TU ZHIQIANG v. 合生公司(商號) AND ANOTHER

CACV 107/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 107 OF 2011

(ON APPEAL FROM DCEC 40/2010)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Cheung CJHC:

1.  On 13 January 2012, we dismissed the applicant’s appeal from the judgment of Deputy District Judge J Wong dated 27 May 2011, whereby the judge dismissed the applicant’s employees’ compensation proceedings with costs to the Employees Compensation Assistance Fund Board (“the Board”), the 2^nd respondent. We now give our reasons.

Facts

2.  The applicant is and was a resident on the Mainland.  On 15 January 2008, he visited Hong Kong under a two‑way permit.  He said he went to Wo Hop Shek in Fanling to look for jobs.  Through a certain Mr Wong, he was employed by the 1^st respondent as an interior renovation and general worker.  He was asked to carry out renovation work to a hut in Wo Hop Shek Village. Whilst he was working there on 19 January 2008, he suffered injury to his left eye.  He received treatment in hospital for his eye injury.

3.  On 25 January 2008, the applicant went to the police and reported the matter.  Later, he was charged with breach of condition of stay.  He was convicted and sentenced to imprisonment for 6 weeks.  After serving his sentence, he was repatriated to the Mainland.  He later returned to Hong Kong to seek employees’ compensation in respect of his injury.

4.  He obtained legal aid but despite efforts by the Legal Aid Department and by his lawyers, and despite efforts by the police, the (alleged) employer could not be located.  Nor could Mr Wong be found.  In those circumstances, the applicant commenced two sets of proceedings in the District Court.  In DCMP 127/2010 (“the MP proceedings”), the applicant by an originating summons dated 15 January 2010 sought leave to issue proceedings against the Board directly for employees’ compensation pursuant to section 25 of the Employees Compensation Assistance Ordinance (Cap 365) (“the Ordinance”) on the ground that the employer could not be identified, or, if identified, could not be found.  The applicant sought to claim employees’ compensation directly from the Board as if it were the employer.

5.  Secondly, on 18 January 2010, the applicant commenced the employees’ compensation proceedings below (DCEC 40/2010) (“the EC proceedings”) against the alleged employer as respondent.

6.  The Board considered that to allow the two sets of proceedings to run in parallel would obviously be “a waste of costs and time”.  It therefore suggested to the applicant’s solicitors that in order to stop further costs from escalating, it would make an application to intervene and join as an additional respondent in the EC proceedings “in return for” the applicant’s agreement to stay the MP proceedings.  The applicant’s solicitors agreed to this proposal.  As a result, on 26 March 2010, the court ordered, by consent, under the MP proceedings, that all further proceedings be stayed until the determination of the application for employees’ compensation in the EC proceedings and that the parties were at liberty to restore the matter before the court within 21 days after the determination.

7.  On 30 April 2010, in the EC proceedings, the court ordered the joinder of the Board as an additional respondent, gave directions for the filing of pleadings and adjourned sine die with liberty to restore the applicant’s application for substituted service in relation to the 1^st respondent (the employer).

8.  On 25 June 2010, the restored application for substituted service was refused by the court.

9.  On 28 October 2010, by consent, the court gave further directions for the trial of the EC proceedings.

10.  The employees’ compensation claim came on for trial before the deputy judge on 14 March 2011.  Understandably, the 1^st respondent did not turn up for trial.  The applicant and the 2^nd respondent managed to agree quantum at the sum of $172,000.  However, the Board through counsel (Mr Horace Wong SC) asked the court to deal with a preliminary point.  The judge put it this way : the proceedings having not been served upon the 1^st respondent, could judgment be entered against it?  Did the 2^nd respondent join in the proceedings as if it were the employer, and as such, could it be held directly liable to the applicant?

11.  The judge heard arguments from the parties and decided to reserve his judgment on the preliminary point.  However, in view of the time left available (the hearing was set down for two days), he asked the parties to continue with the trial by dealing with the substantive merits of the claim.  He therefore heard evidence and arguments.  He also reserved his judgment on the substantive merits.

12.  As mentioned, on 27 May 2011, the judge handed down his judgment.  He ruled in favour of the Board in relation to both the preliminary point and the substantive merits.  He held that as the 1^st respondent had never been served, no judgment could be entered against it.  He further held that the Board only joined in the EC proceedings as an intervener, and as such, the Board could not be held directly liable to the applicant for payment of employees’ compensation.  On the substantive merits of the claim, the judge found that the applicant had failed to prove his case on the balance of probabilities.

13.  In any event, the judge indicated that even if a claim had been made out, he would not have been prepared to exercise his discretion under section 2(2) of the Employees’ Compensation Ordinance (Cap 282) (“the EC Ordinance”) to deal with the application as if the applicant had been a person working under a valid contract of employment.  (It was common ground at trial that the applicant’s alleged contract of employment with the 1^st respondent was illegal and invalid.)

14.  The judge therefore dismissed the application for compensation and awarded costs in favour of the Board.

This appeal

15.  In the appeal, Mr Arthur Yip, for the applicant, argued that the judge was wrong to deal with the preliminary point as if he were presiding over a trial on preliminary issues.  He submitted that if, as was the case, the proceedings had not been served on the 1^st respondent, they should not be considered as commenced and the court’s jurisdiction to adjudicate on the matter should not be invoked.  What the judge ought to have done was to refuse to proceed with the trial, adjourn the hearing and give further directions as to the conduct of the case.

16.  In any event, counsel argued, the judge was wrong in holding that the Board was simply an intervener in the EC proceedings who was not joined in “as if it were the employer”.  He relied on the actions taken by the parties in relation to the staying of the MP proceedings, the joining of the Board as the 2^nd respondent in the EC proceedings, the preparation of the case for trial, including discovery and exchange of witness statements, and the agreement on quantum, in support of his argument.

17.  In relation to the substantive merits, counsel argued that the judge was wrong on his findings of fact.

The Ordinance

18.  As the preamble to the Ordinance makes clear, the Ordinance is there to, amongst other things, provide for the protection of the entitlement of employees and others to compensation for employment-related injury; and for the making of relief payment to eligible persons in relation to damages for employment-related injury.  For those purposes, the Ordinance establishes the Board and a fund.

19.  Section 16 of the Ordinance provides that a person who is unable to recover from an employer payment of an amount of compensation for which the employer is liable may apply for payment of that amount from the Employees Compensation Assistant Fund vested in the Board.  This may happen where, for example, the employer is insolvent and, for one reason or another, his insurer does not or cannot pay up.

20.  However, section 25 provides for some specific scenarios :

“(1) This section applies to any claim against an employer for compensation where ‑

(a) the employer‑

(i) cannot be identified or, if identified, cannot be found;

(ii) is insolvent;

(iii) is dead or in the case of a company, has been dissolved, wound up or struck off the register; or

(iv) for any reason, cannot be served with proceedings; and

(b) no policy of insurance is known to be in force in relation to the employee.

(2) Subject to this section, proceedings for any claim against an employer to which this section applies may issue against the Board as if it were the employer.

(3) Proceedings against the Board under this section shall not issue unless the court is satisfied, on application made on notice to the Board, as to the matters specified in subsection (1)(a) and (b).

(4) Where proceedings are brought against the Board under this section, the rights and liabilities of the employer in respect of the compensation the subject of the proceedings are vested in and transferred to the Board.”

21.  Section 25A(a) of the Ordinance goes on to deal with the situation where the injured employee has already commenced a claim for compensation against the employer.  It allows the Board to intervene in the proceedings and “take over the defence as if it were the employer in the proceedings” :

“ If proceedings have been initiated to claim compensation or damages (whether initiated before, on or after the commencement of this section), the Board may apply to the court to be joined as a party to the proceedings as follows‑

(a) where no policy of insurance is known to be in force at the time of the accident to which the proceedings relate, the Board may apply to the court to join in the proceedings as a party in accordance with Order 15, rule 6 of the Rules of the High Court (Cap 4 sub leg A) or Order 15, rule 6 of the Rules of the District Court (Cap 336 sub leg H), as the case may require, to take over the defence as if it were the employer in the proceedings if‑

(i) the employer cannot be identified or, if identified, cannot be found;

(ii) the employer is insolvent;

(iii) the employer is dead or has been dissolved, wound up or struck off the register;

(iv) the employer, for any reason, cannot be served with the notice of proceedings; or

(v) at any time when the employer fails to attend the hearing, leaving the claim uncontested.”

22.  Section 25A also deals with two other types of situation where the Board may apply to join in simply as an intervener :

“(b) where no policy of insurance is known to be in force at the time of the accident to which the proceedings relate and the employer is present at the proceedings, the Board may apply to the court to join in the proceedings as a party in accordance with Order 15, rule 6 of the Rules of the High Court (Cap 4 sub leg A) or Order 15, rule 6 of the Rules of the District Court (Cap 336 sub leg H), as the case may require;

(c) where the insurer concerned is insolvent, the Board may apply to the court to join in the proceedings as a party in accordance with Order 15, rule 6 of the Rules of the High Court (Cap 4 sub leg A) or Order 15, rule 6 of the Rules of the District Court (Cap 336 sub leg H), as the case may require.”

The provisions cover different situations

23.  The legislative intent behind the provisions is reasonably clear.  Section 16 allows an applicant who has obtained an empty judgment for employees’ compensation to go after the Board for payment of his compensation : section 16(2)(a)(i). Apart from some exceptions irrelevant to the present case, without a judgment against the employer, no claim can be made under section 16 against the Board.

24.  However, where a case falls within any one or more of the scenarios described in section 25(1)(a)(i) to (iv) of the Ordinance and no policy of insurance is known to be in force in relation to the employee (section 25(1)(b)), the position becomes less straightforward.  Take section 25(1)(a)(i) and (iv) as examples, that is, where the employer cannot be identified or, if identified, cannot be found; or where, for any reason, the employer cannot be served with proceedings.  In any of those cases, unless substituted service is permitted by the court, the employee simply cannot obtain judgment against the employer, for want of service.

25.  Section 25 comes to the rescue by permitting, with the leave of the court, the employee to sue directly the Board “as if it were the employer” : section 25(2).  More importantly, section 25(4) provides that where the Board is so sued, the rights and liabilities of the employer in respect of the compensation the subject of the proceedings are vested in and transferred to the Board.

26.  In other words, section 25 provides an essential shortcut to an employee who otherwise would encounter great difficulties in serving the proceedings on his employer and, for that reason, in obtaining judgment against him.  Where it applies, section 25 provides an alternative to the section 16 procedure.

27.  Section 25A caters for a different case, that is, where the employee has chosen to sue the employer.  In a normal case, one can expect the employer or, in most cases, his insurer to take up the defence of the proceedings.  If the employee manages to obtain judgment against the employer, and if the judgment is not satisfied by the employer or his insurer, the employee may go after the Board for payment pursuant to section 16.  However, if for one reason or another, neither the employer nor the insurer defends the proceedings, and the employee is permitted to enter judgment against the employer in those circumstances and subsequently seeks payment of the judgment sum against the Board pursuant to section 16, that will work injustice to the Board.

28.  Section 25A comes into play and allows the Board to join in and contest the proceedings.  If the employee still succeeds in obtaining judgment against the employer, and if the judgment remains not satisfied, he can then seek payment of the judgment sum against the Board pursuant to section 16.

29.  Section 25A provides for three types of situation where the Board may apply to join in, that is, the respective situations set out in subsections (a) to (c).  Subsections (a) and (b) deal with the position where there is no policy of insurance; whereas subsection (c) deals with one where there is an insurance policy.

30.  Where there is no insurance policy, and where the employer is “present” at the proceedings, the Board may apply to join in the proceedings as an intervener pursuant to section 25A(b). The rationale is that in the situation described, the employer may or may not see fit to contest the proceedings, and he may or may not find it necessary or be in a position to retain a lawyer to defend the claim.  Depending on the facts, therefore, the Board may find it prudent to join in as an intervener to contest the employee’s claim, so as to protect its own ultimate interest.

31.  What if the employer is not “present” at the proceedings?  This is covered by subsection (a).  Subsection (a) refers to five different scenarios, (i) to (v).  It may be noted that (i) to (iv) are identical to the four scenarios described in section 25(1)(a).  Under those scenarios, assuming that the employer has been served successfully or there has been obtained an order for substituted service, if the Board does not join in, the employee will, in the normal course of events, have no or little difficulty in obtaining judgment against the absent employer, to the ultimate detriment of the Board.

32.  Likewise, in scenario (v), that is, “at any time when the employer fails to attend the hearing, leaving the claim uncontested”, the position of the Board is jeopardised.

33.  Therefore it is natural to find that section 25A(a) provides that under those five scenarios, the Board may apply to join in the proceedings as a party “to take over the defence as if it were the employer in the proceedings”.

34.  To complete the picture, section 25A(c) deals with the situation where there is a policy of insurance.  Normally, in such a case, the Board will have no reason to intervene.  The insurer will take care of the proceedings.  However, where the insurer is insolvent, which is the situation dealt with by section 25A(c), the proceedings will be left uncontested, if the employer does not defend them. Therefore, depending on the facts, the Board may wish to join in to contest the claim.  Section 25A(c) allows the Board to do so.

“Present” at the proceedings

35.  Pausing here, two general points may be made.  First, the word “present” used in section 25A(b) clearly does not extend to cover the case where an employer has been named in the proceedings as a respondent but has not yet been successfully served.  In this regard, I reject Mr Wong’s contrary argument, based on which he contended that the Board joined in the EC proceedings under subsection (b) rather than subsection (a) of section 25A, the significance of which will presently become apparent.

“Employer” includes alleged employer

36.  Secondly, when section 25A, like section 25, refers to the “employer”, it obviously includes an alleged employer, where the employment relationship alleged is disputed.  Mr Wong’s contrary construction in his written submission, which he very fairly dropped during oral argument, would have meant that the two sections do not apply to those cases, which there are many, where the alleged employment relationships are disputed.  This cannot be right.

Section 25A(a): position of employer without joinder

37.  Focusing on section 25A(a), which concerns the present case, several points of importance should be noted.  First, if the case falls within section 25A(a), but the employee never manages to serve the proceedings on the employer (or his estate etc) or to obtain an order for substituted service, no judgment whatsoever can be entered against the employer despite his absence at the proceedings, leaving them uncontested.  That is simply trite civil procedure.

Section 25A(a): taking over the defence as if it were the employer

38.  Secondly, however, if the Board chooses to join in the proceedings as a party in those circumstances to “take over the defence as if it were the employer in the proceedings”, then the employer may be taken to have entered an appearance to defend the proceedings by reason of the actions taken by the Board, who has, by definition, taken over the defence as if it were the employer.  In that event, the employee will be quite entitled to enter judgment against the employer if he can prove his case.

39.  In this regard, the taking over of the defence as if the Board were the employer in the proceedings must mean something over and above what a normal intervener would do (that is, contesting the claim).  The taking over of the defence must mean the taking over of the defence from the employer, similar (but not entirely identical) to the situation where an insurer takes over from the insured the defence of a claim made against the insured.  In that latter case, it would no longer be open to the insured to argue that it has not entered an appearance in the proceedings and no judgment can be obtained against him.  A normal intervener, on the other hand, does not “take over” anybody’s defence.  He just joins in to contest the claim in whatever way that suits his interest.  The taking over of a defence obviously means something more than that.

40.  By way of contrast, section 25A(b) and (c) do not refer to the Board “taking over the defence as if it were the employer”.  There is no need to so provide because these two subsections are not concerned with the case where the employer cannot be served (either directly or indirectly by substituted service on an insurer even where the insurer is insolvent).

41.  The contrary construction would mean that in a case falling within section 25A(a), no judgment could be entered against the employer even if, despite the defence mounted by the Board, the employee established his case on the merits.  In that event, the construction would mean that he would have to start all over again and bring proceedings against the Board directly under section 25, assuming that he was still within time (the limitation period of 24 months provided under section 14(1) of the EC Ordinance would apply to a claim under section 25 of the Ordinance because of the transfer of the rights of the employer to the Board pursuant to section 25(4)).  This does not appear to be the true intention of the legislature.

42.  Rather, in my view, the intended result of section 25A(a) must be that in the situation under discussion, the successful employee should be entitled to enter judgment against the employer and, armed with that judgment, he may seek payment of the judgment sum from the Board pursuant to section 16.  In this way, section 25A(a) achieves for an employee, indirectly, what he may achieve under section 25 (assuming his case falls within situations (i) to (iv), rather than situation (v)), without causing injustice to the Board.

43.  Of course, it is always open to the Board not to join in the proceedings in a case falling within section 25A(a) (“the Board may apply to be joined …”).  However, if the case is one falling within section 25A(a)(v), the employee may simply proceed with the claim against the absent employer, prove his case and obtain judgment, which may then be enforced against the Board under section 16.  

44.  On the other hand, where the case is one falling within section 25A(a)(i) to (iv), if the Board does not join in, and if the proceedings cannot be served directly on the employer and no order for substituted service is obtained, no judgment can be entered against the employer and the Board is not at risk under section 16. 

45.  However, first, the employee can always turn round (so long as it is done within the limitation period) and sue the Board directly under section 25.  Secondly, if the Board does not join in but somehow the employer manages to effect service by means of an order for substituted service or otherwise and proceeds with the proceedings accordingly, he may be able to obtain judgment against the (absent) employer, which may then be enforced against the Board under section 16. 

46.  These risks and uncertainties are removed if the Board chooses to join in the proceedings under section 25A(a).  The price to pay is that once the Board has joined in and taken over the defence of the employer as if it were the employer, it is not open to the Board to say that no judgment can be entered against the employer for want of service.  In my view, this is a fair price to pay and accords well with the intent and purpose of the legislation set out in the preamble.

47.  No specific rules have been made to guide the Board on how it is to “take over the defence as if it were the employer” after the joinder.  In my view, what matters is substance, not form. Whether the proceedings are thereafter defended in the name of the employer or in the Board’s own name should not really matter.  As a matter of law by reason of section 25A(a), the defence has been taken over by the Board as if it were the employer.

Section 25A(a): no judgment against the Board

48.  Thirdly, this does not, however, mean that the employee can enter judgment directly against the Board simply on the ground that the Board has taken over the defence “as if it were the employer in the proceedings”.  In this regard, although the same phase “as if it were the employer” is used in section 25A(a) as it is used in section 25(2), the context is entirely different.

49.  In section 25(2), with the leave of the court, the employee may issue proceedings “against the Board as if it were the employer”.  One is concerned with the commencement of proceedings against the Board as a respondent/defendant.  In section 25A(a), however, one is only concerned with a joinder by the Board as a party to an existing set of proceedings against the employer “to take over the defence as if it were the employer in the proceedings”.  The emphasis is on the taking over the defence of the employer, similar to the situation where an insurer takes over the defence of the insured in a claim.  Whatever judgment that the employee may be able to obtain, it will be a judgment against the employer, rather than against the Board even though it has, by definition, taken over the defence from the employer.

50.  This is made abundantly clear by the presence of the provision in subsection (4) of section 25 and its corresponding absence in section 25A(a).  It may be remembered that under section 25(4), where proceedings are brought against the Board under that section, the rights and liabilities of the employer in respect of the compensation claimed “are vested in and transferred to the Board”.  That is the basis for entering judgment against the Board in a section 25 claim.  

51.  No such provision can be found in section 25A(a).  That reinforces my point that under section 25A(a) where the Board has taken over the defence as if it were the employer in the proceedings, no judgment may be entered against the Board as such.  Any judgment would be entered against the employer.

Is section 25A exhaustive?

52.  This brings me to Mr Wong’s argument that section 25A is not exhaustive in providing for the situations where the Board may join in as a party.  The significance of this argument lies thus : if a joinder has been done under section 25A(a), then as analyzed above, the Board has joined in “to take over the defence as if it were the employer in the proceedings”.  Judgment may then be entered against the employer (if the defence fails), and ultimately it may be enforceable against the Board under section 16.  If the employer has already been successfully served or an order for substituted service has been obtained, this does not make any difference to the Board’s position. Where, as here, the employer has not been served and no order for substituted service has been obtained, the taking over of the defence, as explained above, will have the effect of exposing the employer to the risk of having a judgment entered against him despite the non‑service.  And such a judgment will be enforceable against the Board under section 16.

53.  Therefore, Mr Wong wanted to argue that there can be a type of joinder outside of section 25A even though the case falls within one or more of the scenarios covered by section 25A(a), whereby the Board simply joins in as an intervener, without taking over the defence of the employer.  Such a joinder will not be covered by section 25A, but by general law.  In other words, section 25A is not exhaustive.

54.  I do not think this is an advantage that the Board is entitled to take.

55.  In my view, section 25A is a specific and exhaustive section dealing with all the cases where the Board may wish to join in a set of proceedings for employees’ compensation (or for damages for employment-related injury – which does not concern us here) as a party.  The situations covered by section 25A, as explained above, are exhaustive in nature.  Mr Wong, who contended otherwise at the hearing, was unable to point out to the court any normal situation where the Board may wish to join in, which is not already covered by the situations mentioned in section 25A.  Mr Wong pointed out, quite correctly, that section 25A(a) gives the Board the power “to take over the defence as if it were the employer in the proceedings”, something which the Board may not be entitled to do under the ordinary provisions for joinder in Order 15, rule 6 of the Rules of the District Court (Cap 336H).  However, the inclusion of subsections (b) and (c) in section 25A, which deal with situations already covered by the existing joinder provisions in Order 15, rule 6, tends to neutralize Mr Wong’s point.

56.  Given the very fact that one finds a whole section dealing in an exhaustive and elaborate manner the situations where the Board may apply to join in, and also as a matter of giving the provisions a purposive interpretation, it would be a very odd conclusion that section 25A is, after all, not meant to be exhaustive.

57.  Mr Wong argued that when a case is first commenced, the Board may or may not be sure that the case would fall within, for the purposes of the present argument, section 25A(a), and yet the Board may for one reason or another want to join in so as to safeguard its position (without taking over the defence as if it were the employer).  The court should have a power, outside of section 25A, to allow the Board to do so.

58.  In my view, when construing section 25A, one must primarily bear in mind the normal situations.  In this regard, one must also note section 25B, which has been introduced to the Ordinance by way of an amendment in 2002 together with section 25A.  Section 25B(1) requires an employee, within 30 days after the commencement of proceedings, to serve a notice of the proceedings on the Board as well as the insurer (where there is one).  Subsection (3) requires the employee to give the Board a 10‑day notice if he intends to enter judgment (by default or otherwise) against the employer within 45 days after the service of the notice of proceedings.  Subsection (7) imposes a duty on the Board to carry out such inquiries as it considers necessary to facilitate the proper carrying out of the functions of the Board in relation to the claim to which the notice relates.  Subsection (8) provides that for the purpose of carrying out inquiries, the Board may require the employer or the employee or his family member, the employer’s insurer or any other employee of the employer to furnish such information or particulars relating to the claim; and it may also make such inquiries from any other person connected or associated with the claim, as the Board considers necessary.

59.  In those circumstances, the chances of the Board not knowing whether a case falls within section 25A(a) are really slim.  On a proper interpretation of the provisions, it is therefore difficult to see why the elaborate provisions contained in section 25A are not meant to be exhaustive.

60.  Stepping back and looking at the scheme provided under the Ordinance as a whole (particularly the provisions in sections 16, 25, 25A and 25B), one can clearly see that the legislature never intends the position of the employee to be left in limbo.  The clear intention is that he may either go under section 25 where he can obtain directly a judgment against the Board; or, he can simply sue the employer as in other normal cases and leave the Board to decide whether to join in pursuant to section 25A(a) – and if it does, the employee may, despite his inability to serve the proceedings on the employer or to obtain an order for substituted service, enter judgment against the absent employer (if he can overcome the Board’s defence), and then make use of section 16 to obtain payment against the Board.  I see no unfairness in that arrangement. Rather, I can see certainty as well as protection for everyone concerned.  This construction allows neither party (that is, the employee and the Board) to take unfair advantage of each other under the situations and scenarios covered by section 25 and section 25A(a).  In either case, the employee’s claim would depend, and depend only, on the substantive merits of his claim against his alleged employer, and in either case, it is open to him, if he can, to obtain judgment and get compensation – whether directly against the Board or indirectly against the employer and then against the Board via section 16.

Position in the present case

61.  Applying all this to the present case, it is plain that the Board joined in pursuant to subsection (a) of section 25A, rather than subsection (b) or any suggested residual discretion of the court under Order 15, rule 6 – as explained above, section 25A is in fact exhaustive in terms of the court’s jurisdiction for joinder.

62.  Moreover, it is equally plain, applying the above principles, that upon the Board’s joining in under section 25A(a), it takes over the defence as if it were the employer.  The question of whether the alleged employer can be served, or whether an order for substituted service can be obtained, loses its significance, because as a result of the Board’s taking over of the defence, the employer is to be regarded as having entered an appearance to defend the case and judgment may be entered against him if the employee can overcome the defence mounted by the Board.

63.  Therefore, notwithstanding the failure to obtain an order for substituted service against the alleged employer (the 1^st respondent), if the applicant could establish his case on the substantive merits at the trial below, judgment ought to have been granted in his favour against the absent employer (but, in no case, against the Board).

64.  For that reason, I turn to the substantive merits of the case which can be disposed of very quickly.

Substantive merits

65.  Mr Yip, for the applicant, challenged the judge’s findings of fact.  He argued that the judge had placed excessive reliance on the fact that the 1^st respondent could not be located and was not registered as a business.  He argued that the judge had also placed excessive reliance on the contemporaneous information that the applicant had given to the doctors and to the police, he failed to take any or sufficient account of the fact that the applicant was not a lawfully employable person at the material time and was trying to hide his employment from the doctors and police.  Counsel also argued that the judge placed excessive reliance on the inconsistencies in the applicant’s recollection of the number plate(s) of the vehicle(s) Mr Wong used to take him to the place of work and to hospital, without taking into account the circumstances that the applicant was a person of limited education, and that part of his recollection was based on what he saw when his eye was badly injured. Counsel also complained that the judge was wrong to reject as unconvincing the applicant’s version that he injured his eye when he used a sanding disc to try to cut an angle‑iron, when there was no expert evidence on the specifications and operation of the sanding machine that the applicant referred to.

66.  It is trite law that it is difficult to overturn a primary finding of fact on appeal.  Unless the appellate court is satisfied that the trial judge’s finding is “plainly wrong”, notwithstanding the advantages enjoyed by the trial judge who received the evidence at first hand, the court would defer to the trial judge’s conclusion even if in some doubt as to its correctness : Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336, para 42.

67.  On the facts, the judge was plainly right with his findings of fact.  The fact that there is no business registration of the alleged business of “合生” was just one piece of evidence available to the judge.  There were many other pieces of evidence.  On his own case, the applicant had never met any representatives of the 1^st respondent.  He did not even know whether the 1^st respondent existed or not and had never had any dealings with the 1^st respondent.  Mr Wong was the one and only one person whom he had dealt with regarding his alleged employment; yet there was nothing to show any connection at all between Mr Wong and the 1^st respondent, or that Mr Wong was in any way acting for the 1^st respondent in dealing with the applicant.

68.  Indeed the only connection between “合生” and the applicant was that allegedly after being retained by Mr Wong, he was taken by Mr Wong to go to a hut located somewhere in Wo Hop Shek Village to carry out work.  According to the evidence, the only reason why the applicant chose to name “合生” as his employer in the present proceedings was that he had noticed that there was an iron fencing outside the hut, and that on the fencing there was hung an old signboard with the Chinese characters “合生”.  According to the evidence, there used to be a “合生” stone factory operating on the piece of land in question.  But it had been closed down for over 30 years, and the hut had been abandoned since then.  According to the owner of the land (the Scout Association), it was not aware of the existence of the hut nor had it engaged any contractor to carry out renovation work to the hut.  In any event, I fail to see how, on those facts, the applicant could prove a case against “合生” as its employer.  The fact that he was taken by Mr Wong to the alleged premises of “合生” to carry out work there (together with Mr Wong) could hardly make “合生”, even if it did exist at the time, the employer of the applicant, just as a renovation worker taken by his employer (or fellow worker) to the premises of someone to carry out renovation work there would not suddenly become the employee of that latter person.  Nor would that alone be sufficient evidence to prove an employment relationship with that person.

69.  In my view, that must be the end of the applicant’s case insofar as the alleged employment with “合生” is concerned.

70.  As regards the various inconsistencies relating to how the accident happened and the name plate(s) of the car(s) in which Mr Wong drove the applicant to work and to hospital, as the Board submitted, the point here is not so much whether the applicant had a good reason to lie or not to remember the true facts, but rather the way he chose to lie and, his ability to “come up [with] story with details whenever it suited his interest or convenience”: (the first) paragraph 23(f)(iii) of the judgment below.  As for the story that he used a sanding device to try to cut an angle‑iron, it is not a matter of expert evidence (in any event it would be for the applicant to adduce such evidence), but rather a matter of commonsense and inherent probabilities.

71.  For all these reasons, the applicant’s challenge against the judge’s findings of fact is wholly hopeless.  It must be rejected.

Illegal employment

72.  This renders academic the argument on whether the judge was right in saying that in any event, if necessary, he would not have been prepared to exercise his discretion under section 2(2) of the EC Ordinance given that the (alleged) contract of employment was an illegal one.  All I would indicate is that I agree with the submission of Mr Wong.  On the facts of the present case, none of the policy considerations favoring the exercise of the discretion in favour of the injured employee indicated by this court in Yu Nongxian v Ng Ka Wing [2007] 4 HKLRD 159 applies, for the simple reason that the (alleged) employer cannot be identified, let alone located. 

73.  In any event, this being a matter of discretion for the trial judge, I can see no justification for interfering with the judge’s exercise of discretion.

Outcome

74.  Those were my reasons for dismissing the appeal with costs.  We also ordered that the applicant’s own costs be taxed in accordance with the Legal Aid (Scale of Fees) Regulations (Cap 91C).

Hon Kwan JA:

75.  I have had the benefit of reading in draft the Reasons for Judgment of the Chief Judge.  I agree with the reasons.

Hon Chu JA:

76.  I agree with the reasons given by the Chief Judge.