TONG CHUN HO v. CHAN SIU CHEUNG t/a FLYING EAGLE ENGINEERING CO. AND ANOTHER

DCEC 867/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO.867 OF 2001

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JUDGMENT

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1. This application for employees' compensation arose out of an accident that took place on 25 December, 1999. At the time of the accident, the Applicant was employed by the 1st respondent as an electrical technician. On 25 December, 1999, the applicant was working in the course of his employment with the 1st respondent in the main switch room located on the ground floor of the Library Complex of Hong Kong Shue Yan College. While he was so working, there was an explosion at a switchboard inside the room. As a result, his hands and face were burnt, and he sustained personal injuries. He was granted sick leave from 25 December 1999 to 22 May 2000.

2. By a Certificate of Assessment issued on 7 September 2000, the Applicant was assessed by the Ordinary Assessment Board to have a 3% loss of earning capacity. On 14 September, 2000, a Certificate of Compensation Assessment was issued and the total amount of compensation payable to the Applicant was certified to be $139,776.00. In the original notice of application, the 2nd respondent was also sued by the applicant as the principal contractor of the 1st respondent. By a consent order made on 7 May, 2002, the claim against the 2nd respondent was withdrawn.

3. There is no dispute between the parties about the 1st respondent's liability to pay compensation under the Employees' Compensation Ordinance to the applicant. Nor is the amount of compensation (namely, $139,776.00) in issue. The trial turns on a narrow compass. In essence, the question is whether the 1st respondent has already paid up the compensation in question.

The 1st respondent's case

4. The 1st Respondent runs his own business in plumbing and electrical installations under the style of Flying Eagle Engineering Company. The applicant was employed by him as an electrical technician. He came to know the applicant about a year before the accident through the introduction of his worker. In late 1999, the 1st respondent was engaged by the 2nd respondent as its sub-contractor to carry out certain electrical works at the library of Hong Kong Shue Yan College. On 25 December, 1999, the applicant was assigned to do the job. While he was performing his duty, the explosion occurred and his hands and face were badly injured.

5. After the accident, the applicant received a total sum of $23,600.00 being part of the compensation between January, 2000 and March, 2000 from the 1st respondent. Initially the 1st respondent said that the amount in question should be $27,200.00. Later on he changed it to $26,800.00. Eventually, he accepts at the trial that the figure should be $23,600.00.

6. According to the 1st respondent, on a date in May or June, 2000, he was requested by the 2nd respondent to ask the applicant to sign some pay slips so as to process his claim. When he talked to the applicant about this, the applicant complained that the 1st respondent had not paid him three quarters of his wages. As a result, the 1st respondent paid to the applicant a sum of $45,000.00 in cash when they met in Bute Street, Mongkok, Kowloon. The 1st respondent says that he rounded the sum up to $45,000.00 to make up for the shortfall, and after he made the payment, the applicant signed his name on a number of pay slips covering the period between August, 1999 and May, 2000. He says that he had so much cash on that day because he had received some cash payment for a job he was engaged to do in Golden Shopping Arcade. It, however, did not cross his mind to ask the applicant for a receipt.

7. Then in early, 2001, one Miss Tam of the 2nd respondent told him that the cheque for the payment of the compensation would only be issued after the applicant signed a document to confirm that he had already received full payment of the employees' compensation. Later on, he was asked by one Mrs. Wong of the 2nd respondent to bring the applicant over to sign an acknowledgement of receipt. In early March 2001, he met the Applicant at a restaurant in Mongkok and gave a sum of $60,000.00 in cash to the Applicant. He told the applicant that the total amount he had paid him was $131,800.00 comprising the sums of $26,800.00, $45,000.00 and $60,000.00, and there remained a shortfall. In reply the applicant said that he would waive the balance as the accident had caused the 1st respondent to lose the business of the 2nd respondent and his injuries was attributable to his own carelessness. The sum of $60,000.00, says the 1st respondent, also came from a job in Golden Shopping Arcade.

8. After the applicant received the sum of $60,000.00 in cash, they went up to the 2nd respondent's office at Quarry Bay, where they met Mrs. Wong. They were told by Mrs. Wong that there would be a further payment for a few hundred dollars for medical expenses to the Applicant, and the payment would be issued to the 1st respondent's firm. The Applicant then signed the acknowledgement confirming that he had received the full payment of the compensation. He had also verbally confirmed it to Mrs. Wong.

9. After the meeting, they went to a restaurant where the 1st respondent gave the applicant a blank personal cheque which he signed. The cheque was for the payment of the medical expenses after the 1st respondent received it from the 2nd respondent. As they did not know the exact amount of the payment, the 1st respondent did not fill in any figure. This, says the 1st respondent, would save them the trouble of meeting up again. About 3 weeks later, the 1st respondent received a sum of $139,776.00 from the 2nd respondent. However, a cheque for $600.00 odd which was earmarked for the medical expenses was made payable to the applicant. As the applicant appeared to be busy, he then deposited the cheque into the applicant's bank account. He made an attempt to pay the cheque into the Applicant's account with the Bank of China, but it was unsuccessful as the account was already closed. At last, he had to phone up the Applicant and obtain his account number with the Bank of East Asia, Limited in order to make the payment. The 1st respondent also told the applicant to tear up the signed blank cheque which he gave him at the restaurant, and the applicant agreed to do so.

10. The 1st respondent also called Mr. Tse Ka Tai as his witness at the trial. Mr. Tse is a manager of Golden Shopping Arcade. According to Mr. Tse, he had seen the 1st respondent working for the shops inside the shopping arcade. The 1st respondent has also produced 2 contracts and their supporting documents in order to show that he was engaged to carry out works in Golden Shopping Arcade when he made the 2 payments to the applicant in about May/June, 2000 and March, 2001.

The applicant's case

11. The applicant says that he has only received a total sum of $23,600.00 from the 1st respondent. He denies that he has ever received the sums of $45,000.00 and $60,000.00 from the 1st respondent as he claims. He disputes the authenticity of some of the pay slips. He says that he had signed about 10 pay slips, but now he cannot tell exactly which one was signed by him. He says that he signed them because the 1st respondent told him that they were for taxation purpose.

12. In early March, 2001, at the request of the 1st respondent, he went to the office of the 2nd Respondent in Chai Wan with his wife. On that occasion, the 1st respondent was not present, and he was asked to sign an acknowledgement of receipt of a sum of $140,440.00. After he did so, he felt very uneasy about it as he had only received $23,600.00 up to then. He returned and asked the 2nd respondent to delete his signature from the acknowledgement. After the deletion, he went to the Kwun Tong District Office and made an affirmation to the effect that he had not received the compensation as stated in the acknowledgement.

13. In late March, 2001, the 1st respondent took him to the 2nd respondent's office at Quarry Bay. Outside the office, the 1st respondent told him that the applicant had to sign the acknowledgement first before he could receive the amount as the 2nd respondent asked the 1st respondent to make payment first, and the cheque to be issued by the 2nd respondent would be issued in the name of the 1st respondent. In order to ease the applicant's concern, the 1st respondent gave the applicant the signed blank cheque. They could not fill in the figure as there was a dispute as to how much the applicant had been paid. At that time, he trusted the 1st respondent and accepted the signed blank cheque from the 1st respondent. Later on, he signed the acknowledgement of receipt at the office of the 2nd respondent.

14. In early April, 2001, they met up in a restaurant in Mongkok. The 1st respondent told him that his account was frozen and he could only give him $30,000.00. He also said that he would pay him the balance in a week's time. Because the applicant felt it was unsafe to do so, he did not accept the money from the 1st respondent. About a week later, the 1st respondent told him that he could not open any bank account and he would think of a way to solve the problem. Since then, it became very difficult for the applicant to find the 1st respondent. The applicant accepts that a cheque for the sum of $664.00 was paid into his bank account with the Bank of East Asia for the medical expenses. The Applicant called Mr. Sung Kin Kwong at the trial. Mr. Sung had also worked for the 1st respondent. According to Mr. Sung, after the 1st respondent received a demand letter issued by the applicant's solicitors in August, 2001, he asked Mr. Sung to make arrangement for him to meet the applicant in order to see how he could repay the employees' compensation to the applicant.

Finding of facts

15. The 1st respondent claims that he had paid $45,000.00 and $60,000.00 in cash in about May/June, 2000 and March, 2001 respectively. The applicant did sign the acknowledgement of receipt of $139,766.00 in March, 2001 at the 2nd respondent's office. This evidence is of course against the applicant. But the court is not dictated by this document. Ultimately, it is a question of fact whether the applicant has received the payment, and the question cannot be decided after I consider all the circumstances of the case including the written acknowledgement. In fact, it is also the 1st respondent's case that the applicant has not received the full sum as stated in the acknowledgement. In essence, this case turns entirely on facts and credibility.

16. According to the 1st respondent, the 2 sums of monies which he paid the applicant came from 2 projects in Golden Shopping Arcade. It is true that he produces the contractual documents in relation to them. However, these documents were not disclosed until 25 July, 2002 when the 1st respondent gave further and better particulars of his answer pursuant to an order made by Deputy Judge Yu on 17 June, 2002. It has to be borne in mind that in his affirmation filed on 28 June, 2002, the 1st respondent stated very strangely that there were no documents relating to the sources of those 2 sums of $45,000.00 and $60,000.00 paid to the applicant.

17. In any event, these documents do not show when and how much the 1st respondent received payments from the customers. Nor can they show that the 1st respondent passed the money to the applicant. In the circumstances, I find that I am unassisted by these documents produced by the 1st respondent and little weight should be attached to them. As a matter of fact, no evidence of any payment by the customers has been adduced by the 1st respondent. I find it very odd that he has kept no business records of the payments he received from his customers and the payments he made to the applicant. I also find that the evidence of Mr. Tse Ka Tai is of no assistance to the 1st respondent's case. All he can say is that he had done works for the shops in the shopping arcade.

18. I now turn to the incident in March, 2001. I find the 1st respondent's case in this respect is more untenable. It is the 1st respondent's case that when the applicant accepted $60,000.00 in cash, the applicant agreed to forgo the shortfall in the sum of some $8,000.00, that is, $139,766.00 - $131,800.00. The sum allegedly given up by the applicant should be larger as the 1st respondent now accepts that the total payments made between January, 2000 and March, 2000 were $23,600.00 and not $26,800.00. I see no reason why the applicant would agree to forgo the shortfall and give a windfall to the 1st respondent. To me, the explanation that he agreed to do so because of all the trouble caused to the 1st respondent does not hold water. According to the 1st respondent, on the one hand, the applicant was prepared to give up some $8,000.00. On the other hand, when they came to deal with the medical expenses which involved only a few hundred dollars, the 1st respondent had to go all the way to give a signed blank cheque to the applicant simply because they had not yet known the precise amount.

19. Having considered all the evidence including all the evidence of the witnesses and all the documents admitted in evidence, I do not find that the 1st respondent's case is credible or convincing at all. Mr. Chan for the 1st respondent argues very ably that if the 1st respondent had invented the story about the payments, it would have been wholly unnecessary for him to make up the story about the abandonment of the shortfall. He could have simply said that the compensation had been fully paid up by the 1st respondent. Though Mr. Chan may have a point on this, I am not persuaded that this is sufficient for me to say that the 1st respondent's case is credible, when all the facts of the case are carefully considered. Mr. Chan also submits that the applicant was not truthful about the incident concerning the payment of $664.00 by the 1st respondent into his bank account. To me, this is neither here nor there. Nothing really turns on it.

20. On the evidence, I am not satisfied that the 1st respondent has paid the sums of $45,000.00 and $60,000.00 to the applicant in settlement of his employees' compensation which he now claims, and I reject the 1st respondent's evidence in this regard. I also reject the respondent's evidence in relation to the abandonment of the shortfall. I find that the applicant is a truthful witness and I accept his evidence. Based on his evidence, I find that the applicant has only received the sum of $23,600.00 in respect of his employees' compensation from the 1st respondent, and the balance of the compensation in the sum of $116,176.00 ($139,776.00 - $23,600.00) has remained unpaid. Although he did sign his name on the acknowledgement of receipt of $139,766.00 in March, 2001 at the 2nd respondent's office, I am satisfied that he has not received the sum stated there except for $23,600.00. I also find that Mr. Sung Kin Kwong is a truthful witness. His evidence which I accept also supports the applicant's case.

21. In conclusion and for the above reasons, there must be judgment in favour of the applicant. The total amount of the award is $116,176.00 and on that amount the applicant is entitled to interest from the date of the accident until judgment at half the judgment rate and thereafter at the judgment rate until full payment. I also make an order nisi that the 1st respondent do pay the applicant the costs of the application to be taxed if not agreed on a party and party basis, and there be a certificate for counsel.