HONG CHUN TAK v. YIP KAN KEE CONTRACTING CO LTD AND OTHERS

DCEC 849/2017

[2021] HKDC 352

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 849 OF 2017

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JUDGMENT

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1.  The applicant (“AP”) suffered an injury at work on 23 September 2015 when he was employed by the 1^st respondent (“R1”) to perform renovation work in a small village house located in Tsz Tong Tsuen, DD 83, Fanling, New Territories (“the Property”) owned by Madam Wat Yee Wai (“Wat”).

2.  At the time, the AP was using a pair of metal cutting scissors to cut a piece of metal frame used for the mounting of gypsum boards, and while doing so, he lost grip of the frame and the sharp edge of the frame cut the dorsal aspect of his right thumb and the extensor tendon of his right thumb was completely cut (“the Accident”).

3.  Unfortunately, the AP’s injuries turned out to be quite serious.  He was hospitalized and operated on repairing the tendon which was protected by K-wire.  He then underwent long periods of physiotherapy and occupational therapy.  He also suffered adjustment disorder psychiatrically.  The Certificate of Review of Assessment dated 10 September 2018 (“Form 9”) assessed the loss of earning capacity permanently at 3% and the period of absence from duty necessary as a result of the injury began from 23 September 2015 and up to 25 July 2018.

4.  On 19 April 2017, the AP commenced this application against R1 to seek employees’ compensation.

5.  On 28 March 2018, the 2^nd respondent (“R2”) was joined[1] and was claimed by the AP to be liable as the principal contractor under section 24(1) of the Employees’ Compensation Ordinance Cap 282 (“ECO”), which reads

“24. Liability in case of employees employed by sub-contractors

(1)         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.”

6.  On 18 October 2019, an interlocutory judgment on liability was entered against R1.

7.  On 15 May 2020, I allowed the application of the Employees Compensation Assistance Fund Board (“the Board”) for it to be joined as the 3^rd respondent but limiting its participation to appearing at this trial in respect of the issue as to whether R2 was a principal contractor.  I also allowed the Board to file the witness statement of Yip Chu Kan (“Yip”), who has been the sole director of R1[2].

The Property, the works, the issues and the parties’ respective case

8.  Concerning liability, the sole issue to be determined is the said issue of whether R2 was the principal contractor (“the Issue”).

9.  To understand the parties’ respective case, I need to briefly describe the Property and the renovation works.

10.  The Property was a small piece of land.  Two small simple village houses were erected on it.  One of them was shorter in height and in it was housed a kitchen and a toilet (“the Small House”).  The other was more a hut than a house.  It was taller and was built with metal sheets (“the Hut”).  The Small House and the Hut were very close to each other, maybe just 2 meters apart. The door of the Small House faced the Hut.

11.  According to R2, Wat had contracted with him to perform (a) water pipes and drainage work in the Small House, (b) the piping work of fresh water supply leading from the Small House to a connection point a distance away, and (c) to provide the proper drawings and documentations and to make an application on her behalf for the installation of a water meter for the supply of water to the Property (“the Water Works”). 

12.  According to Yip, the work R1 had contracted to do consisted of first dismantling the old wooden boards affixed to the ceiling and walls in the Hut and then mounting the gypsum boards onto the walls therein, as well as some minor work relating to a door inside (“the Work”).  It was during the performance of the Work that the Accident occurred to the AP.

13.  According to Yip and the AP, there were also some minor electrical works performed on the Property.  While R2 did not dispute that there were such minor electrical works performed there, he disputed that they were performed by workers engaged by him or that such were part of his contracted work.

14.  Succinctly, R2’s case is that he only contracted to undertake the Water Works, and having started those works and upon Wat’s enquiry, he introduced R1 to Wat.  Wat then dealt directly with R1 and engaged R1 to do the Work.  He was therefore not a principal contractor.

15.  The case of AP and the Board is that Wat had contracted all the renovation works of the Property to R2, which included the Water Works, the Work, the said minor electrical works and some other miscellaneous matters.  R2 then contacted Yip and then subcontracted the Work to R1.  Later, R2 also asked R1 to perform some additional painting work.

16.  All parties are agreed that the Issue is entirely a factual one, namely, whether R2 did contract from Wat the Work, among others, and then sub-contracted it to R1, or whether R1 contracted directly with Wat regarding the Work.

17.  Concerning quantum, R2 does not accept that the AP earned the amount at the time of the Accident as he claimed said that the compensation under section 10 as calculated by the AP was excessive.  I should mention that initially the AP appealed against the Form 9.  His appeal was withdrawn on 8 March 2019.

Representation and witnesses

18.  At the trial, the AP was represented by Ms Vanessa Kwok and the Board by Mr Gary Chung, both of counsel.  R1 did not appear.  R2 was represented by Mr Alex Fan of counsel on the first 2 days.  As the trial could not be finished within the 2 days allotted, a third day - 26 August 2020 - was scheduled.  For reasons that we need not go into here, I allowed R2’s application to re-fix the third day to 28 September 2020.  R2 acted in person on that day and had not lodged his written closing submissions, as further directed.  As all the submissions were written in English, I am delivering this judgment in English with an arrangement to interpret this judgment to R2 in Punti.

19.  The AP and R2 gave evidence for their own respective case, while Yip gave evidence for the Board.  At trial, the AP also sought to admit Wat’s Declaration as a piece of hearsay evidence.  It was opposed by R2.

Admissibility of Wat’s Declaration

20.  It is convenient for me to first rule on the admissibility of Wat’s Declaration.  The matter arose in this way.

21.  Up to 16 March 2020 when the Board applied to be joined as a party, the AP has not sought to call Wat as his witness.

22.  Earlier on by letters dated 26 September 2018 and 6 November 2018 and also through telephone calls made around the same time, the Board’s solicitors had tried to contact Wat with a view to calling her as a witness. These efforts were all to no avail.  In December 2019, the Board’s solicitors successfully contacted Wat who said she would provide a written statement. However, none was provided.  In the said application for joinder, the Board therefore did not further pursue its application for leave to file a witness statement of Wat.

23.  The AP’s solicitors on the other hand and by their letter dated 30 March 2020 to the court (which was a correspondence relating to the disposal on paper of the Board’s said application) indicated that they would subpoena Wat as a witness.  However, the AP only applied for the issuance of a subpoena duces tecum on 19 May 2020.  That was opposed by R2 by his solicitors’ letter dated 25 May 2020.  On 28 May 2020, this court gave the leave and the subpoena duces tecum was issued.

24.  At trial, Wat did not turn up to give evidence.  The court was informed that the AP’s solicitors were unable to effect the service of the subpoena on Wat.  Ms Kwok then sought to admit Wat’s Declaration[3] as a piece of hearsay evidence.  As said, R2 objected to it.  The Board merely adopted the stance and submissions of the AP and made no further submissions of its own.

25.  Wat’s Declaration consists of 2 pages.  It was handwritten written in Chinese with the heading “有關2015年9月23日位於祠堂村村屋內有人受傷之事故陳述” and stated therein to be written and signed by Wat dated 22 December 2019.  The court has read it de bene esse.  In it, Wat described how she was introduced to R2 and that she had contracted the renovation of the Property to R2 for a total sum of more than HK$200,000.  She listed the items of works listed in a quotation provided by R2.  A copy of the said quotation however was not attached to the Declaration.  The works listed by Wat there consisted more than the Water Works.  She also said R2 promised her orally to also perform some miscellaneous works not included in the quotation, and she also listed those. She also mentioned that she terminated the contract with R2 in November 2015 and also gave the reasons for it.  Importantly, she said twice in Wat’s Declaration that before terminating the contract with R2 she had not contracted with any other person to perform any renovation work on the Property, and that all the works on the Property were contracted to be performed by R2.

26.  It is common ground that the Declaration was sought to be admitted as a piece of hearsay evidence to prove the truth of the factual matters stated therein which otherwise could and should be testified to at trial by way of oral evidence, and that these factual matters were highly controversial. Evidently, the factual matters spoken to in the Declaration, if accepted, would be determinative of the Issue.

27.  Ms Kwok, on behalf of the AP, relies on section 47(1) of the Evidence Ordinance (“EO”):-

“47.   Admissibility of hearsay evidence

(1)  In civil proceedings evidence shall not be excluded on the ground that it is hearsay unless—

(a)  a party against whom the evidence is to be adduced objects to the admission of the evidence; and

(b)  the court is satisfied, having regard to the circumstances of the case, that the exclusion of the evidence is not prejudicial to the interests of justice.”

28.  Ms Kwok also cited in support the case of Lily Cheung v Cheung Wai Kwok[4]. There, the court refused to exclude the witness statements of the 1^st defendant who would not be able to give oral evidence at trial.

29.  Ms Kwok also relied on section 49(2) of the EO, which sets out the considerations relevant to the weighting of hearsay evidence.  Section 49(2) provides:-

“49. Considerations relevant to weighing of hearsay evidence

(1) In estimating the weight, if any, to be given to hearsay evidence in civil proceedings the court shall have regard to any circumstances from which any inference can reasonably be drawn as to the reliability or otherwise of the evidence.

(2) For the purposes of subsection (1), regard may be had, in particular, to the following—

(a)   whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness;

(b)   whether the original statement was made contemporaneously with the occurrence or existence of the matters stated;

(c)   whether the evidence involves multiple hearsay;

(d)   whether any person involved had any motive to conceal or misrepresent matters;

(e)   whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose;

(f)   whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight;

(g)   whether or not the evidence adduced by the party is consistent with any evidence previously adduced by the party.”

30.  Ms Kwok submitted that it was “impractical” to call Wat and that excluding Wat’s Declaration would be prejudicial to the interest of justice.

31.  For the reasons given below, I reject that submission.

32.  In my view, the consideration of this matter must begin with the general rule of evidence at trial, as clearly stated in O38 r1, thus:-

“General rule: witnesses to be examined orally (O.38 r.1)

1.        Subject to the provisions of these Rules and of the Evidence Ordinance (Cap. 8) and any other written law relating to evidence, any fact required to be proved at the trial of any action begun by writ by the evidence of witnesses shall be proved by the examination of the witnesses orally and in open court.”

33.  Lily Cheung was a probate action in which the plaintiff contested with the 1^st defendant (who was the plaintiff’s adopted father) and the 2^nd defendant (who was also adopted by the 1^st defendant and the deceased) for the right to obtain the Letters of Administration of the deceased, the alleged wife of the 1^st defendant.  After examining the relevant provisions in O38 and section 47 of the EO, Deputy High Court Judge Leung held that there existed a discretion of the court in admitting witness statements intended to be relied on as hearsay evidence.  The learned judge then refused to exclude the 1^st defendant’s witness statements because the 1^st defendant was 92 years old and his health condition had so deteriorated by then that he could no longer give oral evidence, and the 1^st defendant was the only person who could testify to his marriage to the deceased (which was disputed by the plaintiff).  Clearly pivotal to the decision was the fact that the 1^st defendant’s inability to give oral evidence was “a result of circumstances beyond his control”[5]. It is clear from the decision that such discretion was to be exercised rarely and in exceptional circumstances.  The learned judge highlighted that the case before him was an exceptional one in paragraphs 61 and 67 of the judgment, which introduced and concluded his said decision:-

“61.  The question is whether the statement should be excluded without prejudice to the interests of justice in the circumstances of the case. As mentioned, in the normal case where there is no excuse for the failure to call the witness or for the refusal of the witness to testify, the answer may be more apparent.

…

67.  This is of course the decision on the admissibility of the statements of the 1^st defendant in the circumstances of the present case.  Simple reliance on this decision to suggest the opening of a backdoor for admitting into evidence contents of statements of witnesses who are not called will be misplaced.”

34.  I find the case of Cheung Wei Man Vivien & Anor v Centaline Property Agency Ltd[6], a case cited by Mr Fan for R2, apposite.  There, the plaintiff filed a hearsay notice under s 47 of the EO for admission of an affirmation of a deponent who was in Malaysia and who did not wish to be cross-examined.  The defendants then took out a summons for an order not to admit the affirmation unless the deponent was available for cross-examination.  Lam J (as the learned VP then was) made an order in terms of the defendants’ summons, holding among others, that a party could not rely on s 47 and the then new rules as to admission of hearsay evidence to escape from the obligation of producing a deponent of an affirmation for cross-examination.  There, the affirmation evidence related to one very important factual dispute of the parties.  The learned judge observed that such evidence was highly controversial, and it was very difficult to assess the deponent’s credibility without any cross-examination.  The learned judge then concluded that unless the deponent was available for cross-examination, it would not be prejudicial to the interests of justice to exclude the affirmation.

35.  In the present case, in my judgment no exceptional circumstances were established justifying the proving of those factual matters by hearsay rather than by the examination of Wat orally in open court.

36.  The reason for and the circumstances surrounding the failure to serve the subpoena on Wat was explained through Ms Kwok[7] as follows, but no evidence was given thereon.  A clerk of the solicitors of the AP contacted Wat by phone on 29 May 2020 (a Friday, when the trial was due to commence on 2 June 2020, next Tuesday) and was told by Wat that she was suffering from cancer and was receiving chemotherapy and that she did not want to attend trial or receive legal documents.  There was then no further contact with Wat or any other attempt made to serve her with the subpoena.  There is thus no evidence showing the state of Wat’s health condition, not to say actual proving that she was actually made unable by her health condition to attend trial to give evidence.

37.  Moreover, there was this matter of delay on the part of the AP to apply for the subpoena.  There was no explanation proffered as to why the subpoena was not applied for any earlier than 19 May 2020.  Bearing in mind that Wat remained to a degree cooperative by providing and signing the Declaration and taking the telephone call from the said clerk, it seems to me that this case was no different from usual ones where an unmotivated independent witness would need to be formally summoned; but in this case the AP has failed to do in a timely manner.

38.  Ms Kwok contended that a hearsay notice was served to R2 on 20 March 2020, which R2 has not objected to.  I find that neither here nor there as the general rule is that stated in O38 r1 and it is only in exceptional circumstances, rather than as a matter of course, that a statement from a witness would be admitted as hearsay without calling the maker.   In any case, on 30 March 2020, which was 10 days after the hearsay notice was served, the AP has indicated by a letter to the court and copied to R2 that it would subpoena Wat.  Being so notified, it is not unsurprising that R2 did not voice any objection to the hearsay notice then.

39.  Regarding the AP’s reliance on s 49 of the EO, I take the view that unless, as a matter of first hurdle, it can be demonstrated that there are exceptional circumstances properly justifying a statement or witness statement to be admitted as hearsay evidence without calling the maker to attend trial to give oral evidence, the weight of the hearsay evidence does not fall to be considered; and therefore the reliance on s 49 of the EO is misplaced.  The weight to be attached to that statement or witness statement should not, of itself, be regarded as a factor justifying the adoption of such an exceptional course.  Indeed, the more important the factual matter to be proved and the more controversial the factual matter is, the more the reason in the interests of justice that the proving witness should attend trial to be examined orally in open court.  Therefore, I find it unnecessary to embark on the exercise of analyzing the application of the various considerations set out in s 49(2) of the EO, as Ms Kwok invited the court to.

40.  Rather, by reasons of the above and considering that the factual matters spoken to in Wat’s Declaration were so important and controversial, and there exist no exceptional circumstances justifying the admission of Wat’s Declaration as hearsay rather than calling Wat as a witness to prove those factual matters, and therefore justifying the deprivation of the opportunity to test and contest Wat’s evidence by R2, it would not be prejudicial to the interests of justice to exclude Wat’s Declaration.

41.  I would accordingly so exclude it and disregard all matters that were said therein.

Evidence and discussion on the Issue

42.  The AP evidence was that the day when he was injured was the second day he worked on the Property.  At that time, he did not know whether there was a principal contractor.  He was first told by Yip that there was a principal contractor on the occasion when he met with Yip several days after the Accident in Tsuen Wan when he gave Yip the sick leave certificates.  On that occasion, Yip did not tell him the name of the principal contractor, but said he would handle the matter for him to try to reach a settlement with the principal contractor.

43.  Sometime after the Accident and before he filed the Notification of Accident[8] to the Labour Department on 14 October 2015 (“the Notification”), the AP went back to the Property to take pictures for record.  There, he was told by a villager that the owner of the Property was one “Ms Wat” and he gave the AP Wat’s telephone number.  The villager also gave him a plan depicting the locality.  The AP then called Wat to enquire.  Wat only answered curtly that she had only engaged someone to renovate the Property and the person responsible for the renovations was surnamed “趙” and that this (the Accident) did not concern her.  The AP attached copies of the photo he took that day and the said plan to his supplemental witness statement.

44.  The AP explained[9] that at the time he filed the Notification, he could not write due to his right thumb injury, so a friend of his filled it out for him.  In section C of the Notification, originally the name of Wat was filled in as the principal contractor.  The AP was then told by a staff of the Labour Department that the owner of the Property should not be named as the principal contractor, he therefore crossed out Wat’s name and address and wrote thereon instead “判上判, 趙生” because Wat told him in the said telephone call that the one responsible had the surname “趙”.

45.  Concerning whether at the time there were other works carried out on the Property and, if so, by whom, the AP could only remember there were one or two workers not employed by R1 who was performing electrical works.

46.  When giving evidence, the AP was attentive, direct, spontaneous and straight forward.  I believe he was telling the court the truth as best he could remember it.  He was not shaken in cross-examination.  Particularly, his evidence about how he came to contact Wat and what Wat told him was consistent with the alterations that were made in the Notification and his explanation as to why these alterations were made.  I find him a credible and reliable witness.  I accept his evidence as set out above.

47.  Yip, in his witness statement filed on 18 May 2020, gave a detail account with specific dates as to how R2 subcontracted the Work to R1.

48.  He said he was contacted by R2 in early September 2015 about the Work on the Property.  Then on 9 September 2015, he met up with R2 who took him to the Property to take a look for the purpose of giving a quote.  In oral evidence, he added that he and R2 went into the Hut and that R2 described to him what the works to be done were while he took the measurements.  He then quoted the price of HK$20,000 for the Work which was agreed to by R2.  Yip then said that R2 gave him HK$10,000 as the first payment.  Then on 14 September 2015, Yip purchased the materials and together with the AP transported the same to the Property.  Then R1 sent the AP and another worker named 羅永恆 to start working in the Hut on 22 September 2015.

49.  In his witness statement, Yip also set out all the details regarding payments by R2.  Yip said that later on R2 asked that certain additional painting work be done on the Property.  He and R2 agreed the price for this additional work at HK$5,000.  He then arranged a worker named 林健飛 (“LKF”) to go to the Property to do the painting work.  Yip said that on 12 October 2015, R2 on the Property paid to LKF HK$10,000 in cash being the balance of the price for the Work. Then on 20 October 2015, R2 paid the price of HK$5,000 for the additional painting work by directly transferring the sum into the bank account of LKF.

50.  In oral evidence, Yip said that on the occasion he visited the Property for the purpose of giving a quote, he saw workers working on the ceiling of the Small House and undertaking electrical work and R2 was giving instructions to them.

51.  Yip categorically said that he had never even met Wat, not to say having dealt with her directly or having been engaged by her to perform the Work.

52.  I would observe at this juncture that Yip was direct, spontaneous, clear and firm when giving evidence.

53.  R2 in his witness statement dated 17 October 2019 (“WS1”) said that after he had begun to undertake the Water Works, Wat inquired with him as to whether he would undertake renovation works other than water pipes and drainage work. As non-water works were “obviously” and “totally” outside his knowledge and skills, he introduced his friend Yip to Wat.  Thereafter and at all times, Wat contacted and discussed directly with Yip about the content, scope and the price for such non-water works.

54.  In WS1, R2 said many times and emphasized that he had never asked, nor had he the right to ask, nor did he know anything about such non-water works. In paragraph 8 of WS1, R2 listed 7 items that he did not ask or know about the non-water works undertaken by Yip, including what building materials and equipment Yip used, whether Yip or R1 had arranged or engaged employee(s) to perform such non-water works on the Property.  In paragraph 15 of WS1, R2 specifically said that he did not know whether the non-water works consisted of the mounting of gypsum boards, or whether any one actually performed such work on the Property or who performed such work.

55.  In his supplemental witness statement filed on 29 May 2020 (“WS2”) in response to Yip’s witness statement, R2 denied everything that Yip said and added

a.  that this occasion was the first time he introduced a client to Yip;

b.  because he and Yip were friends, he never wished to engage in a superior/subordinate relationship with Yip and therefore he had never sub-contracted any work to Yip;

c.  at the time when Yip (or R1) started working on the Property, the Water Works were completed up to 70 to 80%.  He himself has all along been focusing on his own work and did not notice if anyone else was working with Yip there; and

d.  he himself all along was working outside the house(s) on the Property, while Yip was working inside the house(s) all the time.

56.  Three days later on 1 June 2020, R2 filed his 2^nd supplemental witness statement (“WS3”).  In WS3,

a.  R2 clarified that in WS2, when he said he was all along working outside the house(s), he meant he was working outside the Hut; and when he said Yip was working inside the house(s), he meant that Yip was working inside the Hut;

b.  R2 reiterated that, in all, he knew nothing about the works performed or the situation inside the Hut; and

c.  In paragraph 8, R2 supplemented the details about his introduction of Yip to Wat.  He said that

i.  when Wat made the relevant request, the Water Works were essentially completed, at the time the only item not completed was the application for the installation of a water meter on behalf of Wat;

ii.  after Wat made the request, on a day, the date of which he could not remember, he arranged to take Yip to the Property.  After introducing them to each other, he left.  He had not participated in their discussion and did not know its contents; and

iii.  that day, Yip and Wat were talking face to face standing on the open ground between the Small House and the Hut.  He did not know whether they had contacted each other since.

57.  Having observed and heard R2 when he was giving evidence, I was not impressed at all by him as a witness.  He was often evasive.  As set out and discussed below, he gave contradictory accounts on many occasions, and some of his evidence on important matters was inherently implausible or highly improbable:-

a.  When cross examined by Mr Chung as to whether he was present when Yip was working on the Property, R2 initially answered: “唔喺度，唔清楚”.  R2 then clarified in the next answer that he himself was not there.  Then in answer to the court’s clarification questions, R2 said firmly that on no occasion were he and Yip present on the Property at the same time.  Mr Chung then confronted R2 with what he said in WS2 and WS3 that he was working outside the Hut all the time while Yip was working inside the Hut all the time (see paragraphs 55 and 56 above) and asked that if he was not present, how would he know that Yip was working in the Hut all the time.  R2 then said that he was working in the Small House, he was not sure and he was only guessing.  When pressed further, R2 said that he could not now remember.  Later on, when Mr Chung confirmed with him his evidence in the context of whether he knew what Yip was doing on the Property, R2 confirmed that it was his evidence that he had seen Yip on the Property, but he did not pay much attention to what he did.  In re-examination, R2 was reminded of the various answers he had given and was asked if indeed he saw Yip on the Property, he answered: “因為係我介紹佢做裝修，估係好正常。”.  Whether he had been present with Yip together on the Property is a straight forward matter on which R2 should have no difficulty in giving a direct answer one way or the other according to what he could remember, but as set out above, he gave convoluted and contradictory answers and versions.

b.  R2 was asked whether Wat had mentioned what kind of renovation works she had in mind to do when she asked R2 whether he also undertook other renovation works.  R2 said that she did not.  When pressed that if the nature and some details of those works were not mentioned, how could R2 know that they were outside his knowledge and skill, R2 maintained that he was skilled only in water works, anything else would be outside his skills.  When further pressed, he insisted that he himself also had not asked Wat, nor was he interested to find out about them so as to see if he could take those up and then engage workers skilled in those works to perform them, nor did he need to know them before he could introduce the right person to Wat or to relay them to Yip to get him interested so that he would travel all the way to the Property to discuss with Wat.  Clearly, it must be most natural in the course of things for Wat to mention, or R2 to ask, at least some basic information about the renovation works during the conversation.  It is highly improbable that R2 was not interested in taking these additional works on and then engaging workers skilled in those matters to perform the works, so that he could earn a profit therefrom.  It is a matter of common sense, and R2 being such an experienced contractor would know, that whoever he had in mind to refer the work to would need to be given some basic idea of the scope and kind of renovation work, such that one would expect R2 would ask Wat for the purpose of making the referral.  Yet, R2’s version is none said, none asked.  In my view, R2’s such version of the conversation between him and Wat is wholly artificial, inherently implausible and highly improbable.  I have no hesitation to reject it.

c.  In WS3, R2 said that he left after having introduced Yip to Wat, but in the next sub-paragraph in paragraph 8 there, R2 said that Wat and Yip stood on the open ground between the Small House and the Hut to discuss.  When cross-examined, R2 first said that he stayed for another 10 to 20 minutes after the introduction.  When further asked as to whether Wat and Yip stayed on the open ground the whole time for those 10 to 20 minutes, R2 did not give a straight answer and evaded those questions by giving irrelevant answers.  It was only when the question was repeated a third time did he give a direct answer that they were standing on the open ground for all that time.

d.  As have set out above, in WS1, WS2 and WS3, R2 has taken pains to emphasize and go to great details to show that he knew nothing whatsoever about the Work.  In cross-examination, R2 further maintained that even though he and Yip were friends, they had no conversation with Yip about the Work and that while on the Property he had paid no attention whatsoever about the Work.  He explained in cross-examination that he did not care about things that were outside his skill and expertise.  I find R2’s claim that there were no such conversations or that he did not pay such attention artificial, highly improbable and hard to believe.  As mentioned, the Property was only a small plot of land, the door of the Small House faced the Hut and they were just about 2 meters apart.  September and November are hot months and one can hardly imagine whoever working in the Hut would keep the door tightly shut and not open it for ventilation.  In other words, this court finds it most hard to believe that, even if R2 had no conversation with Yip or anyone about the Work or that he had not have gone into the Hut even for once (as he claimed, and this court disbelieves), that he had not nevertheless noticed that gypsum boards were being mounted in the Hut, or that materials for that purpose were transported to and kept on the Property, or that there were other workers engaged by Yip and such.  R2’s claim that he has absolutely no knowledge about all these matters relating to the Work is so highly improbable and totally incredible.  I do not believe or accept it at all. 

e.  From what I have set out above in paragraphs 55 and 56 as to what R2 said concerning the timing when Wat asked him whether he would do other renovation works, it would be noticed that there were 2 versions given in WS2 and WS3, which were filed just only 3 days apart.  In the former, R2 said that 70% to 80% of the Water Works had completed, while in the latter he said that all were completed except for the application for the water meter.  In oral evidence, R2 yet gave a different version with details hitherto unmentioned. He said that at the time the copper water supply piping inside the Small House was not finished and he then gave vague descriptions of the unfinished piping being certain sections of piping leading to the sink and such.  This was amidst the backdrop of whether he was present on the Property with Yip and whether there were other works performed on the Property.  Naturally, if the Water Works were then essentially finished except for the application for the water meter (as he said in WS3), there would be no work for R2 to perform and therefore no reason for him to be on the Property.  Later on, when crossed-examined by Ms Kwok, R2 said that he had engaged a casual worker Mr Chu who was present on the Property all the time and who could attest to his version (yet R2 had not called him as a witness).  When asked whether workers had performed work on the ceiling of the Small House, R2 answered “好似，唔清楚”, and then later on, he modified his answer and said “冇，我唔識做，一定冇”.  As to whether there were electrical or painting works performed on the Property, R2 answered that he did not noticed.  Again, I find it hard to believe that R2 would not have noticed whether there were or were not such works performed.  I find his answer as to whether there were other works performed on the Property evasive.

58.  The above were just the more prominent instances.  In all, I am of the clear view that R2 was an unreliable and incredible witness.  I agree with Mr Chung’s submission that R2 had been making up stories and continued to do so when giving oral evidence.  I completely reject R2’s evidence where it conflicted with that of the AP and Yip’s.  I also reject his claim that in all his years as contractor he only engaged exclusively in water pipes and drainage work and not any other renovation works.

59.  In cross-examination, Mr Fan for R2 repeatedly insinuated against Yip that he was giving untruthful evidence to make R2 liable so that he himself or R1 might be relieved of the responsibility to pay the compensation.  There was however no specific factual matters or circumstance put to Yip to base such criticism on.  Mr Fan also confirmed with the court that there was no allegation that the AP was colluding with Yip or R1.  It was also not disputed that as a matter of law even if R2 were found liable, R1’s liability remained and would not be lessen, as R1 and R2’s liabilities to pay the AP the compensation were several.  In the premises, there is simply no basis for such criticism and I so find. 

60.  On the contrary, this court finds Yip a credible and reliable witness. As said, he gave direct, spontaneous, clear and firm answers in oral evidence. The evidence he has given in his witness statement was cogent and detailed.  By giving evidence on the exact dates and events, as well as detail accounts about how various payments were paid by R2 to R1, Yip has given R2 an opportunity to contest specifically, such as to produce bank statements to show that there was no bank transfer to LKF of HK$5,000 on 20 October 2015, or produce evidence to show that R2 has not visited the Property on 9 September 2015 and so on.  It is very telling that no such specific contest was mounted, or specific evidence proffered to rebut.  Instead, in WS2 and WS3 R2 only barely denied everything Yip said, bolstered his claim that he knew nothing whatsoever about the Work, and explained that because they were friends, he would not sub-contract work to Yip; and at trial, R2 mainly attacked Yip based on the said criticism.  In all, I accept Yip’s evidence as set out above.

61.  Based on the AP’s evidence, particularly regarding what Wat told him, and Yip’s evidence, which I accept, I find the following.  R2 was the only person engaged by Wat to perform all the renovation works on the Property and the 2 houses thereon, such renovation works included the Water Works, the Work, certain electrical work and the ceiling in the Small House.  R2 then sub-contracted part of the renovation works, namely the Work, to R1 for the sum of HK$20,000.

62.  In the premises, I find that R2 was a principal contractor within the meaning of section 24 of the ECO and I hold that R2 is severally liable with R1 to pay the AP the employees’ compensation, as assessed below.

Compensation under section 9 of the ECO

63.  As there is no appeal under section 18 of the ECO by R1 or R2, and the AP’s appeal was withdrawn, I will assess compensation based on Form 9, in which the AP was assessed to have suffered 3% loss of his earning capacity caused by the injury.

64.  R2 did not accept the evidence of the AP and Yip that between the time when the AP was first employed by R1, namely on 25 August 2015, until the date of the Accident on 23 September 2015, the AP worked for 21 days at the daily wage of HK$1,000 a day.  The AP further said he was provided lunch by R1 at HK$70 to $80 per day.  Their such evidence was tested in cross-examination by Mr Fan.  Their such evidence was not shaken.  Having found that the AP and Yip were credible and reliable witnesses, I accept their evidence regarding the AP’s income.  I find that the AP’s monthly earnings to be (HK$1,000 + HK$75) x 21 days = HK$22,575.

65.  The AP was aged 46 at the time of the Accident.

66.  The compensation to be awarded to the AP under section 9 of the ECO is HK$22,575 x 72 x 3% = HK$48,762.

Compensation under section 10 of the ECO

67.  In Form 9, it was assessed that the period of the AP’s absence from duty necessary as a result of the injury was from 23 September 2015 to 25 July 2018, a total of 1,037 days.  Deducting therefrom the statutory holidays in that period of a total of 35 days, the absence from duty were 1,002 days, which were more than 24 months.

68.  Periodic payment for a further period not more than 12 months beyond a period of 24 months pursuant to section 10(5) of the ECO was prayed for in the Application herein.  Having been so claimed against, neither R1 or R2 lodged an appeal under section 18 of the ECO.  In R2’s written opening submissions it was said that the AP’s calculation was excessive and two High Court personal injury cases concerning the court’s consideration of the sick leave certificates issued by the treating doctors[10] were cited in support.  It is however well established that the assessments in Form 9 are conclusive in the absence of an appeal under section 18[11].

69.  In the circumstances, I will allow compensation under section 10 to cover the entire period as assessed in Form 9.

70.  The compensation to be awarded to the AP under section 10 is: HK$22,575 x 1,002/30 x 4/5 = HK$603,204.

Medical expenses under section 10A

71.  Ms Kwok has tallied the medical expenses as evidenced by the receipts in a table annexed to her opening submissions.  They total to HK$5,280. The amount was not disputed by R2.  I so award.

Disposal

72.  It is common ground that R1 had paid to the AP periodic payment and medical expenses in the total sum of HK$10,671, and credit will be given for this sum.

73.  In the premises, I will enter judgment against R1 and R2, who are severally liable for the same, in the sum of HK$646,575 (HK$48,762 + HK$603,204 + HK$5,280 – HK$10,671) together with interest thereon at half judgment rate from the date of the Accident to the date of this judgment.

74.  The court has a wide discretion on costs.  Presently, I take the following provisional views regarding the costs position in respect of each party, and would make the costs order nisi underlined below:-

a.  R1 did not take any part to contest the assessment of the compensation.  As can be seen above, the time and costs spent on matters concerning quantum are minimal.  Had it not been pursuing the claim against R2, and only the assessment of compensation against R1 in his absence was proceeded with, the hearing would be short, few documents would need to be referred to and counsel’s attendance probably not necessary.  It is thus fair that R1 should only pay the AP’s costs reflecting such a scenario.  I am minded to summarily and in a broad-brush manner assess a lump sum rather than have such costs taxed.  On a nisi basis, I order R1 to pay the applicant’s costs of the assessment of compensation against him summarily assessed at HK$35,000.

b.  The costs against R2 should follow the event.  However, I am not entirely satisfied with the whole scenario as to how the AP issued the subpoena against Wat late and then attempted by a side-wind to admit Wat’s Declaration as hearsay.  It was not fair nor of merits.  This matter has taken up substantial portion in the AP’s opening and closing written submissions, in R2’s opening submissions and the AP’s cross-examination of R2.  R2 successfully excluded Wat’s Declaration.  Appropriate costs provision should, in my view, be made in favour of R2 reflecting his success.  On a nisi basis, I order R2 to pay 90% of the AP’s costs of his claim against R2, with certificate for counsel, to be taxed if not agreed.  The AP’s own costs are to be taxed according to the Legal Aid Regulations.

c.  The Board asks that R1 and/or R2 pay its costs with certificate for counsel.  The Board has behaved properly and reasonably within its role and function and this court has been ably assisted by Mr Chung, appearing on behalf of the Board.  As reasoned and held by Ribeiro PJ in Wo Chun Wah v Employees Compensation Assistance Fund Board (2019) 22 HKCFAR 495, “… where the Board has been joined as a party and properly carries out its “filtering” or monitoring functions, the appropriate starting point should generally be no order as to costs …”[12]. Presently, I do not find any particular conduct on the part of any party that would justify a departure from this starting point.  Moreover, I bear in mind that R2 by losing has to bear the AP’s set of costs and that there was no fault or doing on his part that has caused the Board to intervene (in fact, he tried to resist it).  If he is ordered to pay the Board’s costs as well, then he would be paying 2 sets of costs through nothing of his making.  In the circumstances and on a nisi basis, I will make no order as to the Board’s costs.

75.  The above costs order nisi will become absolute unless any party applies to vary within the next 14 days by letter, stating therein the precise form of costs order that the party seeks, and I will issue paper directions for further conduct.

76.  It remains for me to thank Ms Kwok, Mr Fan and Mr Chung for their assistance.

77.  My clerk will make arrangement with R2 at the time of handing down of this judgment for it to be interpreted to him in Punti.

For hearing on 2-3 June 2020

For hearing on 28 September 2020