LAU PUI MAN v. ETERNITY ENGINEERING LTD. AND ANOTHER

DCEC 419/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 419 OF 2001

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JUDGMENT

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1. This is an application by Madam Lau Pui Man under section 6(a)of the Employees' Compensation Ordinance, Cap 282 ("the Ordinance"). Madam Lau was the cohabitee of Tam Chung Cheung, the deceased, and she makes this application on behalf of herself and the members of the family of the deceased consisting of their son and the deceased's parents.

2. The 2nd Respondent was the contractor responsible for renovating the premises at No. 26 Hong Lok Yuen, West Road, Tai Po, New Territories. The 1st Respondent was sub-contracted by the 2nd Respondent to carry out the demolition work at the premises. The deceased was one of the three casual workers recruited by a Lam Ching Po upon the request of the 1st Respondent for a daily wage of $700.

3. On 19th October 2000 at about 2pm the deceased was dismantling a brick wall at the premises when a section of the wall collapsed on him. He sustained multiple injuries and died the same day.

4. Following the accident the 1st Respondent was charged with failing to provide and maintain a system of work for demolition works that was, so far as reasonably practicable, safe and without risks to health contrary to the Factories and Industrial Undertakings Ordinance, Cap 59. The 1st Respondent pleaded guilty and was convicted and fined $20,000 on 11th September 2001 at the Shatin Magistracy.

5. After the accident the 1st Respondent filed notice of the accident ("Form 2") pursuant to section 15 of the Ordinance in which the deceased was declared to be its employee. That the deceased was an employee and that the accident happened whilst the former was demolishing a wall at the premises was also admitted by Lau Kwok Hong ("Lau), one of 1st Respondent's directors, in his declaration to the Labour Department and statement to the police. I am satisfied that the deceased was an employee within the meaning of the Ordinance and that the accident arose out of and in the course of the deceased's employment.

6. According to Form 2 filed by the 1st Respondent, the deceased's earning was $14,000 per month. This figure was not challenged.

7. At the time of the accident the deceased was 28 years old. Under section 6(1)(a) of the Ordinance, the amount of compensation is either a lump sum equivalent to 84 months' earnings of the deceased or 84 times the amount specified in the second column of the Sixth Schedule (i.e. $21,000), whichever is the less. Therefore the amount of compensation under section 6(1)(a) of the Ordinance is $1,176,000.

8. Madam Lau has incurred $88,000 for funeral expenses. The Respondents do not challenge this item of expenses. Under section 6(5) of the Ordinance, the maximum recoverable is $35,000 and there shall be an award for his amount.

9. The Respondents did not challenge any of the evidence adduced on behalf of Madam Lau in respect of liability or quantum save that the 1st Respondent says that $100,000 should be deducted from the compensation to be made herein because the 1st Respondent had lent this sum of money to Madam Lau on 23rd October 2000. Madam Lau disagrees and gave evidence that this was a gratuitous payment from the 1st Respondent.

10. Madam Lau says she was approached by Chan Kam Hong ("Chan") from the Association for the Rights of Industrial Accident Victims at the mortuary and was told that the 1st Respondent should be responsible for her family's maintenance. Upon the instigation of Chan, a meeting with the 1st Respondent was arranged on 20th October 2000. The meeting was attended by, amongst others, Chan, Madam Lau, Lam Ching Po, Lau and a Mr. Chui. Although Madam Lau did not know who Mr. Chui worked for she understood he was from the 1st Respondent. Indeed the company search of the 1st Respondent shows that its other director, apart from Lau, was Chui Ping Fai ("Chui"). At that meeting Chan told Lau and Chui that they had an obligation to pay for the deceased's funeral expenses and maintenance to Madam Lau and had demanded the payment of $200,000. The meeting concluded with Lau and Chui telling Madam Lau that they would contact her with regard to the payment of money. On the 23rd October 2000 Madam Lau received a telephone call from Chui informing her that $100,000 had been raised and an arrangement was made to meet that evening for the money to be handed over. At the meeting, Lau gave Madam Lau $100,000 in cash and someone, she no longer recalls who, told her not to mention this sum of money to the Labour Department or the insurance company otherwise it will be deducted from any compensation made. Madam Lau was then asked to sign an acknowledgment of receipt which described the $100,000 as a loan (a copy of the receipt is at p200 of the bundle for hearing). According to Madam Lau, she was told that the boss of 1st Respondent was out of town and upon his return he would be consulted as to whether this sum of $100,000 could be treated as a gratuitous payment, in the meantime it will be treated as a loan. A few days later Madam Lau telephoned Chui to enquire about this $100,000 and was informed by Chui that that there was no problem. She understood this to mean that the boss of 1st Respondent had agreed the $100,000 be treated as a gratuitous payment. Madam Lau thanked Chui who told her to contact him should she required any assistance. There was no more contact between the parties thereafter. Having received the money from the 1st Respondent, Madam Lau lied to Chan and told him that the 1st Respondent had paid her $200,000 because she felt embarrassed lest Chan should intervene and demand the 1st Respondent pay the full $200,000. Madam Lau was very surprised when, a few days before the hearing for her application, she learnt from her lawyers that the 1st Respondent was demanding repayment of the $100,000. In fact she had never mentioned this sum of money to anyone, not even her lawyers, in light of what she was told when the money was handed to her.

11. It was suggested to Madam Lau in cross-examination that she had all along knew the $100,000 was a loan which had to be repaid. The 1st Respondent has not filed any witness statement nor called any witness despite its assertion.

12. I accept Madam Lau's evidence that that the money was a gratuitous payment. This is consistent with the fact that the 1st Respondent had at no time prior to this hearing demanded for its repayment. I do not accept the 1st Respondent's suggestion that the reason Madam Lau did not tell her lawyer about this sum of money was to avoid repayment. If Madam Lau was really as mercenary as the 1st Respondent suggested, she would have pressed the 1st Respondent for $200,000 as advised by Chan instead of accepting only $100,000. In addition she would have told Chan that she had only received $100,000 instead of lying to Chan to avoid the latter seeking more money on her behalf.

13. In the premises, I find that the sum of $100,000 was a gratuitous payment by the 1st Respondent for which Madam Lau need not repay.

14. The orders I make are as follows :-

a. Judgment be entered for the Applicant for the sum of $1,211,000.

b. There be interest on the sum of $1,211,000 at half the judgment rate from the date of the accident up to the date of judgment and thereafter at judgment rate until payment.

c. An order nisi that the costs of this application be to the Applicant, to be taxed if not agreed. This order will be made absolute at the expiration of 14 days from the date of handing down of judgment. The Applicant's own costs be taxed in accordance to legal aid taxation.

d. The judgment sum, interest and costs are to be borne by the 1st and 2nd Respondents jointly and severally.