CHAN YUK CHUN FOR HERSELF AND THE MEMBERS OF THE FAMILY OF LUK CHI SHING, DECEASED v. WONG YIU CHUNG AND ANOTHER

DCEC 2280/2018

[2019] HKDC 1521

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2280 OF 2018

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JUDGMENT

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INTRODUCTION

1.  This is an application taken out by a widow for herself and her family (in this case, family members only consist of herself and her daughter) on 3 October 2018 regarding employees’ compensation arising out of an accident that occurred on the second day of work of her late husband Luk Chi Shing (“the Deceased”), who was an experienced dismantling worker, working for the 1^st respondent.  The 2^nd respondent was the company, which took out insurance on behalf of the 1^st respondent.

2.  Judgment on Liability was entered against the 1^st and 2^nd respondents on 17 May 2019, leaving employees compensation to be assessed.  The assessment was heard before me on 2 October 2019.

3.  There is no dispute that the daily wages as a dismantling worker for the nature of job done by the Deceased at the material time was HK$1,300.

4.  The issue in this case is to ascertain how many working days per month prior to the accident were undertaken by the Deceased, so as to calculate the Deceased’s earnings for the purpose of assessing the compensation under the provisions of the Employees Compensation Ordinance, Cap 282 (“the ECO”).

5.  Hearing of this case for the purpose of Assessment of the compensation under the ECO was scheduled for 2 October 2019.  Shortly before the start of the hearing on that day, both respondents’ name was called by the Court Clerk inside and outside court, but no response.  At the start of the hearing, the solicitor for the applicant, Miss Charmian Ng (“Ms Ng”) informed the court that:-

(1)  Both respondents all along have been absent in all Court hearings in relation to this case Order made by Her Honour Judge Winnie Tsui on 16 August 2019, which set out the said hearing date for Assessment of the Compensation under the ECO and all ancillary directions to the parties for the said hearing, were duly served on the 1^st respondent by registered post on 18 September 2019 and on the 2^nd respondent by having left a copy of the said Order on its registered office address on 18 September 2019.

(2)  Affirmation of Service regarding the said Order (see above paragraph 4(2)) on both respondents was made and filed on behalf of the applicant on the following day on 19 September 2019.

FACTS

6.  On 3 January 2017 at about 5:00 pm in the afternoon, the Deceased, whilst in the course of his employment with the respondents, was working at a site on Ground floor of the mall “K11”, 18 Hanoi Road, Tsimshatsui, Kowloon, Hong Kong (“the Site”). 

7.  The Site was under renovation at that time whereby the Deceased was instructed by the 1^st respondent to dismantle the air-conditioning conduits in the ceiling (“dismantling work”).  The Deceased had to climb on a 2-tier metal scaffold of about 3.3 meters in height for the purpose of carrying out the dismantling work.

8.  At about 5:00 pm, after carrying out his dismantling work, the Deceased descended from the metal scaffold whereupon he lost his balance suddenly and fell onto the ground.  As a result, he sustained serious head injuries and sadly passed away shortly after his admission to the Queen Elizabeth Hospital on that day.

9.  As indicated above, the 1^st and 2^nd respondents were all along absent in these proceedings including their failure to file any reply or answer at all in these Employees Compensation Proceedings.

10.  As a result, Judgment on Liability was entered against the 1^st and 2^nd respondents, leaving Employees Compensation to be assessed. 

11.  As above-mentioned, the main issue relates to the calculation of the Deceased’s monthly income.  Ms Ng pointed out that there is no dispute that the daily wage of an experienced dismantling worker like the Deceased was HK$1,300, the purpose of the present hearing is therefore the ascertainment of the appropriate number of working days for the purpose of calculating the monthly earnings of the Deceased under the provisions of the ECO.

Evidence at the haring

(1) The evidence of the applicant’s case

12.  The applicant only called one witness, namely herself.  She gave evidence at the hearing whereby she confirmed and adopted her witness statement dated 6 August 2019 as her evidence in chief.  As the respondent s were absent, there was no cross-examination.

13.  The testimony of the applicant may be summarised as follows:-

(1)  The accident happened on the 2^nd or 3^rd day when the Deceased started to work for the 1^st respondent.  The Deceased was certified dead on her arrival at the Queen Elizabeth Hospital. 

(2)  The Deceased was a skilled dismantling worker in the renovation field for over 30 years.  He had been working for different employers before the accident on casual basis, earning a daily wage of HK$1,300.

(3)  Prior to the accident, he had been working 4 days a week from Monday to Thursday between 8 am and 5 pm, occasionally working on Friday or Saturday.  The Deceased had been working on average for about 20 days a month. 

(4)  According to the applicant, all the wages received by the Deceased prior to the accident were paid in cash, and there was no documentary evidence to prove the actual amount of his income as the Deceased never deposited his cash wages to his bank account.  He gave part of his cash earnings, around a few thousand dollars as household expenses to the applicant every month.  Neither had the Deceased reported his earnings to the Inland Revenue Department or to the Mandatory Provident Fund Schemes Authority (“MPF Authority”).

(5)  The applicant’s vision problem of glaucoma deteriorated further after the Deceased passed away and made her difficult to continue her job as health care worker.  She had become unemployed since August 2017.

(6)  The applicant and the Deceased have a daughter who was born in 1982 and is a mentally incapacitated person.

(2) No evidence tendered from the respondent s side

14.  As above-mentioned, this hearing was heard in the absence of the 1^st and 2^ndrespondents who were duly served with all relevant court documents regarding this Employees Compensation matter but choose not to take part in any of the court proceedings.  

15.  Nevertheless, there was evidence before the court in the Assessment Bundle whereby the 1^st respondent had stated in his Declarations to the Labour Department that the Deceased’s daily wage was HK$1,300 and the Deceased only started to work for him on 2 and 3 January 2017.

16.  Also, a co-worker of the Deceased, namely Au Tung Kwong (“Au”) stated in his Declarations to the Labour Department that his daily wage was HK$1,300 but he started working at the Site from 29 December 2016, earlier than the Deceased.  Au said that prior to the accident, the 1^st respondent paid wages in cash on a daily basis and the 1^st respondent had made 5 payments of wages in cash to him for work done by him on 29 to 31 December 2016 and 2 to 3 January 2017. 

17.  Thus, it is clear that the Deceased earned HK$1,300 per day before the accident for the respondent s, albeit that he only started to work on the Site for the respondents on 2 and 3 January 2017.

18.  The issue in this assessment hearing is to work out the monthly earnings of the Deceased before the Accident ie: how many working days in a month did the Deceased work prior to the Accident?

METHOD OF CALCULATING THE EARNINGS OF SHORT-TERM EMPLOYEE UNDER THE ECO

The statutory provisions

19.  Based on the above evidence, I now proceed to ascertain the monthly earnings of the Deceased for the purpose of assessing his compensation under the ECO.

20.  In so doing, I also bear in mind that the purpose of enacting the ECO is to ensure an employee who has suffered injuries at work is given appropriate and reasonable pecuniary compensation. 

21.  Section 11 of the ECO provides the method of calculating the earnings of an injured worker:-

“(1) Subject to this section, for the purposes of this Ordinance the monthly earnings of an employee at the time of the accident shall be the earnings–

(a) for the month immediately preceding the date of the accident; or

(b) computed in such manner as is best calculated to give the rates per month at which the employee was being remunerated during the previous 12 months if he has been so long employed by the same employer, but, if not, then for any lesser period during which he has been employed by the same employer,

     whichever calculation is more favourable to the employee.

     ………

(2)  Where by reason of the shortness of the time during which an employee has been in the employment of his employer or of the casual nature of the employment, or of the terms of employment, it is impracticable to compute the rate of remuneration of such employee at the date of the accident, regard may be had to the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of a similar earning capacity in the same grade employed at the same work by the same employer, or, if there is no person so employed, by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district.” (emphasis added)

22.  Ms Ng submitted that in ascertaining the monthly income of the Deceased who was a causal worker who injured himself on the 2^nd or 3^rd day of his work, the court is entitled, to rely on the daily wages of HK$1,300 based on the evidence of the co-worker Au and the testimony of the applicant. 

23.  However, Ms Ng further submitted that as Au had only worked for 5 days for the 1^st respondent , the first limb of the s 11(2) of the ECO, namely “… regard may be had to the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of a similar earning capacity in the same grade employed at the same work by the same employer”is NOT applicable as that evidence only serves to establish the daily wage of HK$1,300 of the Deceased prior to the accident but cannot help to establish the average monthly earnings of a person of similar earning capacity in the same grade employed at the same work by the same employer. 

Case law

24.  Ms Ng then submitted that, in accordance with the Court of Appeal case of Lai Cheung Kwong v Lo King Sum & Another (黎祥礦 訴 盧景森及另一人), CACV 202/2007, [2008] 3 HKLRD 643 (Judgment in Chinese), the court can consider applying the second limb of s 11(2) of the ECO, namely “…, if there is no person so employed, by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district”.  Ms Ng specifically pointed out that Mr Justice Peter Cheung, JA in the said Lai Cheung Kwong case at paragraph 11 in particular said the said second limb of s 11(2) of the ECO include the employee himself.  Paragraph 11 is extracted as follows (original text as Judgment was in Chinese):-

“11.  本席認為在這情況下，申請人是可以依賴第11(2)的後半部分條文作為計算收入的方法。若果申請人沒有提出有關第11(2)前半部分條文所指的証據，即表示他未能證明有人如此受僱，這與第11(2)後半部分所說的「無人如此受僱」的情況吻合。申請人是可以引用條文所指「一名在相同職系中具類似賺取收入能力的人，在意外發生前12個月，受僱於同一地區，以擔任同類工作每月所賺取的平均款額」的方法計算收入。其實包括第11(2)條後部分在內的條文實質作用是提供計算收入的舉証方法。條文所述的這一名人士肯定包括申請人，由於申請人在意外發生之前所做的工作性質與發生意外時的相同，因此他可以根據他自己過往的收入來作為計算賠償的基數。本席認為在一般的情況下，以現時香港的環境，各個地區的相同性質工作的薪金差異都不會太大。本席認為以本案的情況，法庭引用第11(2)條的後半部分條文更能反映立法原意。” (emphasis added)

25.  Ms Ng also cited another Court of Appeal decision in the case of Or Wing Ming v Ho Bing Chi trading as Tin Kei Decoration Engineering Co, unreported, CACV No 319 of 2007 and another case Leung Wai Pong v Tang Hon Kong trading as Kin Wah Decoration Company, DCEC 237/2007 in support of her submissions in particular she referred to paragraph 19 of the case of Leung Wai Pong whereby His Honour Judge Lok (as he then was) summarised the following legal principles in assessing the monthly earnings of short-term employees, which are now extracted as follows in so far as s 11(2) of the ECO is concerned:-

(i)  if the injured worker only worked for a short period of time and there is no practical way to compute the rate of remuneration, the court has to adopt the methods prescribed in s 11(2) to ascertain his monthly earnings, and it is the duty of the court to make such factual finding based on whatever evidence before the court (per Yeung JA in Lai Cheung Kwan, para 37); and

(ii)  in order to assist the court in assessing the monthly earnings of short-term employees under s 11(2), practitioners should ensure that there is sufficient evidence before the court for the purpose of such assessment exercise (per Yuen JA in Or Wing Ming, para 31).

26.  Ms Ng submitted that, in applying the second limb of s 11(2), reference should be made to the Deceased’s average number of working days of 20 days a month prior to the accident.  Multiplied that with the daily wage of HK$1,300, the earnings of the applicant should be HK$26,000 a month.

27.  As the Deceased in the present case had himself injured on the 2^nd day of his work, it is clear that only s 11(2) is applicable.  Hence, the 2 Court of Appeal’s decisions are applicable.

Assessment of the evidence

28.  The evidence adduced by the applicant has been summarised above.  Based on the evidence before the court, I find that s 11(2) of ECO is applicable in particular the second limb or latter limb thereof.

29.  There are 2 methods of calculating the income under s 11(2): the first one is take the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of similar earning capacity in the same grade employed at the same work by the same employer; and the second one is, if there is no person so employed, to take the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district.

30.  While there is evidence from the co-worker Au, who is certainly a co-worker of similar earning capacity in the same grade at the same work by the same employer, his evidence is only helpful to the extent of establishing the daily wage of HK$1,300 of similar work nature done by the Deceased, and also Au’s evidence was that he had only worked for the respondents for 5 days, there is no evidence before the court about the earnings of similar skilled dismantling worker employed by the respondents during the 12 months before the accident, the first method of calculation is not applicable.

31.  For the second method, the applicant submitted that it should be HK$26,000 which is based on the average working days of 20 a month.  The evidence in support of such figure comes from the oral testimony of the applicant as the wife of the Deceased. 

32.  Having carefully considered the evidence, including the production of evidence which pointed to the fact that Au confirmed that daily wages of HK$1,300 were paid in cash by the respondents and the production of the Deceased’s bank passbook and the confirmations from the Inland Revenue Department and MPF Authority all pointed to the direction that there is no documentary proof as to the monthly wages of the Deceased, who did not deposit his wages into his bank account or pay any tax or subscribe to the Mandatory Provident Fund (“MPF”) (at the time of accident, the Deceased was 65 years old indeed, which is well over the compulsory age for subscribing to MPF). 

33.  As to the average number of working days, as the respondents, who were all along absent, had not adduced any evidence of a similar worker in the same grade in the same class of employment and in the same district, in such circumstances, the best evidence available is the testimony or evidence of the applicant who is Deceased’s wife, who testified the average working days of the Deceased should be 20 days a month.

34.  In my judgment, the appropriate figure to be adopted in the present case is HK$26,000, which is calculated on the basis of the average monthly working days of 20.  The reason for adopting such figure is that the Deceased was a dismantling worker with considerable experience, in fact of over 30 years’ experience, and therefore it is likely that he would have worked up to 20 days a month.  Indeed, I would think that 20 working days a month would be reasonable for a dismantling worker like the Deceased.  Hence, I calculate the Deceased’s earnings on the basis of 20 working days a month and arrive at the figure of HK$26,000 (HK$1,300 x 20 days).

35.  In such circumstances, the average monthly earnings of the Deceased should therefore be in the sum of HK$26,000 (HK$1,300 x 20 days).

Quantum of the compensation

36.  The Deceased was born in May 1951 and was aged 65 at the time of the accident and the appropriate multiplier for him under section 6(1) of the ECO is 36.

37.  The applicant incurred funeral expenses and other relevant expenses in the sum of HK$46,621.40 and claimed for this item under section 6(5) of the ECO.

38.  The quantum of compensation can therefore be summarised as follows:-

(i)     s 6(1) HK$26,000 x 36 months	HK$936,000.00
(ii)     s 6(5) claim (funeral etc)	HK$46,621.40
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Total:	HK$982,621.40

39.  The applicant also claim costs on common fund basis of these proceedings on the ground that the Deceased’s daughter is a mentally incapacitated person.

40.  The applicant is making the present application for herself and the only family member of the Deceased, a daughter, who is a mentally incapacitated person.

41.  In the application before me, I have been asked to apportion the judgment sum in equal shares between the application for herself and the daughter and to order that the sum apportioned to the daughter to be paid into court under Order 80 of the Rules of the District Court.  I have not, however, been asked to make any other direction.  Cases show that even with the best intention in the world, a family member could overlook some legal formalities that might cause problems in the future at the expense of a person under disability.  Pursuant to the seventh schedule of the Employees’ Compensation Ordinance, I hereby apportion the compensation adjudged to be payable in this case to be 50% to applicant Chan Yuk Chun and 50% to applicant Luk Chi Shing, and that the mens rea adjudged to the later to be paid into court.

42.  It is important before a large sum is authorized to be paid out to a family member, consideration should be given as to proper legal documentation to record and protect the interest of the person under disability. 

43.  One option is to direct an application be made under Part II of the Mental Health Ordinance.  Another option is for those acting for the applicant and the family members of the Deceased, to consider to apply under RHC Order 80 rule 12 after payment into court after the court has given judgment of for this case.

44.  Since this issue is of importance to the daughter, I am not going to express any conclusion in that regard since I have not heard arguments.  That point would have to be decided on another occasion.  I direct the applicant Chan Yuk Chun does take out an appointment before the Registrar to make further submissions in this regard, bringing with her evidence of the needs of the daughter and herself to enable the court to decide on what directions to give to safeguard the interests of the daughter.

45.  Hence, subject to the future direction, from this court for protection of the interests of the daughter, I grant judgment in favour of the applicants for the said sum of HK$982,621.40.  I also make the following orders:-

(i)  there be interest on the judgment sum at half judgment rate, from date of accident on 3 January 2017 to the date of judgment hereof and thereafter at judgment rate upon the judgment sum plus interest accrued from the date of judgment hereof to the date of payment.

(ii)  the costs of this action be to the applicant on common fund basis of these proceedings.

46.  Subsequent to the hearing and upon inquiry by the court, the court was informed by the solicitors for the applicant that the respondents may not have the means to satisfy the judgment sum and it is anticipated that the applicant will have to apply for payment of employees’ compensation from the Employees Compensation Assessment Board (“ECAB”).  Thus, those acting for the applicant have duly given notice of these proceedings to ECAB pursuant to section 25B(1)(a) of the Employee Compensation Assistance Ordinance when these proceedings were commenced.  ECAB has indicated that it would not take part in these proceedings and so, was also kept informed as to the progress of these proceedings, including the subject assessment hearing.

47.  I would remind the solicitors for the applicant to approach the Listing Office for this matter to be brought back to court for necessary directions as soon as possible, in accordance with paragraph 44 above. 

48.  Finally, I would like to express my gratitude to those acting for the applicant for all the assistance that they have rendered to this court.