TSE KWOK WAH v. CHEUNG LAP SANG trading as HOP LEE COMPANY AND ANOTHER

DCEC 1066/2020

[2025] HKDC 716

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1066 OF 2020

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IN THE MATTER OF AN APPLICATION BETWEEN

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JUDGMENT

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Introduction

1.  This is the Applicant’s claim against the 1^st and 2^nd Respondents (“R1 and R2”) pursuant to the Employees’ Compensation Ordinance, Cap. 282 (“the Ordinance”) for compensation under sections 9, 10 and 10A of the Ordinance.

2.  The subject accident happened on 17 September 2018 about 15:00 hours. The Applicant was assigned and instructed to assist in the unloading of boxes of fruits from a lorry at the warehouse situated at Wellcome Fresh Food Centre at No 9, Chun Kwong Street, Tseung Kwan O Industrial Estate, Tseung Kwan O, (“Warehouse”). The Applicant, together with other workers, was required to push the pallet truck out of the lorry while another worker七哥 (“Brother 7”) would use his legs to push. Suddenly, the pallet truck jerked forward. The Applicant lost balance and fell forward landing first with his right leg whereby the Applicant sustained personal injuries (“the Accident”).

3.  It was the Applicant’s case that at the time of the Accident, he was under the employment of R1 as a casual worker; and R1 was the sub-contractor of R2. The Applicant filed the Notice of Accident to the Labour Department on 19 October 2018 stating 新哥(“Brother Sun”) as his employer (whom he identified as R1).

4.  Pursuant to the Order of Her Honour Judge Levy, judgment was entered against R2 on 2 March 2022 with compensation to be assessed. In respect of R1, both liability and quantum are disputed.

5.  The issues in dispute are:

(a) whether R1 was at the material time the employer of the Applicant;

(b) the Applicant’s loss of earning capacity for the purpose of s. 9 compensation; and

(c) the quantum.

The Applicant’s evidence

6.  The Applicant testified and adopted the contents of his witness statement and supplemental statement as his evidence. His evidence can be summarized as follows:

(a) In August 2018, 光哥 (“Brother Kwong”) phoned him and told him that the boss of 錦哥 (“Brother Kam”) was short of manpower and needed to hire help because the frozen meat container in the Warehouse had broken down and the frozen meat had gone bad and needed disposal.

(b) He contacted Brother Kam who informed him on the phone that apart from disposing of the frozen meats, he needed to unload and remove goods for his boss too.

(c) On the first day of work on 13 September 2018, Brother Kam introduced his boss R1 to him. R1 agreed to hire the Applicant there and then.

(d) R1 and Brother 7 would give instructions to the workers as to whether they needed to come to work the following day. R1 had requested the Applicant to work for a few more days since it was the Mid-autumn festival.

(e) R1 would instruct Brother 7 to assign works to the workers and R1 himself would just supervise the unloading work.

(f) The tools including nylon rope and manual pallet trucks were locked up by Brother 7. Brother 7 was under the employ of R1 whom he addressed as boss and he took instructions from R1.

(g) R1 drove his private car to the Warehouse about 11 am. He would go away nearing the end of the day’s work and came back with money which he passed to Brother 7 who would then pay the day’s wages to the workers.

(h) R1 had driven the Applicant and other workers after work on those three days between 13^th and 15^th September and dropped them off in Tai Po.

(i) There was a typhoon on 16 September 2018 and in the morning of 17 September, the typhoon signal was lowered to No 3. The Applicant called Brother Kam to see whether he was required to work but Brother Kam asked the Applicant to call the boss directly. The Applicant got R1’s phone number from Brother Kam and called R1. R1 told him to wait and would call him back to confirm. R1 called back and told the Applicant to work that day on the phone. R1 then drove his car to Fanling to pick up the Applicant and drove him (together with another worker Ah Fai) to the Warehouse to work. The Applicant produced his phone record to show that he had indeed called Brother Kam first and then called R1 that morning. The record also shows that R1 did call the Applicant back.

(j) R1 was present during the Accident and had jokingly remarked that the Applicant should have just stepped on Brother 7. After the Applicant rested for a while, R1, after discussing with Brother Kam, decided that it would be better to take the Applicant to Northern District Hospital which would be more convenient for the Applicant’s follow-up. R1 then drove the Applicant to the Northern District Hospital and asked Ah Fai to check in with the Applicant.

(k) During his hospitalization, the Applicant tried to telephone R1 to enquire about compensation for his injuries. He tried to call R1 but R1 had apparently “blocked/removed” the Applicant from his phone contact list. There was no response from R1 despite the Applicant’s calls. The Applicant asked Brother 7 and Brother Kam to convey the message to R1 to pay compensation to him. R1 did not respond. Subsequently, the Applicant, together with other workers, went to protest at the Warehouse demanding them to follow up and disclose the identity of the contractor involved. Subsequently, R2 contacted the Applicant telling him that they had already submitted the accident report to the Labour Department and told the Applicant not to protest at the Warehouse anymore. Later, the Labour Department informed the Applicant that both R1 and R2 had submitted their respective Form 2.

7.  The Applicant also relies on the Form 2 submitted by both R1 and R2. In the Form 2, R2 stated that R2 was the principal contractor and R1 was the employer. R1 also filled in a Form 2 stating that R1 was the principal contractor and that Brother Kam was the Applicant’s employer.

Yuen Wai Kwong

8.  The Applicant also called Yuen to testify. Yuen’s evidence was that both him and Brother Kam were a 工頭, the workers’ head. They were not the boss. He was the one who referred the Applicant to contact Brother Kam because Brother Kam’s boss needed to hire casual workers. The wages of casual workers were paid on daily basis.

R1’s evidence

9.  In his witness statement (which he adopted as his evidence in chief when he testified in court), R1 stated, inter alia, that:

(1) R1 was only a truck driver and owned his own delivery truck. Being a mere truck driver, he did not participate in the unloading of the goods, nor did he give any instruction as alleged by the Applicant.

(2) R2 was a supplier of goods and was one of his clients in Mainland China. Normally, the mainland suppliers would need to arrange their own unloading workers for unloading their goods in the warehouse in Hong Kong.

(3) Since 2000, R1 had introduced the workers’ head Brother Kam to R2. Brother Kam himself had contracted various unloading and delivery work in different warehouses in Hong Kong. Subsequently, R2 subcontracted their unloading work in Hong Kong to Brother Kam. But R1 did not know the details of their agreement.

(4) When R1 got the goods from R2, he would drive the truck down to the Warehouse. Brother Kam would arrange for his workers to unload the goods from his truck. It was Brother Kam who arranged his own workers to undertake the unloading work. Upon completion of the unloading work, Brother Kam and his workers would go to other warehouse to do their work.

(5) Since R1 would drive his truck back and forth between China and Hong Kong everyday, Brother Kam would give the bill listing out his charges/fees for the unloading and delivery work every week to R1 and ask R1 to give it to R2. R2 would give the money to R1 who would then pass it to Brother Kam. R1 did it as a favour and was not involved in the dealings between R2 and Brother Kam.

(6) On the day of the accident on 17 September 2018, R1 arrived at the Warehouse and parked his truck at the unloading bay. As usual, he left the truck and waited for Brother Kam to tell him when they finished the unloading. He said he did not witness the occurrence of the accident. In the following paragraph (ie. paragraph 9) of his witness statement, R1 stated that after the alleged accident, R1 learnt from Brother Kam that the Applicant had demanded Wellcome at the Warehouse to pay compensation but Wellcome refused on the basis that the unloading work had been out-sourced to other people.

(7) He then went on to explain how he came to state in the Form 2 that R1 was the principal contractor. He said since R2 had stated that R1 was the direct employer and the Labour Department contacted him. At the Shatin office, he told the staff of the Labour Department about the relationship between Brother Kam, R1 and R2. The staff then told R1 that since R2 provided the relevant information about R1, R1 was R2’s subcontractor then. He himself did not know the meaning and liability of principal contractor and subcontractor. He just followed the staff’s instruction and filled in R1’s name as the contractor.

Credibility of witnesses

10.  There are serious factual disputes between the parties. Regarding the assessment of witnesses’ testimony, the parties have referred me to a number of authorities which set out the proper approach. I shall bear in mind those observations in assessing the evidence of the witnesses in the present case. It may be helpful to recite the observations summarised by DHCJ Eugene Fung SC in Hui Cheung Fai v Daiwa Development Ltd HCA 1734/2009, unreported, 8 April 2014 at §§77-83 :

(a) Contemporaneous documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility.

(b) In deciding whether to accept a witness’ account, importance should be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events.

(c) Regard should be given to the consistency of the witness’ evidence with the undisputed or indisputable evidence, and the internal consistency of the witness’ evidence.

(d) Care should be taken in drawing conclusions about truthfulness and reliability solely or mainly from the appearance of a witness or from the assessment of a witness’ character.

(e) Witnesses’ credibility should be tested by reference to the objective facts proved independently of their testimony, and regard should be given to their motives and to the overall probabilities.

Discussion

11.  On the first day of the trial, in the course of putting R1’s case to the Applicant, R1, through his counsel, supplemented the followings:

(a) R1 did receive a telephone call from the Applicant in the morning of 17 September 2018. In that morning, R1 did pick up and drive the Applicant (with Ah Fai on board) to work from Fanling to the Warehouse;

(b) R1 was present at the Warehouse when the Accident took place. R1 heard the noise or commotion he then went over to see what happened and he came to know that the Applicant had an accident;

(c) R1 drove the Applicant and Ah Fai to the Northern District Hospital for treatment.

12.  R1 was cross-examined on a number of matters. R1 initially affirmed that he only drove the Applicant once, which was 17 September 2018 and that before 17 September 2018, he did not know who the Applicant was and he had never talked to the Applicant. He explained that he was asked by Brother Kam to give the Applicant a ride on 17 September. He said he had turned down Brother Kam’s request, but the Applicant then called him directly to ask for a ride and he agreed.

13.  There does not seem to be any logic in the sequence of events as alleged by R1. One wonder why the Applicant would ask R1 to give him a lift to work when he did not even know R1? When R1 was questioned on this, R1 then changed his evidence and said for the first time that he had in fact driven the Applicant before 17 September but claimed that he did it only once. R1 was asked why he did not mention it in his witness statement. He said he did not know it was necessary for him to mention those matters in his witness statement.

14.  In R1’s witness statement, there was not a word mentioned about:

(1) R1 had driven the Applicant and another worker Ah Fai in his private car from the Warehouse to Tai Po after work;

(2) In the morning of 17 September, the day after the typhoon, the Applicant had telephoned R1 and R1 had also telephoned the Applicant back which led to the event that R1 drove his car to pick up the Applicant from Fanling station to the workplace.

15.  The major dispute in the present case relates to the relationship between the Applicant and R1. R1’s personal contact or interaction with the Applicant during the period when the Applicant worked at the Warehouse from 13^th to 17^th September are highly relevant matters. It is quite inconceivable that a witness or his legal adviser would consider it unnecessary to mention or fail to mention such matters.

16.  Looking at R1’s witness statement alone, it appears that R1 had little or even no contact with the Applicant from the time the Applicant started to work at the Warehouse to the time of the Accident. That would be consistent with R1’s case that R1 was a mere truck driver who had no contact with the Applicant and had no relationship with the Applicant.

17.  I agree with counsel for the Applicant that it is highly probable that R1’s failure to mention these important matters in his witness statement is deliberate. R1 intended to paint a picture that he had minimal contact/interaction with the Applicant to suit his case that he was merely a truck-driver and not the Applicant’s employer. It was only until the Applicant gave oral evidence and pointed out from his phone record that the Applicant did telephone Brother Kam that morning and then telephoned R1 at 08:07 and R1 called the Applicant back at 09:58, did R1 start to admit his telephone conversations with the Applicant in the morning of 17 September 2018 and other personal contacts/interactions with the Applicant.

18.  According to the Applicant, in the morning of 17 September 2018, the typhoon signal was lowered to No 3. The train service had not resumed. The Applicant called Brother Kam to see whether he should report to work but Brother Kam asked the Applicant to call and ask the boss directly. The Applicant got the telephone number from Brother Kam, he then called and asked R1 whether he was required to work that day. He said R1 told him to wait and R1 would call him back to confirm which R1 did and told the Applicant that he should work that day. R1 then drove his car (with another worker Ah Fai on board) to Fanling to pick up the Applicant and drove him to the Warehouse to work.

19.  The Applicant’s evidence is clear. It is logical and his evidence in this regard is consistent throughout. I have no hesitation in accepting the Applicant’s evidence and reject R1’s evidence in this regard. The train service had stopped in that morning and the Applicant could not get to the workplace. The Applicant asked R1 for instruction as to whether he was required to work that day. This shows that R1 had the authority to decide whether the Applicant should report to duty when the typhoon was lowered to signal No 3.

Payment of wages

20.  So far as payment of wages is concerned, R1 denied that he paid the wages to Brother 7 at the end of each working day. According to R1, he had introduced Brother Kam to R2 and R2 had subcontracted the unloading work to Brother Kam; R1 would pass Brother Kam’s bill for the unloading charges/fees to R2 on a weekly basis. R2 would place the money in an envelope and pass it to R1. R1 would not check the amount and would not even ask how much money inside. There was simply no record of how much money inside the envelope. R1 would simply bring the money back and give it to Brother Kam who would then give wages to his workers. R1 said he did it as a favour only.

21.  Firstly, if R1 were merely a truck driver, there was really no reason for R1 to assist in handling the payment of wages at all. Secondly, it does not make much sense that there was no record of the amount he received from R2 and that R1 did not even ask how much money there was inside the envelope. One big question is: If there were any shortfalls who would be responsible? If there were any dispute on the amount of money inside the envelop, how could that be resolved? R1 said that it was not necessary for him to know how much money he was given and that there would not be any dispute and in fact, there had never been any such dispute. I have no hesitation in rejecting R1’s evidence.

22.  I accept the Applicant’s evidence in this regard in that R1 went off at the end of the day’s work and came back with the money; R1 passed it to Brother 7 who would distribute the wages to the workers, including the Applicant himself, on a daily basis. This is another factor indicating that R1 was the Applicant’s employer.

Form 2

23.  In respect of the Form 2 filled in by R2 on 20 May 2019, it clearly stated that R2 was the principal contractor and R1 was the employer of the Applicant. R1, however, procured and obtained a clarification declaration from R2 dated 8 April 2020 which purportedly clarified that there was a mistake in the Form 2 in that R1 was the cross-border delivery company responsible for delivering R2’s goods to the designated location. The declaration went on to state that R2 was not able to confirm whether R1 was in fact the injured worker’s employer.

24.  Such purported clarification is ambiguous and is totally contradicted by R1’s own case in that R1 claimed that it was R1 who introduced Brother Kam to R2 and R2 engaged Brother Kam to be the contractor for unloading R2’s goods. If that were the case, there was really no reason why R2 would have made a mistake as to who was the employer of the injured unloading worker and, also, there was really no reason why R2 was unable to confirm who the employer was. I will not give any weight to the purported clarification declaration. I reject R1’s evidence that R1 had introduced Brother Kam to contract with R2 as the contractor for the unloading work at the Warehouse. If R1 really did, R2 would have no difficulty in identifying Brother Kam as the Applicant’s employer.

25.  When it came to R1’s own Form 2, he said that the particulars contained therein were wrong. He filled it in as instructed by the staff of the Labour Department. If R1 really were a mere cross-border truck driver who did not have any relation with the Applicant, one wonder why he did not see fit to send a clarification letter to the Labour Department, either by himself or via his lawyer. By the time he got legal advice, and by the time he asked R2 to send the said clarification letter to the Labour Department, he knew and ought to know that he could make correction or clarification and yet he did not do it.

26.  R1 admitted that he had never written to the Labour Department to make correction/rectification to his Form 2. When he was cross-examined on his failure to do so, he said he did clarify/ratify it verbally at his subsequent visit to the Labour Department. Such verbal correction/rectification was not mentioned in his witness statement. It is a bare allegation which was mentioned for the first time in the witness box. I have no hesitation in rejecting R1’s such evidence.

27.  Counsel for the Applicant also highlighted other inconsistent answers given by R1 in court, including:

(a) Whilst R1’s counsel confirmed on Day 1 of the trial that R1 knew Brother 7 but did not know him well. On Day 2 of the trial when R1 gave evidence, he said he didn’t know nor heard of Brother 7.

(b) He was not sure if Brother Kam owns any pallet jacks but later changed to say that Brother Kam had three pallet jacks (which confirmed the Applicant’s evidence).

(c) R1 stated in his witness statement that

「8. …在申請人聲稱意外發生的當天，即2018年9月17日，我到達惠康倉並將貨車停泊在卸貨區，然後如同平常一樣我離開貨車等候錦哥通知我卸貨完成。」When R1 gave his oral evidence in court and contrary to what he stated in his statement, he said he usually sat inside the truck after he parked his truck at the Warehouse.

28.  I do not find R1 an honest and truthful witness. I find the Applicant an honest and truthful witness. The Applicant’s oral testimony is in line with his witness statements. I accept the Applicant’s evidence regarding his various contacts/interactions with R1, the roles of R1, Brother Kam as well as Brother 7 in the course of work which was clear and consistent. I also accept his evidence about how the Accident took place and the subsequent events relating to his pursuit of compensation. On areas where there is conflict between the Applicant’s evidence and that of R1, I prefer the evidence of the Applicant.

29.  According to Poon Chau Nam v Yim Siu Cheung (2007) 10 HKCFAR 156:

“(a) The modern approach is to examine all the features of their relationship against the background of the indicia of employment with a view to deciding whether, as a matter of overall impression, the relationship was one of employment. This involved a nuanced and not a mechanical approach: painting a picture from the accumulation of detail. Including: -

degree of control exercised by the “employer”;

whether the person performing the services provided his own equipment;

whether he hired his own helpers;

what degree of financial risk he took;

what degree of responsibility for investment and management he had;

whether and how far he had an opportunity of profiting from sound management in the performance of his task.”

30.  Counsel for R1 highlighted that the Applicant provided his own working gloves and safety shoes. In the present case, R1 is not alleging that the Applicant was an independent contractor, but rather that the Applicant was in fact employed by Brother Kam. Hence, the issue is whether R1 was the employer or Brother Kam was the employer. The fact that the Applicant provided his own working gloves and safety shoes as pointed out by counsel for R1 is of little relevance in the present case.

31.  On the basis of the Applicant’s evidence, it is quite clear that R1 was his employer. On the first day of work, Brother Kam introduced R1 as the boss to the Applicant at the Warehouse. R1 agreed to hire the Applicant there and then. R1 and Brother 7 would give instructions to the workers as to whether they needed to come to work the following day. R1 had requested the Applicant to work for a few more days since it was the Mid-autumn festival. R1 would instruct Brother 7 to assign works to the workers and he himself would just supervise the unloading work. At the end of each working day, R1 would give cash to the workers’ head Brother 7 for the purpose of giving wages to the workers each day.

32.  The circumstances in which the Applicant sought instructions from R1 whether he needed to work on the 17 September; R1 gave his decision, and R1 came to drive the Applicant to the workplace in the morning of 17 September 2018 as described by the Applicant also show quite clearly that R1 had the authority to decide whether the Applicant should go to work on that day. I have no doubt that R1 was the Applicant’s employer and not Brother Kam.

33.  I am satisfied on a balance of probabilities that R1 was the Applicant’s employer at the time of the Accident and should be held liable to compensate the Applicant.

s. 18 Appeal: Loss of Earning Capacity (“LOEC”)

34.  According to the Certificate of Review of Assessment dated 3 March 2020 (“Form 9”), the Applicant’s injury was diagnosed as right tibial plateau fracture resulting in right knee pain, stiffness and weakness. The Applicant had been on sick leave from 17 September 2018 to 2 September 2020 and the LOEC was assessed at 7.5%.

35.  The Applicant appeals against the said assessment on LOEC under s.18 of the Ordinance. According to the medical report of Dr Lam Yan Kit (“Dr Lam”) dated 11 November 2021 (Specialist in O&T), he examined the Applicant on 7 October 2021, and the relevant parts of his findings are recited as follows:

“37. Muscle wasting of right thigh is noted …

42. Mr. Tse gave a history of right knee injury during work on 17 September 2018. He fell from a truck and injured his right knee. He was admitted into O&T Department of NDH. X-Rays and CT scan showed fracture anteromedial aspect of right tibial plateau. He was treated conservative with bracing followed by rehabilitation with physiotherapy. He had MAB done on 28 October 2019 and reassessment done on 20 January 2020. The right knee pain persisted. MRI of right knee was done in NDH on 17 March 2020, the MRI showed complete PCL (Posterior Cruciate Ligament) tear and tom posterior horn of medial meniscus. He received conservative treatment with physiotherapy till March 2021.

43. Based on the available information, the diagnoses of the accident should be:

a) Fracture anteromedial aspect of right tibial plateau.

b) Torn medial meniscus of right knee.

c) Complete tear of PCL right knee.

44. The PCL and medial meniscus tear should be related to the accident …

45. There is no known pre-existing condition given by Mr. Tse that may affect the outcome of treatment of the subject accident.

…

48. It is noted that the current X-Rays (which was taken 3 years after the accident) showed decreased medial joint space over right knee joint when compared to the left, this suggested early right knee joint medial compartment degeneration. As there is no significant degeneration in lateral compartment and in left knee, the medial compartment early degeneration is very likely to be related to the knee injury which had caused instability, anteromedial tibial plateau fracture and medial meniscus tear. Dr. Lam believes Mr. Tse is going to develop early ostheoarthritis of right knee joint requiring joint replacement surgery in future. …

49. … For reference, the degree of whole person impairment and LOEC is considered to be 10%.

…

51. Mr. Tse (The Applicant) should be unable to resume his pre-accident job due to the residual right knee instability and pain. He would be more suitable for sedentary type of jobs such as cashier or light duty jobs such as petrol station attendant.”

36.  In light of Dr Lam’s medical evidence, I allow the Applicant’s appeal and assess his LOEC at 10%.

Earnings

37.  Under s.11 of the Ordinance, earnings shall be the earnings for the month immediately preceding the date of accident or the average of 12 months, whichever is more favourable.

38.  It is the Applicant’s case that for the month immediately preceding the Accident, the Applicant earned HK$17,000 to HK$18,000. On average during the 12 months prior to the Accident, the Applicant was making HK$17,000 to HK$18,000. This is not challenged by R1. I shall take the average between HK$17,000 to HK$18,000, namely, HK$17,500 to be the Applicant’s monthly earning.

Duration of Sick Leave

39.  The Board certified the Applicant’s period of absence as necessary from 17 September 2018 to 2 September 2019 (see Form 9). There is no appeal against the sick leave period.

Compensation

40.  The Applicant was 51 years of age at the time of the Accident and is now 58 years old. There is no dispute that the multiplier applicable should be 72 months. For s.9 compensation, the amount should be:

HK$17,500 x 72 x 10% = HK$126,000

41.  According to the Form 9, the Applicant’s sick leave entitlement was 351 days. For s.10 compensation, the amount should be

HK$17,500 x 351/30 x 4/5 = HK$163,800

42.  According to the medical expenses receipts provided, the total medical expenses are HK$3,875. He also paid HK$90 for a stick. The total is HK$3,965. This is not disputed.

Summary

43.  The total amount of compensation is:

s. 9	$17,500	x 72 x 10%	$126,000
s. 10	$17,500	x 351/30 x 4/5	$163,800
s. 10A			$3,965
			________
		TOTAL:	HK$293,765

44.  The Applicant is entitled to interest on the sum of HK$293,765 at half the judgment rate from the date of the Application to the date of judgment and at judgment rate thereafter until payment.

45.  I shall make a costs order nisi that both R1 and R2 do pay costs of the Application, including any costs reserved, to the Applicant, with certificate for counsel, to be taxed if not agreed. The Applicant’s own costs be taxed in accordance with the Legal Aid Regulations. The said costs order nisi shall become absolute unless there is application by letter to vary the same within 14 days from the date hereof.

46.  Lastly, I thank both counsel for their helpful assistance.