon of 27 December 2006 while he was at work.

22.  According to Mr Lee, Rana was not an employee of the respondent. On the production of the respondent’s employee records, they failed to show any trace of Rana’s employment. Both Mr Lee and Mr Kwok denied ever working with Rana or gave work instructions to Rana at the container yard.

23.  The applicant, Rana, on the other hand, alleged that not only had he been employed by the respondent to work at the container yard since April 2006 up to the day of the accident, he had taken work instructions from Mr Lee whenever Mr Lam or 老李 was absent. On the average, Mr Lee, would give him instructions three or four times a month. Further, contrary to Mr Kwok’s evidence, Rana claimed there were no signaller employed at the yard, that workers, labourers such as Rana would communicate with Mr Kwok or Mr Lee, whoever was operating the mobile crane, by hand gestures. The windows of the mobile crane were always open at the time of operation so that the operator would be able to hear the workers’ communication on which direction the crane should move to. According to Rana, no walkie-talkies were engaged during the crane operations.

24.  Rana further gave detailed evidence on the respondent’s provision of food and refreshments when labourers were required to work overtime, the provision of gloves and drinking water at the labourers’ changing room, and the respondent’s office staff, identifying the two female clerks from records produced by the respondent. Such details given by the applicant could only be given by someone who is familiar with the working environment, the working conditions, the routine and the personnel employed involved. I find Rana to be an honest witness and has given truthful evidence on the employment and on the accident. His evidence was supported by Mr Pun Shanta Kumar.

25.  I find the evidence of Mr Lee and Mr Kwok contrived and inconsistent. The three sub-tenancies Mr Lee referred to were not supported by any documentary evidence. There were no tenancy agreements, no rental receipts issued according to Mr Lee. Even so, tenants such as the so-called Hang Tung which, according to Mr Lee, paid a monthly rental of $50,000 and other service expenses of over $30,000 to $40,000 a month at the container yard would expect the landlord and the service provider to issue receipts for the tenants’ own business accounts and tax-reporting purposes, but none had been forthcoming. It is difficult to believe the respondent’s container yard with a monthly income from its tenants of $280,000 should have kept no record of such income, and even more incredible that all such payments were made in cash.

26.  The applicant ran a business registration search of the two companies, the two so-called sub-tenants of the respondent: Hang Tung and Wan Fung. There were no business registration found for Wan Fung. So far as Hang Tung is concerned, there were two registrations found. One had ceased business on 28 February 2005. It was a paper and handcraft trading company. The other Hang Tung did not come into existence until 4 November 2008. In short, there was no registered business by the name of Hang Tung in existence at the time of the accident.

27.  The respondent has failed to produce any company records or accounts on the container yard in support of its claim that a portion of the container yard was sublet to three tenants at the time of the accident. The applicant was able to give detail daily routine and operations at the container yard, Rana was also able to identify Mr Lee as the man who had been giving instructions to Mr Lam and 老李 on a daily basis and instructions were given to Mek and Mek to labourers such as the applicant, he was also able to identify Mr Kwok who had been operating the mobile crane without a signaller at the yard. Upon checking the employee list produced by Mr Lee who at first claimed the list was a complete list of the yard’s employees of the respondent, he admitted in cross-examination the list was incomplete, and there were one or two employees’ names missing from the list. Records of payment of wages to casual labourers were shown to be inconclusive and incomplete. Based on the above, I am not satisfied on a balance of probabilities that the respondent did sublet the yard to three tenants who were in competition with the respondent in the container storage business. The company names given by Mr Lee were not registered businesses in Hong Kong. There were no written tenancy agreements or rent receipts produced. Furthermore, clause 8 of the respondent’s headlease with the landlord specified subletting of any part of the premises of the container yard without the landlord’s consent was not allowed. As no consent document for the ‘alleged’ subletting had been exhibited, produced or disclosed in the action, and according to Mr Lee, no such documents existed, based on all the above, one has to conclude that the respondent was not able to show the applicant, Rana, was an employee of one of its alleged sub‑tenant, Hang Tung, at the time of the accident or of the other two ‘sub-tenants’.

28.  Mr Lee admitted the applicant had gone to the respondent’s office at the container yard and demanded sick leave pay after he was discharged from the hospital. Mr Lee admitted he was in crutches when he appeared at the respondent’s office. Though Mr Lee denied it was the respondent who paid the applicant sick leave pay of $6,000 in January 2007 and a second $6,000 in February 2008, he admitted to have helped Rana at the time when he visited the respondent’s office to connect with and talk to Mr Lam. The question is why would Mr Lee help Rana to get the sick leave pay if the respondent was not his employer? Why if he had no knowledge of the accident would he acknowledge Rana’s needs at the time of his visits? The irresistible inference after looking at all the evidence and circumstantial evidence, Mr Lee obviously knew exactly what Rana was asking for in those two visits and he knew and did acknowledge Rana’s entitlement to sick leave pay.

29.  Rana’s evidence on the daily operation and the work at the respondent’s container yard are clearly indicative that the respondent was his employer. In coming to this conclusion, I have adopted the Court of Final Appeal’s dicta in the case of Poon Chau Nam v Yim Siu Cheung FACV 14 of 2006 and the Privy Council’s decision in Lee Ting Sang v Chung Chi Keung [1990] 2 WLR 1173 where the court examined the fundamental test to apply in determining whether a person was engaged in business on his own account, therefore with a contract for services or was he engaged as an employee on a contract of services. In the Court of Final Appeal case of Poon Chau Nam, Permanent Judge Ribeiro held:

“No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases.  The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.”

In the Poon Chau Nam case, the CFA referred to the Privy Council decision in Lee Ting Sang v Chung Chi Keung.  And at paragraph 18 of Permanent Judge Ribeiro’s judgment in the CFA, he said:

“The modern approach to the question of 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.”

Applying the test adopted by and endorsed by the Court of Final Appeal in Hong Kong, I find the applicant, Rana, was an employee of the respondent at the time of the accident.

Quantum

30.  The parties have agreed the quantum in this case at $36,024.90. The sum included the following compensations:

section 9	$17,280
section 10	$24,720
section 10A	$2,200
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	$44,200
less advance payment of	$12,000
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	$32,200
add interests to date up to 13 November 2009 at	$3,804.90
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total	$36,024.90

Costs

31.  Costs should follow the event and therefore should be borne by the respondent, to be taxed if not agreed. Applicant’s own costs to be taxed in accordance with Legal Aid Regulations.