LAM CHI BIU v. MAK KEE LTD AND ANOTHER

cacv 191/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 191 of 2004

(on appeal from DCEC NO. 1203 of 2002)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.  I agree with the reasons for judgment of Le Pichon JA. 

Hon Le Pichon JA:

2.  This is an appeal from the judgment dated 3 and 4 June 2004 of HH Judge H C Wong.  It concerned an application for compensation under the Employees’ Compensation Ordinance, Cap. 282 (“the Ordinance”).  The judge awarded the applicant the sum of $747,045.33 with interest and ordered costs against the 1^st and 2^nd respondents on an indemnity basis.  In August 2004, the applicant conceded that the costs should be party and party costs rather than indemnity costs.  At the conclusion of the hearing, the appeal was dismissed save that the costs below were varied to party and party costs.  Written reasons were to be handed down later which we now do.

3.  The applicant who was an employee of the 1^st respondent sustained multiple injuries at his workplace when he was attacked by three men on 2 November 2001.  The incident took place at a warehouse belonging to the 1^st respondent in Fanling.  Albeit a few months late, the 1^st respondent as employer filed a Form 2 notice giving notice of the accident the Commissioner.  In the appeal bundle, there are two Form 2 notices, dated 18 February and 13 March 2002 respectively.  The one dated 13 March contained more information but otherwise there is nothing inconsistent in the information given in the two forms.  Section N of the Form required the employer to specify the type of work performed by the employee at the time of accident. The 1^st respondent ticked box 20 headed “Others” with the following annotation:

“while attending an interview and making enquiries with a male applicant, suddenly attacked by him and two other assailants who rushed into the office with knives”.

4.  On 12 August 2002, the Ordinary Assessment Board issued a certificate of assessment (“the Form 7 certificate”) assessing the applicant’s loss of earning capacity permanently caused by the injury at 30% and the period of absence from duty necessary as a result of the injury from 2 November 2001 to 6 May 2002.  On 22 August 2002, the Commissioner issued a certificate of compensation assessment, assessing the total amount of compensation at $747,045.33 (“the Commissioner’s certificate”).  Neither party appealed either of the certificates issued.

5.  On 31 December 2002, the applicant filed a section 18A application using the standard Form 1 contained in the Schedule to the Employees’ Compensation (Rules of Court) Rules seeking compensation under sections 9, 10, and 10A of the Ordinance.  Under paragraphs (5) and (8) relating to particulars of incapacity and amount claim as compensation, it was stated that these were “to be assessed”.  Leave was granted on 28 February 2003 to the 2^nd respondent to be joined as a party, just over six months after the issuance of the Commissioner’s certificate. 

6.  The application was heard by the judge over two days in June 2004.  Counsel for the applicant raised a preliminary matter.  He submitted that the court was not required to hear evidence and make a determination on quantum.  The judge ruled that the applicant’s failure to state in Form 1 that he relied on the certificate was not fatal.  She ruled that it was not necessary for the applicant to file a separate application, or to amend the application dated 31 December 2002 to include an application for an order to enforce the certificate issued under section 16A(2) of the Ordinance.  The judge also noted that neither respondent had sought leave to appeal the Commissioner’s certificate out of time prior to the hearing.  She dismissed the 2^nd respondent’s application made at the hearing to appeal the Commissioner’s certificate out of time as it was not supported by any explanation giving good reasons for the delay in making the application.  The judge then proceeded to hear evidence on the issue of liability, the 2^nd respondent contending that the accident did not arise out of and in the course of employment.  The judge found in favour of the applicant and awarded compensation based on the Commissioner’s certificate.

This appeal

7.  The issue which arises is the status of a certificate issued under section 16A of the Ordinance.  Mr Clough who appeared for the 2^nd respondent submitted that the applicant could not rely on it merely for the assessment of compensation but had to rely on it in its totality.  It was said that in such case the only role left for the District Court was one of enforcement if money was not paid under the certificate.  It was also said that, in the present case, the 2^nd respondent had been misled as to fact inasmuch as in the application filed in December 2002, the applicant not only placed no reliance upon either of the certificates issued, he sought the court’s assessment on the matters covered by the certificates.  In short, Mr Clough submitted that the proceedings were a nullity.

The statutory framework

8.  Section 5(1) renders an employer liable to pay compensation under the Ordinance if the employee is injured by an accident arising out of and in the course of his employment.  Section 5(4)(a) presumes an accident arising in the course of an employee’s employment to have also arisen out of that employment in the absence of evidence to the contrary.  The starting point in the administrative procedure is the giving of notice of the accident by the employee to the employer.  The employer is also required to give notice within 14 days of the accident in the prescribed form to the Commissioner where, inter alia, the accident results in incapacity, “irrespective of whether the accident gives rise to any liability to pay compensation.”  Upon receipt of such a notice, section 15(3) provides that the Commissioner

“may make such inquiry as he thinks fit and if it appears to him that a claim for compensation may arise in respect of---

(b) the incapacity of the employee, he may, if the employee so requests, make a claim for compensation on behalf of the employee.”

It is to be noted that implicit in the way that subsection was drafted was that liability still had to be determined but, it would appear, not by the Commissioner.

9.  Where a claim for compensation arises in respect of an accident causing injury to an employee that results in temporary incapacity, the Commissioner may assess the compensation payable under sections 7, 9 and 10.  See section 16A(1).  The Commissioner is therefore empowered but not obliged to make the assessment but if he does assess compensation, he must issue a certificate to the employer and employee stating the amount of compensation and details of the assessment.  There are provisions for objecting to the assessment which would result in an administrative review of the assessment.  However, such an objection has to be made within 14 days of the issuance of the certificate subject to the Commissioner’s power to enlarge time.

10.  In addition to the review, the court is empowered under section 16B, to cancel a certificate issued under section 16A(2) on an application by the employer, the employee or the Commissioner if certain conditions are satisfied.  But such an application has to be made within six months of the date of issue of the Commissioner’s certificate, subject to the court’s power to allow the application out of time. 

Is a section 16A certificate binding?

11.  Given the statutory framework, absent any objection pursuant to section 16A or any application under section 16B, I have little doubt that the certificate is binding.  Ng Ming Cheong v Mass Transit Railway Corporation [1997] 3 HKC 413 (at 419G) is authority for the proposition that a section 16A certificate can become conclusive evidence through the appeal procedure not being invoked.  The fact that that decision concerned a Form 7 certificate as distinct from a certificate issued pursuant to section 16A makes no difference.  Given that the 2^nd respondent’s application to apply out of time had been dismissed by the judge for valid reasons such that the exercise of her discretion cannot be impugned, in my view, the Commissioner’s certificate is binding and conclusive. 

12.  The next question that arises is whether the certificate is binding as to both liability and quantum or only as to quantum.  As noted above, none of the provisions relating to the Commissioner’s role relates or refers to or, indeed, contemplates, the determination of liability by the Commissioner.  Contrast the provisions relating to the assessment of compensation.  Rather, section 15(3)(b) militates against a construction that a determination of liability may be made by the Commissioner.  Although on the facts of the Mass Transit case, the question did not arise given that there was a concession as to liability by the time of the appeal, I had expressed the view (at 418C) that the District Court is the forum to contest liability where that is disputed and that in such a case, an employee may claim for compensation under section 18A.  I remain of that view.  On a proper construction of section 16A of the Ordinance, I am of the opinion that the certificate is not binding as to liability, not least because it was not contemplated by the Ordinance that the Commissioner should determine the issue of liability, the District Court being particularly well-suited to adjudicate on such a matter.  Accordingly, the judge was entitled to proceed as she did to hear the section 18A application on the issue of liability.  It follows that Mr Clough’s challenge must fail.

Hon Sakhrani J:

13.  I agree.