CHEUNG KA WING v. CHAK KAI HUNG t/a HUNG KEE IRON ENGINEERING CO ANS OTHERS

DCEC 1503/2019

[2021] HKDC 1016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 1503 OF 2019

________________

________________

___________________

JUDGMENT

___________________

1.  This is an Employees’ Compensation claim. Judgment on liability has already been entered against the 1^st and 2^nd Respondents by a court order dated 20 November 2020.

2.  The trial is for determination of the issue of liability against the 3^rd Respondent and quantum.

3.  The 3^rd Respondent is represented by its director, Mr. Wong Yam Man Alan (“Mr. Wong”), at trial.

Liability of the 3^rd Respondent

The Applicant’s case

4.  The Applicant’s case is that he was a metal worker employed by the 1^st Respondent to carry out the work of installing a set of square metal tubes underneath the 1^st floor ceiling (the “Work”) of a McDonald restaurant branch located at Shop 1, Ground Floor and 1^st Floor of Yiu Po Building, 37-47 Tai Wai Road (“the Premises”).

5.  The Work involved assembly of a two-level metal platform in order to reach the ceiling some 4.1M above the ground to install the metal tubes.

6.  The Work commenced on 17 July 2018 but on 19 July 2018, whilst the 2^nd level of the platform was being dismantled, the platform collapsed. The Applicant fell off and was injured.

7.  After the accident, the Applicant first attended a bone-setter who advised that he should attend hospital. The Applicant returned to the Premises and the 1^st Respondent drove him to the Accident and Emergency Department (“AED”) of United Christian Hospital.

8.  The AED medical report stated that on physical examination, there were abrasions and tenderness in both elbows and forearms with oedema and deformity over the left wrist. X-ray revealed a comminuted intra-articular fracture of left distal radius and fracture of the ulnar styloid tip.

9.  The Applicant was initially treated with closed reduction and slab immobilization but on 23 July 2018, surgery for open reduction and internal fixation with plating on left radius was performed.

10.  The Applicant was discharged on 26 July 2018 and attended physiotherapy and occupational therapy until 2019.

11.  During his hospital admission, the 1^st Respondent and Mr. Andy Ng of the 2^nd Respondent visited him. The 1^st Respondent gave him the name-card of Mr. Ng and informed him that the 2^nd Respondent was in fact his employer. Mr. Ng offered to settle the case privately but the Applicant refused, suggesting that they should report the case to their insurance company.

12.  In any case, after discharge from the hospital, the Applicant reported the accident to the Labour Department. In fact, the Applicant made two reports, the first one (Trial Bundle Page 87-90) was dated 27 July 2018 which was the day after his hospital discharge. The second was dated 4 October 2018.

13.  Both reports stated the 2^nd Respondent as the Principal Contractor but also named the site of the accident mistakenly as “1 Tai Wai Road”.

14.  It was only after further investigation by the Applicant’s solicitors that the Applicant became aware that the 3^rd Respondent was the Principal Contractor which contracted out the Work to the 2^nd Respondent.

The 3^rd Respondent’s case

15.  The Amended Answer of the 3^rd Respondent (“the Answer”, Trial Bundle Page 15-23) appeared to be prepared by the 3^rd Respondent’s then solicitors, Rita Law & Co..

16.  It was admitted in the Answer that:

a.  The 3^rd Respondent was contacted by MHK Restaurants Limited (“MHK”) and asked to find a contractor for carrying put renovations at the Premises (paragraph 3.2 of the Answer, Trial Bundle Page 16);

b.  The 3^rd Respondent then reached out to the 2^nd Respondent who issued a quotation for the Work (“the Quotation”, paragraph 3.3 of the Answer, Trial Bundle Page 16); and

c.  The 3^rd Respondent informed MHK which approved the Quotation, so the 3^rd Respondent signed the Quotation in its own capacity and returned it to the 2^nd Respondent, which then carried out the Work at the Premises.

17.  The grounds for disputing liability raised in the Answer can be summarised as follows:

a.  It was the usual practice of the 3^rd Respondent that each sub-contractor is responsible for its own employees’ compensation insurance;

b.  The 3^rd Respondent was unaware of the progress of the Work and had no staff at the Premises when the Work were being carried out and had no notice of the alleged accident until this action;

c.  The Work would not involve setting up or dismantling of the relevant working metal platform; and

d.  The 3^rd Respondent was not qualified to carry out such scaffolding works and did not sub-contract the scaffolding works to 1^st or 2^nd Respondent.

18.  Mr. Wong raised further grounds at the trial, which I would summarise as follows:

a.  The Applicant did not work in the Premises at all, because the 3^rd Respondent’s foreman apparently told Mr. Wong that he did not recognise the Applicant and also that the Applicant’s reports to the Labour Department showed the wrong address;

b.  Whether the accident happened as alleged at all: claiming that if the metal platform had collapsed, work would be stopped, insurance company would be notified and the 3^rd Respondent would not have paid the 2nd Respondent for the Work; and

c.  The Work was not connected to (nor part of) the main renovation contract between MHK and the 3^rd Respondent, but was just a favour asked by MHK which 3^rd Respondent “helped out” but did not know if MHK would pay or not (but Mr. Wong admitted that MHK did pay).

Considerations of the issues

Requirement for sub-contractor to obtain insurance and knowledge of accident

19.  First of all, these 2 issues are clearly irrelevant in the question of liability in an employees’ compensation claim.

20.  The employer’s liability for compensation is clearly specified under section 5 of the Employees Compensation Ordinance, Cap. 282 (“ECO”):

“…if in any employment, personal injury by accident arising out of and in the course of the employment is caused to an employee, his employer shall be liable to pay compensation in accordance with this Ordinance.”

21.  Nowhere in the section does it provides that “having a practice of asking sub-contractors to provide insurance” or “having no knowledge of the accident” (even if the latter is true) would absorb the employer from such liability.

Whether the metal platform was part of the contract for the Work

22.  As for the argument that the Work did not involve assembling and dismantling a metal platform, Mr. Wong spent much time cross-examining the Applicant on the rather irrelevant issue of the actual procedure of the Work.

23.  Later, Mr. Wong himself admitted that building a one-level metal platform (and then having a step ladder on top) was one option to do the Work.

24.  I see little relevance in distinguishing between having a one-level metal platform with a step ladder on top, or having a two-level platform, both must be reasonable options to allow a worker to place metal tubes at a height of 4.1 metre.

25.  I would accept the Applicant’s evident that building a two-level metal platform was for lifting and holding the metal tubes up during the installation work. It is a matter of common sense that this must be an incidental part of the Work.

26.  Just as Mr. Dennis Law, counsel for the Applicant, pointed out, if one contracted someone to nail down a wooden board, one cannot argue that the use of a hammer was not part of the contract.

27.  A similar defence was raised in Wong Leung Tak v Wong Lee (Brothers) Transportation Company Limited and Anor (CACV 151 of 1989) which was rejected by the Court of Appeal.

Qualification in carrying out scaffolding works

28.  This is again irrelevant given Section 5(4)(b) of ECO provides that:

“…an accident to an employee shall be deemed to arise out of and in the course of his employment, notwithstanding that the employee was at the time when the accident happened acting in contravention of any statutory or other regulation applicable to his employment, or of any orders given by or on behalf of his employer, or that he was acting without instructions from his employer, if such act was done by the employee for the purposes of and in connection with his employer’s trade or business…”

Whether the Applicant was actually working at the Premises

29.  The Applicant has explained how the mistaken address in the Labour Department reports came about: he and some others at the Premises called it “1 Tai Wai Road”. One can understand how this could happen: “Shop 1, 37-47 Tai Wai Road” might be mistakenly put down as “1 Tai Wai Road”. This evidence was not challenged by Mr. Wong.

30.  As far as the actual site of where the Work was done, there was no dispute. Both Mr. Wong and the Applicant agreed that the photographs (Trial Bundle Page 78-80) were taken at the Premises. These photographs showed part of the Work (metal tubes installed), the metal platform in question and also the Applicant himself (in two of the photographs).

31.  The Applicant has submitted an actual photograph of “1 Tai Wai Road” which most definitely was not a McDonald restaurant, and he gave evidence that the only McDonald restaurant on Tai Wai Road was at the Premises. This evidence was also not challenged.

32.  Mr. Wong claimed that, after the 3^rd Respondent became aware of the accident, investigations were carried out. Mr. Wong said that he was told by the 3^rd Respondent’s foreman that a person whom he could not recognise came to the Premises on 19 July 2018 claiming to be injured at work. The foreman then took the photographs (Trial Bundle Page 78-80) which were disclosed by the 3^rd Respondent.

33.  If this was somehow an allegation that the Applicant was an imposter, such a serious allegation was never raised in the Answer. In any case, this was only hearsay evidence and if Mr. Wong truly believed that this allegation has any merit, one would expect that he would have called his foreman to give evidence, which he did not.

34.  Further, if the foreman did actually suspect that the Applicant was an imposter, it would have been easy to verify the identity by, say, asking other workers in the Premises. If his identity could not be so verified, I cannot see why the foreman would bother taking all these photographs instead of, perhaps, calling the police straightaway.

35.  As such, I have no doubt that the Applicant was working in the Premises and was injured there on 19 July 2018.

36.  Incidentally, as Mr. Wong now admitted that 3^rd Respondent’s foreman was aware of this incident and has taken those photographs, this would clearly contradict paragraph 3.6 of the Answer (Trial Bundle Page 17) which stated:

“…None of the workers, staff or representatives of the 3^rd Respondent was present at the Premises when the Work were being carried out…”

37.  The position of the 3^rd Respondent was that it was totally unaware of the alleged accident until this action (see paragraph 3.9 of the Answer, Trial Bundle Page 17). If this was true, there must be some explanation why the foreman failed to inform the 3^rd Respondent at the time. No such explanation was provided by Mr. Wong.

38.  All such inconsistencies raise a serious question on the credibility of Mr. Wong and the 3^rd Respondent’s case. It gives the impression that Mr. Wong and the 3^rd Respondent were aware of the accident all the time but have been trying their best, even now, to avoid liability.

How the accident happened

39.  Mr. Wong also said that his foreman told him that he did not witness the metal platform collapsing (nor witnessed its aftermath).

40.  This was, again, hearsay evidence. Again, one would question why this was never raised in the Answer and that the foreman was not called to give evidence.

41.  Mr. Wong also claimed that if the platform had collapsed, all works on the Premises would have stopped and the insurance company would be notified etc. I find that this was pure speculation on his part.

42.  As such, I would give no weight to such evidence.

43.  In any case, Mr. Wong’s evidence was that the foreman told him that the Applicant claimed he had simply fallen down from the metal platform. That would have been the 3^rd Respondent’s case taken to the highest. The fact that the Applicant has fallen off the platform (irrespective of whether the platform had collapsed or not) would likely be enough to establish liability in an employees’ compensation claim.

The Work was not connected to (nor part of) the main renovation contract

44.  This was also not raised in the Answer.

45.  The 3^rd Respondent in its reply letter to the Applicant’s solicitors dated 13 January 2020 has enclosed the invoice and quotation of the Work from the 2^nd Respondent to the 3^rd Respondent dated 25 June and 6 August 2018 respectively (Trial Bundle pages 102 and 103).

46.  These documents, as well as the facts as admitted by in the Answer and Mr. Wong in court clearly showed that the 3^rd Respondent was the Principal Contractor for the Work according to Section 24(1) of the ECO:

“Where any person (in this section referred to as the principal contractor), in the course of or for the purposes of his trade or business, contracts with a sub-contractor for the execution by or under the sub-contractor of the whole or any part of any work undertaken by the principal contractor, the principal contractor shall be liable to pay to any employee employed by that sub-contractor or by any other sub-contractor in the execution of the work any compensation under this Ordinance which the principal contractor would have been liable to pay if that employee had been immediately employed by him; and where compensation is claimed from or proceedings are taken against the principal contractor, then, in the application of this Ordinance, references to the principal contractor shall be substituted for references to the employer, except that the amount of any compensation calculated by reference to earnings shall be calculated by reference to the earnings of the employee under the employer by whom he is immediately employed.”

47.  As such, whether the Work was part of the main renovation contract or not was irrelevant.

Conclusion

48.  In view of all the above considerations, I find that the 3^rd Respondent was the Principal Contractor for the Work and is therefore liable.

Quantum

The Applicant’s Earnings

49.  The Applicant’s evidence was that he lived with his wife and 2 children (8 and 18 at the time of the accident) and was the sole bread winner of the family. He claimed that he earned a daily wage of HK$1,400 and worked about 26 days a month (earning a total of HK$36,400 per month) in the Amended Employees’ Compensation Application (Trial Bundle Page 5-6).

50.  In his witness statement, the Applicant claimed that he had been a freelance metal worker but was working only with the 1^st Respondent since May 2018, and he had worked 23 days in May 2018 (earning HK$32,200) and 22 days in June 2018 (earning HK$30,800).

51.  The 1^st Respondent did not provide a List of Earnings and the Applicant’s bank account only recorded a direct deposit of HK$13,750 from “Wang Yip” in May 2018 and HK$2,500 from “Kong Yip” in June 2018.

52.  The Applicant explained that Wang Yip and Kong Yip were the 1^st Respondent’s client but he was actually employed by the 1^st Respondent, who would pay the balance of his earnings in cash. He claimed that this was a scheme of “Big and small wages” but claimed that he did not understand this system or why he was paid like that.

53.  I note from the Hong Kong Construction Industry Employees General Union yearly salary table 2020 issue, the recommended daily wage of a metal worker was HK$1,250 from November 2017 and HK$1,300 from November 2018 which remained unchanged to November 2020.

54.  Besides the recommended wages, the actual average wage was HK$1,287 in July 2018 as reported by the Census and Statistics Department in the document “Average Daily Wages of workers engaged in public sector Construction Projects as reported by main contractors”.

55.  As such, the evidence seems to show that the Applicant’s daily wage should be between HK$1,250 and HK$1,300. The Applicant claimed that he was paid more because he had welding skills.

56.  I note that both the figures of “13,750” and “2,500” are divisible by 1,250 and not by 1,287, 1,300 or 1,400. I think it unlikely that Wang Yip and Kong Yip would pick a random number as the Applicant’s payments (even if there was this claimed “Big and small Wage” scheme). Their payments appeared to represent exactly 11 and 2 days of work respectively if they had paid the Applicant exactly HK$1,250 per day.

57.  As such, I think, on balance, HK$1,250 was the likely daily wage of the Applicant.

58.  There are other documents to consider.

59.  The Applicant’s IRD records showed that he earned an average monthly income of HK$18,067 in 2015/2016, HK$12,917 in 2016/2017 and HK$16,417 in 2017/2018.

60.  However, the Applicant claimed that he was also paid in cash sometimes as direct deposit into his bank account.

61.  The Applicant has produced a copy of his bank account. If we assume that the cash deposits were his earnings as a freelance metal worker, the figures between July 2017 and April 2018 shows that he worked about 18 days a month:

HK$(27,400 + 30,150 + 31,200 + 22,300 + 28,850 + 34,690 + 28,500 + 21,615) / 1,250 / 10 = 17.9

62.  Taken into all the above considerations, I would estimate the Applicant’s average monthly earnings to be HK$(1,250 x 18) = HK$22,500

Loss of earning capacity

63.  Form 7 put such at 1% but the Applicant has appealed against it.

64.  The Applicant’s expert, Dr. Fu Wai Kee, found objective signs of muscle wasting in the Applicant’s left forearm and non-union of the ulnar styloid on X-ray. These would support residual pain and weakness in the Applicant’s left wrist. Therefore, I would accept Dr. Fu’s opinion of 5% loss of earning capacity.

Compensation under Section 9

65.  The Applicant was born on 4 July 1971 and was 46 years old at the time of the accident. The applicable multiplier should be 72.

66.  The claim under this head should be:

HK$(22,500 x 72 x 5%) = HK$81,000

Compensation under Section 10

67.  I would accept the Applicant’s sick leave totalling 378 days which was endorsed by Dr. Fu.

68.  The claim under this head should be:

HK$(22,500 x 378/30 x 4/5) = HK$226,800

Compensation under Section 10A

69.  I would accept medical expenses of HK$1,983 as supported by receipts.

70.  The total compensation should therefore be HK$(81,000 + 226,800 + 1,983) = HK$309,783

Order

71.  I would therefore give the following orders:

a.  Judgment on liability be entered against the 3^rd Respondent;

b.  Employees’ compensation be assessed at HK$309,783 plus interest at half judgment rate from the date of the accident (19 July 2018) to the date of judgment, and thereafter at judgment rate until payment; and

c.  Costs of the action be to the Applicant to taxed if not agreed, with Certificate for Counsel. The Applicant’s own costs be taxed in accordance with the Legal Aid Regulations.