MA KAM SING v. LAU SUI KEUNG t/a LAI CHING LIGHTING & ELECTRICAL CO

DCEC 1022/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1022 OF 2010

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JUDGMENT

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1. The applicant claims against the respondent for compensation under Ss 9, 10 and 10A of the Employees Compensation Ordinance Cap 282.  The respondent denies he is liable claiming the applicant was not his employee but an independent contractor, and in any event, the accident did not arise out of the employment.

The applicant’s case on liability

2. The applicant Mr Ma Kam Sing (“Mr Ma”), claims that on 31 August 2008, he was injured while he was employed by the respondent, Mr Lai Sui Keung (“Mr Lai”), as a delivery worker at a monthly wage of $12,000.

3. Mr Ma’s evidence was, on the afternoon of 31 August 2008, he was instructed by Mr Lau to deliver a washing machine to a customer in the neighbour of the respondent’s shop in Yen Chow Street in Sham Shui Po, Kowloon.  He was joined by a new colleague Mr Lee Hoi Cheung when he made the delivery.

4. Upon return to the respondent’s shop after the delivery at around 4 pm, Mr Ma went to the back of the shop.  He claimed he was climbing the internal staircase to the shop’s mezzanine floor where goods were stored to collect goods for the next delivery when a few rice cookers fell from the mezzanine floor onto his head.  He felt dizzy and eventually lost consciousness.  When he came to, he was in the ambulance being taken to Caritas Medical Centre.  The applicant admitted subsequent to the accident on the staircase to the mezzanine floor, Mr Ma suffered a stroke.

5. Mr Ma disagreed with the respondent’s assertion that he was an independent contractor who was paid a fee for each delivery he made for the respondent.  Mr Ma insisted he was employed by Mr Lai and received a monthly salary.  He further claimed he was given a key to the respondent’s shop with the responsibility of cleaning and general duties at the shop working from 10 am to 9 pm each day.  He produced a letter with the respondent’s letterhead and chop dated 2 April 2008 stating that Mr Ma was the employee of the respondent with a monthly salary of $12,000 (p 104 of the bundle).  He said the letter was written at his request in support of a credit card application.

6. Mr Ma claimed he was first employed by Mr Lai in 1990 and had worked for a few months at the shop.  In 1994, he returned to work for him for a short period.  He returned to work for Mr Lau again in 2004 until the accident in August 2008.  He denied he was an independent contractor or that he was paid on a piece work basis for each delivery job done.  He admitted the $12,000 monthly income included tips he received from the respondent’s customers. He further denied the list of delivery and installation charges (at p 113 of the bundle) applied to him.

The respondent’s case on liability

7. The respondent’s proprietor Mr Lau gave evidence in court.  He claimed all the delivery and installation work at his shop was contracted out to a number of sub-contractors and Mr Ma was one of his sub-contractors.  He relied on the respondent’s profits and loss account for 1 April 2007 to 31 March 2008 and 1 April 2008 to 31 March 2009 with a lists of sub-contractors and payments made to them (p 109-112 of the bundle).

8. It is Mr Lau’s evidence that on 31 August 2008, he gave a few delivery orders to Mr Ma and his work was shared by a new sub-contractor Lee Hoi Cheung.  At around 4 pm, after Mr Ma returned from a delivery job, Mr Lau told him to take a rest before making the next delivery.  He believed Mr Ma went to the back of the shop to clean up because he looked hot and sweaty.  Lee Hoi Cheung returned to the shop with the trolley two minutes later and proceeded to the back of the shop.  Soon after, Mr Lau was alerted by Lee that Mr Ma was feeling unwell, he went to the back of the shop where he saw Mr Ma lying between the stairs and the floor.  The ambulance was then called to take Mr Ma to the hospital.

9. It was the evidence of Mr Lee Hoi Cheung that Mr Ma and he had delivered a washing machine to a tenement building in Fuk Wah Street where they had climbed up to the 3^rd or 4^th floor to make the delivery.  Afterwards, Mr Ma told him he was not feeling well and took the public transport to return to the shop instead of walking back.

10. After Mr Lee returned to the shop, he went to the back of the shop to find Mr Ma lying between the stairs and the floor trying to get up or speak without success.  He claimed he saw no bruises or bleeding wounds on Mr Ma, neither were there any goods scattered on the floor below the stairs.

11. Mr Lee confirmed he was engaged to work as a sub-contractor of Mr Lai at his shop.  He was paid by the number of deliveries he made and he would be paid every two weeks by Mr Lau.  He stopped working for the respondent in July 2010.

12. The respondent’s third witness Miss Wong Yim Hung gave evidence.  She told the court that she was also an independent contractor of the respondent and was paid a daily wage of $280 working from 10 am to 9 pm.  She received no sales commission, even though her duties were clerical, she was also required to do some cleaning and sales.

13. It was Miss Wong’s evidence that she did not hear the sound of a person falling down from the staircase even though she was sitting close to the back of shop.  She claimed she did not see any goods scattered on the floor below the stairs when she went to the back upon being told Mr Ma was unwell.  She no longer worked for the respondent after December 2009.

The Issues

14. The issues on liability are:

(a)  Was the applicant an employee of the respondent or an independent contractor?

(b)  Did the applicant suffer an accident in the course of employment on 31 August 2008?

(c)  Did the applicant suffer a stroke as a result of an accident in the course of employment and arising out of his employment on 31 August 2008?

Findings

(a)  Was the applicant an employee of the respondent or an independent contractor?

15. The test on determining whether a person was an employee or independent contractor is set out by Ribeiro PJ in the case of Poon Chau Nam v Yiu Sui Cheung [2007] 1 HKLR 951 para 17 where he referred to the Privy Council judgment in Lee Ting Sang v Chung Chi Keung & another [1990] 1 HKLR 784 at 766H – 767B.  In the privy council case, Lord Griffiths agreed with the Court of Appeal and said the matter had never been better put than by Cooke J in the case of Market Investigations Ltd v Minister of Social Security [1969] 2 QB 173 at 183-185:

“… the fundamental test to be applied is this: “Is the person who had engaged himself to perform these services performing them as a person in business on his own account?”  If the answer to that question is “yes,” then the contract is a contract for services.  If the answer is “no”, then the contract is a contract for services.  No exhaustive list has been complied 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 consideration 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.”

16. Ribeiro PJ added in para 18 of his judgment:

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

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

17. The list of eight criteria set out in Chitty on Contracts Vol 2 of the factors to be considered in identifying a contract of employment was applied by both the Court of Appeal and the Court of Final Appeal in the Poon Chau Nam case.  The Court of Final Appeal in applying the facts to the criteria pointed out the Court of Appeal had failed to distinguish between an “umbrella or global” contract and a “specific engagement” and allowed the appeal by the applicant, the air-condition worker.

18. The criteria are:-

(1)  the degree of control exercised by the employer;

(2)  whether the worker’s interest in the relationship involved any prospect of profit or risk of loss;

(3)  whether the worker was properly regarded as part of the employer’s organisation;

(4)  whether the worker was carrying on business on his own account or carrying on the business of the employer;

(5)  the provision of equipment;

(6)  the incidence of tax and national insurance;

(7)  the parties’ own view of their relationship;

(8)  the structure of the trade or profession concerned and the arrangements within it.

19. The respondent denied Mr Ma was his employee claiming he was paid according to the number of deliveries he made for the respondent. He produced four chits for August and September 2007, and July and August 2008 which stated they were payments to the sub-contractor for the month.  The sums paid were $8,680, $8,850, $10,000 and $8,700 respectively.  These were also included in the sub-contractors’ list of payments exhibited to Mr Lau’s profit and loss account for 2007/2008 and 2008/2009 because the total payments to Mr Ma in July and August 2008 tallied with the 2008/2009 sub-contractor fee to him (p 112 of bundle D).  He also produced a typed list of installation and delivery charges (p 113 bundle D) that his customers had to pay.

20. Mr Ma claimed he worked at Mr Lau’s shop from 10 am to 9 pm daily and he was paid a monthly wage of $12,000 including tips.  He claimed he had been working at Mr Lau’s shop since 2004 up to the time of accident.

21. Miss Wong admitted she was paid a daily wage of $280 and she would work between 10 odd to 20 odd days a month from 10 am to 9 pm doing mainly clerical duties.  Mr Lee, on the other hand, admitted he would only be paid based on the number of deliveries he made a day.  On the day of the incident, it was his first day of work in Hong Kong, he was then a new immigrant.

22. Applying the principle laid down by the Court of Final Appeal in the Poon Chau Nam case to the present case, I find Mr Ma was a casual worker on a global or umbrella contract of employment.  The reasons are as follows : Mr Ma was paid a monthly wage in July and August 2008. Even though the respondent for tax purpose had regarded all persons working for him as sub-contractors, it is clear to me both Miss Wong and Mr Ma were in fact ‘employees’ as defined in s 2(1) of the Employees’ Compensation Ordinance.  Both of them reported for work at the respondent’s shop at 10 am until 9 pm daily.  The respondent’s record showed Mr Ma was paid $10,000 for his work at the shop in July 2008 and $8,700 in August 2008.  Even though the respondent may keep a list of charges for installation and delivery, the payments were collected by the respondent and Mr Ma only received his monthly wage on the 5^th day of each month.  Though it is not disputed that Mr Ma had been borrowing from the wages he earned during the month from Mr Lee, it goes to show Mr Lau trusted Mr Ma would be working in his shop on his instruction for the whole month.  Further, Mr Ma took orders and instructions solely from Mr Lau at his shop, the wages he earned in July and August 2008 showed he had consistently worked at Mr Lau’s shop in those 2 months.  Though Mr Lau’s profit and loss account showed a list of other sub-contractors, some of them were probably electricians or plumbers, not delivery workers like Mr Ma.  Further, Mr Ma was given a letter stating he was the respondent’s employee in April 2008 by the respondent’s shop.  I accept it is a genuine document issued by the respondent or his staff (p 104 bundle D) for Mr Ma in support of his credit card application.

23. Out of the list of 8 criteria, the first 5 have been fulfilled, I therefore conclude Mr Ma was an employee of the respondent on 31 August 2008 as defined in s 2(1) of the Ordinance.

(b)  Did the applicant suffer an accident in the course of employment on 31 August 2008?

24. There are conflicting evidence from Mr Ma on whether he was hit by falling rice cookers as he ascended the stairs to the mezzanine store room of the shop and suffered a stroke or his stroke was not caused by falling objects.

25. Independent evidence is found from the Caritas Medical Centre’s Accident and Emergency Department (the “A&E”) doctor at 5 pm on 31 August 2008, it was recorded that Mr Ma ‘complained of sudden onset of right side weakness, with slurring of speech while working.  Due to muscle weakness, he sustained a fall from ladder which was about 10 steps high’.

26. The same A&E doctor further recorded that he found no scalp haematoma or external wound on Mr Ma.  He was also found to have high blood pressure, right side paralysis with no loss of consciousness .  The doctor concluded he had an ischaemic stroke with hemiplegia after a brain scan showing ischaemic infarct in the left basal ganglia region.

27. Mr Ma filed an accident report on 16 September 2008.  Under column D, he admitted he was feeling dizzy as he went to the store room and fell to the floor which caused a stroke.  At the hearing, he claimed the report was filled in by his live-in girlfriend when he was in hospital.

28. On 26 November 2009, he made a declaration to the Labour Department claiming he was hit on the head by falling goods causing the paralysis of his limbs.

29. In his ECC application of 30 August 2010, he stated he was going up the staircase to the shop’s store room to collect goods when bulk goods on the staircase fell on his head, hand and leg.

30. His witness statement of 18 August 2011 stated he was hit by 3 or 4 boxes of rice cookers when he was on the 7^th steps on the staircase to the store.  He felt dizzy and walked down the stairs before he lost consciousness.

31. His evidence at trial was, he was hit by 1 to 2 pieces of goods, they scraped the side of his head and he felt dizzy with paralysis on his limbs.  He walked down the stairs before he became unconscious.

32. At the joint examination by the two medical experts, he told the doctors the falling goods hit him on his forehead and vertex.  He believed he bled from his scalp, he felt dizzy and squatted down.

33. The evidence from Mr Lee was, he saw Mr Ma lying between the stairs and the floor as he entered the back of the shop.  As Mr Ma was trying to move his legs, Mr Lee helped him to sit on the last step of the stairs against the wall.  He found Mr Ma had lost his speech and could not tell him what had happened.  He also said he did not find any goods scattered on the floor at the time.

34. Mr Ma told the two medical experts when they examined him on 20 October 2011 that he had recovered only 60% of his memory since the stroke.  In the opinion of Drs Chao and Fong ‘closed head injuries rarely caused an infarct, as opposed to haemorrhage …..  Here a blood vessel was blocked, a process that takes time (years) to develop’.

35. The lack of head or scalp wound showed that it is unlikely Mr Ma was struck on the head by falling goods that caused the stroke.  As Drs Chao and Fong stated, closed head injuries rarely cause an infarct.  They considered Mr Ma’s stroke was a coincidence.  I assume that means it coincided with Mr Ma’s going up the stairs to the store.  And as neither Mr Lee nor Miss Wong found any goods scattered on the floor, it is unlikely Mr Ma was hit by falling goods and that it had caused the stroke.

36. As to whether Mr Ma’s stroke was caused by the strenuous work he was performing prior to his return to the shop, Mr Lee’s evidence was, he being a younger man had volunteered to carry the washing machine up to the 3^rd or 4^th floor premises and it was his first day of work at the shop.  He also said Mr Ma was sweating profusely and had taken the bus back to the shop while he walked and pushed the trolley along on his way back. This indicated Mr Ma was not performing the more strenuous duty on the delivery job before he suffered a stroke on 31 August 2008.

37. On the aforesaid basis, I am satisfied Mr Ma suffered a stroke while at work but it did not arise out of his employment. I accept there was clear evidence showing the accident did not arise out of the employment.  Rogers VP in Wong Yuet Yung v Wah Fung Hong Gas Engineering Co Ltd CACV 33 of 2007 (judgment date 19 February 2008) at para 9 held:

“9. In my view the judge correctly construed this subsection. In doing so he had reference amongst other things to the decision of Regina v National Insurance (Industrial Injuries) Commissioner ex parte Richardson [1958] 1 WLR 851. In the course of his judgment Lord Goddard CJ pointed out that the words of the section, (the same as the present section) were “in the absence of evidence to the contrary” and not “in the absence of proof to the contrary” or “unless the contrary is proved”. He construed the section to mean no more than that if there was evidence that the accident did not arise out of the employment then no presumption arose at all.”

38. “5(4)  For the purposes of this Ordinance –

(a)   an accident arising in the course of an employee’s employment shall be deemed, in the absence of evidence to the contrary, also to have arisen out of that employment;”

Applying the Court of Appeal’s interpretation of s 5(4)(a) of the Ordinance, I am satisfied that the evidence clearly showed Mr Ma suffered a stroke in the course of employment, but it did not arise out of the employment.

39. It was the evidence of the respondent and his witnesses that Mr Ma was a heavy smoker and was over-weight.  Mr Ma himself admitted he weighed over 200 lbs at the time, and he lost 30 lbs after the stroke.  In the medical experts’ opinion, the stroke was a coincidence as his blood vessels have been blocked over time, they were not able to establish a casual effect between the incident and his stroke (pp 92-93 of the bundle). The ischaemic infarct was in the deep part of his brain and not associated with any bleeding under the skull from a head injury.  The overall medical evidence from the Caritas Medical Centre and the two medical experts is Mr Ma did not suffer any head injury when he was found lying on the floor.  That Mr Ma collapsed on the floor of the shop because of the stroke and the sudden onset of the right side weakness of the body and hemiplegia.  The A&E department found Mr Ma had no external wound but his blood pressure was alarmingly high at 216/102.  It remained high after his admission to the medical ward at 220/90 until seven days later after medical intervention at 160/70.

40. The joint medical experts concluded that Mr Ma “had almost certainly suffered from uncontrolled blood pressure for some time.  This is supported by the fact that his blood pressure remained high for a number of days after his admission”.

41. The applicant’s counsel, Ms Wong, submitted the burden of proof is on the respondent that the stroke was not caused by the heavy labour work performed by Mr Ma did not trigger the onset of the stroke. Mr Hung, counsel for the respondent, disagreed.  He relied on the dictum of Yuen JA in the Court of Appeal case of Sit Wing Yi Sibley v Berton Industrial Ltd [2011] 4 HKLRD 91, at para 41 she held:

“It seems to me that argument elides the concepts of “injury” in the phrase “injury by accident”. The unexpected nature of the “injury” itself does not constitute the act or event or occurrence of a mishap which is the “accident”. An applicant for compensation must show that there has been an accident that produced the injury (see Fife Coal Co Ltd v Young [1940] AC 479, 486 and Fenton v J Thorley & Co Ltd [1903] AC 443, 453: “an unintended and unexpected occurrence which produces “hurt or loss”) (p 107).”

42. Yuen JA further held at para 45:

“The burden of proving “injury by accident” was on the applicant …..”

The aforesaid paragraphs 41 and 45 was said with reference to s 5 of the Ordinance.

43. I conclude from the evidence that the stroke was not caused by falling rice cookers hitting the head of Mr Ma because there were no rice cookers scattered on the floor where Mr Ma was found lying and the Caritas doctors found no external head wounds on Mr Ma at the time of his admission to Caritas Medical Centre.  The two experts stated that an object scraping his head could not have caused the ischaemic infarct deep inside the brain.  Mr Ma’s duties that afternoon was far from strenuous, he was assisted by a new delivery worker on the delivery, Mr Lee, who had carried the washing machine up 3 flights of stairs and they had used a trolley to push the washing machine to the neighbourhood, this was not disputed by Mr Ma.  Therefore, the work Mr Ma performed before the onset of the stroke was not caused by strenuous or heavy work.

44. I rely on the principle laid down by Aikens LJ in Secretary of State for Work and Pensions v James Scullion [2010] EWCA Cir 310 at para 49:

“judges of the highest authority had insisted on the distinction between the ‘accident’, which must be external, and the resulting ‘injury’ to the claimant, whether the type of personal injury suffered by the claimant was of an expected type or an unexpected type …..”

45. Applying the afore-mentioned principle to the present case, I am not satisfied the applicant has successfully shown the onset of the stroke he suffered was caused by the strenuous and heavy duty imposed on him by his employment.

Quantum

46. Should I be wrong on my findings that Mr Ma’s stroke was triggered by the heavy work he was performing that afternoon and is considered to have suffered injuries arising out of his employment, the following is my assessment of quantum of compensation.

Section 9 compensation

47. Mr Ma was born on 11 May 1952, he was 56 years old on 31 August 2008.  Under s 7, the lump sum compensation is 48 months of monthly payment.  In the Certificate of Assessment, the MAB’s assessment was ‘nil’ under this head.  The applicant claims a loss of earning capacity of 50%, the calculations under s 9 is therefore:

$12,000 x 48 x 50% = $288,000.

Section 10 sick leave payment

48. The medical assessment board also refused to grant any sick leave to Mr Ma because no sick leave certificate was ever issued to him.  The medical expert did not consider this item because no casual effect had been established by them between the incident at work and the stroke.  The applicant asks for 2 years.  Should I fully allow the sick leave period asked for, the compensation would be:

$12,000 x 24 x 4/5 = $230,400

Section 10A medical expenses

49. Medical expenses at Caritas Medical Centre –

in patient hospitalization	$4,834
accident and emergency department	$115
geriatric day hospital	$1,320
out-patient department (medical)	$260
out-patient department (orthopaedic)	$180
physiotherapy	$280

50. It is clear from witness evidence and the medical records of the Caritas Medical Centre, Mr Ma was limping on 31 August 2008 and in the months prior to that date.  His orthopaedic problem was not related to the incident on 31 August 2008.  I therefore disallow the orthopaedics out-patients expenses and the physiotherapy expenses.  The total medical expense assessed is $6,529.

Summary

52. On the basis of my findings in paras 38-45, the application is dismissed with costs to the respondent to be taxed if not agreed.  The costs order nisi will be made absolute if no application is made within 14 days hereof.