SINGH BALWINDER v. SINO PHIL ENGINEERING SERVICES LTD AND ANOTHER

DCEC 374/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO.374 OF 2003

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J U D G M E N T

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Introduction

1. The Applicant was a construction site worker.  He was allegedly injured in the course of his employment with the 1^st Respondent when he was working in the construction site of which the 2^nd Respondent was the main contractor. 

2. The 1^st Respondent has no dispute that it employed the Applicant at the material time.  It says however that the alleged accident has never happened and alternatively, that the injuries suffered by the Applicant was not serious.   

3. Apart from relying also on the above defences, the 2^nd Respondent says further that the Applicant was not an employee of the 1^st Respondent.

4. The 1^st Respondent was acting in person at trial represented by its director Mr. De Souza (“DS”).  At the material times DS and his wife controlled a number of companies including, inter alia, the 1^st Respondent, Geotechnical Engineering Services Ltd (“Geotechnical”) and Jaytey Engineering Ltd (“Jaytey”).  The 1^st Respondent’s name was used for signing the sub-contracting agreement with the 2^nd Respondent for the subject project.  Under the agreement the 1^st Respondent was to supply manual labours to work at the Tung Chung MTR Station construction site (“the site”).

5.   The 2^nd Respondent says the Applicant was probably the employee of Geotechnical or Jaytey or even DS himself rather than the 1^st Respondent.

6. According to the Applicant, he worked as a general labourer at the site on 15/5/2001.  When he was working inside a multi-storey residential building which was then under construction within the site, a piece of concrete fell from a hole on the ceiling and hit his left hand that caused his left ring finger seriously injured.

7. Under the Certificate of Review of Assessment issued on 21/5/2003 (“the Form 9”), the injury was described as “left hand injury resulting in left ring finger pain, weakness and stiffness”.  The loss of earning capacity permanently caused by the injury (“loss of earning capacity”) was assessed as 2.5%.    The periods of absence from duty necessary as a result of the injury stated on the Form 9 were from 15/5/2001 to 6/5/2003.  The Applicant appealed under Section 18 of the Employees’ Compensation Ordinance Cap. 282 (“the Ordinance”), asking this court to reassess his loss of earning capacity.

Evidence

The accident

8. The Applicant gave evidence that on the day in question he worked on the 30^th floor of a building at the site, his duty was to convey the construction debris and rubbish there to the ground level.  There was another worker called “Ah Chung” working together with him.  At around 4:00 p.m., a piece of concrete suddenly fell from above and struck his left hand.  He told the Nepalese foreman called ‘Ram’ or ‘Rai’ about the accident. This Nepalese foreman went with him to the site office and put cotton and bandage on his finger in the presence of a Korean site manager whose name he is not sure.  He was then told to go to the hospital and he went to the Prince of Wales Hospital by bus. 

9. The Applicant was cross-examined extensivelyon the details of how the alleged accident happened.  He was asked about, for example, the size of the concrete, his exact position when he was hit, the time when he first noticed the concrete, and what part of his body was being hit.  Suffice it to say is that, although there are discrepancies in some area (e.g. the size of the concrete) between what was stated in the Applicant’s witness statements and his oral testimonies in describing the accident, the discrepancies are not so significant that can render his evidence unreliable in itself.  Given the fact that the alleged accident happened in split seconds, the difficulty in giving details is understandable.  As regard how the accident was happened, the Applicant’s evidence is consistent on the whole.

10. There is an issue as to whether the Applicant had attended the site at all on the relevant day.  DS relied on some hand written records prepared by the 1^st Respondent’s foreman to suggest that the Applicant was on sick leave that day.  However, these records are contradicted by the computer records produced by the 2^nd Respondent showing that the Applicant had entered the site in the morning and left early at around 4:37 p.m. in the afternoon.  This is consistent with the Applicant’s evidence that he was told to go to the hospital at around that time.

11. For these 2 sets of records, I prefer the records produced by the 2^nd Respondent as the accurate ones.  As submitted by Mr. Brettell, solicitor representing the Applicant, the 1^st Respondent’s records are incomplete and could not have been used by the 1^st Respondent as the basis of calculation of the Applicant’s working days when submitting the charges to the 2^nd Respondent.  On the other hand, the records of the 2^nd Respondent were kept under a managed system and there is no reason to doubt their accuracy. 

12. It can be seen from the Attendance Record of the A & E Department of Prince of Wales Hospital that the Applicant arrived at the hospital at 6:29 p.m. on the alleged date of injury.  This is, in my view, to a large extent consistent with the account given by the Applicant. 

13. There was a safety supervisor in the name of Rai Ram Kumar working at the Site (“Rai”).  DS in his evidence suggested that this person had not begun working at the Site on the day in question.  The 2^nd Respondent also put in documents from the Inland Revenue Department to show that he had only started working for them after the accident.  However, neither of the Respondents asked Rai to testify or make any witness statements to the court to prove the same.  On the other hand, Mr. Szeto Wing Hing (“Szeto”), an employee of the 2^nd Respondent, testified in court that Rai had started working at the Site in the end of 2000 before the date of the alleged accident.

14. DS in his affirmation filed on 28/9/2004 stated that the Applicant told him that on the day in question the Applicant had reported the accident to Rai.  He then contacted Rai by telephone and he was told that the reports of the accident were handed to the safety department of the 2^nd Respondent.  DS said in court that he had asked Rai about the accident and Rai was aware of it.

15. I appreciate the fact that Rai or Ram is a name very common in Rai’s origin.  However, the fact that DS made enquiry to Rai reflects that DS understood Rai as the one to whom the Applicant had reported about the accident on the day in question.     Further, if the Applicant had not told Rai about the accident on that day, DS would have learnt about this from him and would therefore not have conceded liability in the first place.  I find as a fact that the Applicant did report to Rai of the accident on 15/5/2001. 

16. I have no hesitation in concluding that the Applicant did work at the Site on the day in question.

17. There is also an issue as to whether the alleged accident happened as described by the Applicant or at all.

18. It is submitted by the Respondents that there were no written records of the accident and it was not made known to the 2^nd Respondent about the accident until a very late stage.  It is also submitted that the evidence given by the Applicant is not reliable and his account of how the accident happened is improbable.

19. DS and Mr. Lui Ting Kwan (“Lui”), a foreman of the site, gave evidence that there could not be holes on the ceilingsof the buildings under construction for debris or concretes to fall through.  On the other hand, a chute was built outside and attached to the building for the purpose of transferring debris to the ground level.  According to Lui, the construction work of the block where the Applicant was working (Block 6) had been finished and there should not be any “mivan holes” existed.   However, both of them could not give direct evidence as to whether there was actually a hole as described on the ceiling.

20. The Applicant said not every floor of the building has access to the chute. Workers had to transfer the debris to the floors having access to the chute first before using it to dispose of the debris. 

21.  In the “Minutes of the Site Safety Committee” produced by the 2^nd Respondent, it was recorded that “many floor openings were found in the floor slabs” and the relevant contractor was warned to rectify floor opening violation at upper level of Tower 6 in the material times.

22. Szeto agreed that the “floor openings” mentioned in the minutes should be something different from the “mivan holes”.

23. Looking at the Attendance Record of the A & E Department of Prince of Wales Hospital again, the medical findings of the treating doctor on the Applicant were: “(1) Tender over lower back and left shoulder, (2) Tender over left middle finger, (3) Tender swelling and bruise around tip of left ring finger with slight decrease ring finger movement and (4) X-ray of left hand was normal.”  It was also recorded that the Applicant was injured by a “falling stone”.

24.  In reliance on the above medical findings, it is unquestionable that the Applicant did suffer from injuries on his left ring finger on the very day.  With my findings that the Applicant did work at the site and tell Rai about an accident, I have no difficulty in concluding that the Applicant had probably injured his finger when he was working at the site.

25. The suggestion that there was a hole on the ceiling allowing a piece of concrete to fall through is in itself unusual.  However, given the fact that the Applicant was injured while he was working at the site, it would be unlikely that he would lie about the existence of the hole.  It would be apparent to him that his employer or whoever liable to compensate him, who was well aware of the conditions of the buildings, would raise serious queries about the existence of the hole and hence the cause of his injuries.  If there was no hole on the ceiling, he could have come up with another story conveniently without referring to any such hole.

26. Furthermore, the contemporaneous account given by the Applicant to the Hospital that he was “injured by a falling stone” is also consistent with his evidence.

27. Mr. Sadhwani, counsel for the 2^nd Respondent, helpfully summarized in his final submission some aspects of the Applicant’s evidence that were said to have rendered his version of facts unbelievable.  Mr. Sadhwani’s complaints about the Applicant’s evidence include: the inconsistencies as to the details of how the accident happened, the fact that DS had written a letter stating that the Applicant was taken by a white car to the hospital, the Applicant described his finger as “broken” in a letter which did not accord with the medical evidence, the content of a written statement of the Applicant recorded by an officer of the insurance company (“the Toplis Statement”), some minor discrepancies in relation to the medical notes and sick leave certificates describing the Applicant’s injuries and the amendment of the “notification of accident form” to the Labour Department of the name of the employer.

28. The Applicant is certainly not a witness giving perfect evidence.  However, given the fact that the accident happened in 2001, he should not be expected to give a perfect account of exactly how the accident happened, particularly as to details like the size of the falling concrete and his exact position when he was hit.  After the accident, the Applicant had to report the matter throughout the years to various people representing different interests, for instance, Rai, the Labour Department, the officer(s) of the insurance company, numerous medical officers or experts, legal practitioners, and even DS.  Given the background of the Applicant, it is not to be surprised that discrepancies might have happened due to misunderstandings.  Furthermore, people could have made mistakes in receiving and recording information.

29. My view is that, as analysed in paragraphs 8 to 25 hereinabove, the Applicant had probably suffered injuries on his left hand when he was at the site on the day in question, and it is improbable that he would make up a story by inventing a hole on the ceiling, the imperfection of the Applicant’s evidence could not be sufficient to render it unbelievable.

30. Bearing in mind that there is no direct evidence to contradict the Applicant’s evidence as to how the accident happened, I accept the version of facts in relation thereto and conclude that he was injured at the site in the course and arising out of his employment on 19/5/2001.      

31. Mr. Sadhwani also suggested that the injury to the Applicant’s left ring finger might have been a pre-existing one.  With respect, I would dismiss this suggestion as a mere speculation for having no concrete evidence in support.    

32. It is also improbable that the fracture of the left ring finger happened after the accident in view of the expert opinion of Dr. Jack Wong that gained also the support of the joint medical expert Dr. Arthur Chiang.

The employer

33. It is common ground that there was a subcontracting agreement between the 1^st and 2^nd Respondents for supply of manual labour for the project at the site.  There was no other contract between any other DS’s companies including DS himself and the 2^nd Respondent in respect of the site.

34. DS himself admitted that the 1^st Respondent was the employer of the Applicant on the date of the accident.  The 2^nd Respondent issued a working permit to the Applicant to work at the site naming the 1^st Respondent as the contractor employing the Applicant.  

35. It is submitted by Mr. Sadhwani that all along the Applicant treated DS personally as his employer and DS had not been named as a director of the 1^st Respondent until after the accident.  He submitted also that the 1^st Respondent was not operational in that it had no insurance and MPF scheme for the employees.  On the other hand, Geotechnical and Jaytey were companies in operation having insurance policy for their employees.    

36. Furthermore, the 1^st Respondent’s name was deleted and replaced by that of Geotechnical on the “Notification of Accident” submitted to the Labour Department.  There was also a document titled “Casual Worker Employment Contract” signed between Geotechnical and the Applicant.  In a form titled “Notice by Employer of the Death of an Employee or of an Accident to an Employee resulting in Death or Incapacity” submitted to the Labour Department in September 2001 and signed by Geotechnical, the name of the insurance company of Geotechnical (“Ming An Insurance Company Hong Kong Limited”) was provided as the insurer in relation to the accident.  There are 3 copies of cheques made out to the Applicant by Geotechnical for periodical payments in August 2002 and April 2003.

37. As regard Jaytey, according to the Applicant’s tax return, Jaytey was his employer at least until 31/3/2001.  In a letter dated 15/3/2002 from Jaytey addressed to “To Whom It May Concern”, it was certified that the Applicant was working with Jaytey from 1/4/2001 until the date of the letter.  There was another similar letter signed by a different person produced by the Applicant at trial.  Between 18/7/2001 and 20/11/2001, 3 cheques of Jaytey were issued to the Applicant. 

38. Mr. Sadhwani submitted further that even if this court takes the view that the Applicant was working for the 1^st Respondent at the time, as it was not operational, the possibility arises that the Applicant was lent or let on hire by either Geotechnical and/or Jaytey and/or DS and the 1^st Respondent would not be liable as it would then not be an employer within the definition of the Ordinance.

39. Mr. Sadhwani’s submissions are on the face of it attractive.  I have also without doubt that the Applicant all along did not care about the identity of his employer provided that he has works to do and wages to earn.  Albeit very well framed, Mr. Sadhwani’s arguments could not really answer the very question that none of the possible employers except the 1^st Respondent had the right to provide workers to the site.  They were simply not parties to the subcontract with the 2^nd Respondent. 

40. It is beyond dispute that DS had the control of the 3 relevant companies.  If the 1^st Respondent was chosen to be the party to the subcontract, there was no reason why DS would take the trouble to employ labourers by the other companies.  If insurance or MPF were issues, DS could simply use either Geotechnical or Jaytey to sign the subcontract instead of the 1^st Respondent.

41. My view is that, the arrangement between the Applicant and DS and his group of companies was that the Applicant would be employed by the company or person who had subcontracted a particular project to work at the site of that project.  The fact that the Applicant was employed by one of the companies at a particular time for a particular project does not bar him from being employed by another company at another time for another project.

42. For the confusion that the name of Geotechnical was given as the employer to the Labour Department, I accept the evidence of DS that it was a mistake but I believe that the mistake was also a deliberate one caused by the fact that there was no insurance policy covering the 1^st Respondent.

43. I accept the evidence of the Applicant that the letters certifying his employment with Jaytey were for the purpose of visa application and they can have no bearing on who was the employer of the Applicant at the material times for his work at the site.

44. Since all the 3 companies were controlled and beneficially owned by DS and/or his wife, the fact that part of the periodical payments were settled by a particular company does not help much in determining the true employer.

45. There is simply no evidence to prove that the Applicant was hired or let to the 1^st Respondent as suggested by Mr. Sadhwani.  I can see no reason why DS should have taken such trouble.

46. In the premises, I find that the Applicant was employed by the 1^st Respondent at the time he was injured and the 1^st Respondent and the 2^nd Respondent were liable to pay him compensation under and in accordance with the Ordinance.

Quantum

47. The Applicant claims under Section 9, 10 and 10A of   the Ordinance.  It is agreed that the Applicant has received a total sum of HK$212,780.00 as periodical payments.

Monthly earnings

48. It is not in dispute that the Applicant earned a basic wage of HK$400 per day.  As for the subject project, he commenced working from 2/5/2001 and stopped since after the accident.  From what it shows on the 1^st Respondent’s wage roll, the Applicant received the amount of HK$6,437.50 for the 12 days’ work including one overtime day. 

49. The said wage roll also shows that 23 out of the 33 workers (including the Applicant) worked more than 20 days in the month of May 2001.  Excluding the overtime days, the average number of working days for these 23 workers is approximately 24.  The average number of overtime days is approximately 2.5.  Adopting these figures for calculation of the Applicant’s monthly earnings, taking HK$600 as the overtime wage per day, the amount would be HK$400 x 24 + HK$600 x 2.5 = HK$11,000.00.

Loss of earning capacity

50. The Applicant suffered blunt trauma injury to the end phalange of his left ring finger.  He received conservative treatment at the A & E Department.  On 22/6/2001 a malunited mallet fracture of the finger was shown on scan.  An operation to excise dorsal osteophytes was performed on 5/8/2002.  The X-ray on 11/11/2002 showed mild deformity of end phalanx and mild to moderate degenerative change at DIP joint.

51. The Applicant still complains of pain on the left index finger upon exertion.  It is his evidence that he could no longer perform the kind of heavy works that was required under his original employment.

52. Dr. Arthur Chiang opined that the Applicant should be able to return to his former employment whilst Dr. Jack Wong had the view that he will not be able to perform as a construction site worker in full capacity.  Dr. Wong agreed that the limitation of the Applicant’s ability to perform heavy work is due to his pain suffered at the left index finger and this is very subjective.

53.  By way of subpoena, DS called one Mr. Luk Koon Tin (“Luk”) who was the last employer of the Applicant carrying on a recycling business.  Luk gave an account of the nature of work that the Applicant was required to perform in his company.  According to Luk, the duties of the Applicant had no difference from the other workers except that he was not required to operate the machines.  From time to time the Applicant was required to lift heavy objects and to pull heavy cables.  He noticed no problem of the Applicant performing this kind of heavy duties.

54. Luk’s evidence was different from that of the Applicant.  However, I can see no reason to doubt Luk’s evidence as he has no interest whatsoever in the present litigation.  Although there was another employees’ compensation claim against Luk’s company by the Applicant, the liability was covered by insurance and there was no purpose to serve for him to give false evidence in this court.  Furthermore, I was impressed by the prompt and straightforward way of Luk in answering questions that I find him a very credible witness.

55. Whether there exists pain is a very subjective matter and it depends much on the evidence of the Applicant.  In view of the evidence of Luk, I doubt very much that the Applicant could no longer be able to perform heavy lifting duties as alleged.  I prefer the evidence of Dr. Chiang that the Applicant has no difficulties in resuming to work as a construction worker.

56. In this light, I find the formula under the “Hong Kong Paper Mills” formula for calculation of loss of earning capacity not applicable.  

57. In the circumstances, considering the opinions of Dr. Chiang, Dr. Wong and the First Schedule of the Ordinance and regarding the Applicant’s injury as arthrodesis or fusion of the finger joint, I would adopt the assessment of the Assessment Board of 2.5% as a fair figure for the Applicant’s loss of earning capacity.  Hence, the appeal of the Applicant under Section 18 of the Ordinance is dismissed.

Compensations

58. Compensation under Section 9 would be HK$11,100 x 96 x 2.5%  = HK$26,640.00. 

59. For compensation under Section 10, in light of the deeming provision under Section 10(2) of the Ordinance and the opinions given by Dr. Chaing and Dr. Wong, the certified sick leave by the Assessment Board cannot be said to be unreasonable.  The amount awarded would therefore be HK$11,100/30 x 617 x 80% = HK$182,632.00. 

60. I accept that the medical expenses of the Applicant was HK$2,645.00 in total and I award the amount accordingly under Section 10A.

61. According to Section 10(4) of the Ordinance, no periodical or lump sum payments paid or payable under Section 10 shall be deducted from any amount of compensation payable under sections 6, 7, 8 or 9.

62. However, as the periodical payments have already exceeded the total amount awarded under Section 10 and 10A, the total sum to be awarded by this court should only be HK$26,640.00.

63. In the premises, I order that judgment be entered against the Respondent in favour of the Applicant in the amount of HK$26,640.00 and interest thereon at half judgment rate from 15/5/2001 to the date of handing down of this Judgment and thereafter at judgment rate until payment.

64. I make a cost order nisi as follows :-

(i)	costs of the Application of the Applicant be borne by the 1st and 2nd Respondents on common fund basis, to be taxed if not agreed;
(ii)	costs of the 1st and 2nd Respondents in respect of the Applicant’s appeal under Section 18 of the Ordinance be borne by the Applicant on party and party basis to be taxed if not agreed;
(iii)	no order as to cost between the 1st and 2nd Respondents.
(iv)	counsel’s participation is certified.
(v)	Applicant’s own costs be taxed in accordance with legal aid regulations

This order nisi shall be absolute upon expiry of 14 days from the date of handing down of the Judgment.