CHEN XIU MEI v. LI SIU WO AND ANOTHER

DCEC 645/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 645 OF 2005

--------------------

--------------------

______________

JUDGMENT

______________

Introduction

1. The deceased was an illegal worker.  He suffered serious injuries whilst operating a forklift-truck (“forklift”) in the course of employment with the 1^st respondent.  He died soon afterwards.  He was not insured.  The applicant took out the present proceedings to claim employees’ compensation.  The 1^st respondent argued that the accident did not arise out of the deceased’s employment as he was not supposed to operate the forklift.  The 2^nd respondent argued that it was an illegal contract of employment which should not be enforced.  In any event, the accident happened due to the serious and wilful misconduct of the deceased. 

2. The trial was originally conducted in Chinese.  Upon reviewing the abundant authorities in English submitted to me and by all parties’ consent, this judgment is to be given in English.  

The issues before the Court

3. I have to determine the following issues:

(1)   The credibility and reliability of each witness’s evidence;

(2)   Whether the accident arose out of and in the course of employment;

(3)   Whether the contract of employment was illegal;

(4)   If so, whether I should exercise discretion to make an order for employees’ compensation against any of the respondents;

(5)   The quantum of compensation, if any. 

The applicant’s case

4. The applicant calls 1 witness: Zeng Xianang.  He adopts his witness statement [45 – 50] and gives further oral evidence in court.  Zeng and the deceased were native folks.  They had come to work intermittently for the 1^st respondent for months before the accident on two-way permits.  His travel records [216 – 233A] showed a pattern of working for 82 days between 2 July and 24 September 2003.  He invariably came with the deceased to work for the 1^st respondent.  His visa showed his last stay in Hong Kong between 24 September and 5 October 2003.  Apparently Zeng or the deceased had no visa for their entry into, or stay in, Hong Kong in November 2003 including the date of the accident.  At all material times, whether as illegal entrants or two-way permit holders, Zeng and the deceased were not lawfully employable.   

5. The 1^st respondent’s business was to pack and transport lard scraps from factories to buyers in Mainland China.  Zeng and the deceased, as well as several other workers, were to manually move the lard scraps in bags to the lorry.  Since a few days before the day of the accident, they had been working in a factory site in Pak Sha Village [see layout at 445].  Either the 1^st respondent or the deceased would operate the forklift [see photos at 448 – 450].  It was crucial to have the forklift because of the vast quantity of lard scraps [see Photo 2 at 447].  The filled bags would be stacked onto pallet boards.  The 2 forks of the forklift would be inserted into the base of the pallet boards.  The forklift would hoist the pallet boards with the load off-ground to a height of about 5 – 6 feet next to the container.  The workers would push the bags off the pallet boards into the container. 

6. On 22 November 2003, between 9 a.m. and 10 a.m., the deceased had an accident.  He did not see how it happened because he was not nearby.  When he heard some yelling, he came by and saw the deceased being held by the workers on the ground.  The deceased was conscious and able to stand though yelling in great pain.  The 1^st respondent was initially reluctant to send the deceased to the hospital because of his illegal working status.  Eventually, the deceased was sent to the hospital by taxi.  Several hours later, the deceased died, at the age of 49.   

7. According to the records from Mainland [206 – 215], the deceased’s family comprised as follows:

(1)   mother, retired, aged 74 then and 77 presently;

(2)   wife,  housewife, aged 39 then and 42 presently;

(3)   daughter, student, aged 18 then and 21 presently;

(4)   daughter, student, aged 14 then and 17 presently;

(5)   son, student, aged 9 then and 12 presently;

(6)   daughter, student, aged 8 then and 11 presently.

The 1^st respondent’s case

8. The 1^st respondent gives evidence.  He adopts his witness statement [59 – 62] and gives evidence in court.  He calls no witnesses.  He had not checked the deceased’s documents of identity.  He did not have any insurance for the deceased.  The deceased was employed as a manual worker and, like all the other workers, not supposed to drive the forklift.    He had once seen the deceased, at leisure, trying to operate an old forklift in the factory in Upper Bamboo Garden. He himself had no certificate to operate it.  He told the deceased that it was dangerous.  The deceased told him that he (the deceased) knew how to operate it.  He let the matter pass. 

9. No forklifts had been used in the factories previously due to the limited space.  A few days before the accident, the 1^st respondent and workers began to work at the factory in Pak Sha Village.  It was a large place and the workload was substantial.  The 1^st respondent borrowed a forklift from a friend.  On the day prior to the accident but in the 1^st respondent’s absence, the deceased had operated the forklift.  In the same afternoon he had instructed them to start working early on the following day in his absence because he would be late.  On the following day, he arrived at the factory later than the deceased and other workers.  The deceased was operating the forklift.  He instructed the deceased to let him operate the forklift.  He drove it for an hour and turned off the engine.  He left the key in the ignition hole.  He went to have some water and use the washroom.  When he was in the washroom, he heard the engine sound of the forklift.  He suspected that the deceased was operating the forklift.  He did not call out to stop the deceased.  Soon he heard some yelling.  He came out and saw the deceased facing forward and standing on the dashboard panel.  The deceased’s chest was being trapped between the fork and the front roof.  The workers helped the deceased down.    

10. He was later charged with employing the deceased, who was a person not lawfully employable.  He was sentenced to 6 months’ imprisonment.    

The 2^nd respondent’s case

11. The respondent calls 1 witness:  Patricia Yim Wai Man.  She adopts her witness statement [63 – 75] and gives evidence in court.  She is and was secretary of the 2^nd respondent.  Her duties are to process claims applications arising from uninsured or insurer insolvency [paras. 1 – 2].  

12. The 2^nd respondent, namely the Employees Compensation Assistance Fund Board (“the Board”), is a statutory body set up on 1 July 1991 under the Employees Compensation Assistance Ordinance (“the ECA Ordinance”), Cap. 365, to administer the Employees Compensation Assistance Fund (“the Fund”).  The Fund provides for the protection of employees who are entitled to compensation for employment related injury and the making of relief payment to eligible persons in relation to common law damages for such injury [para. 3].   

13. The functions of the Board include:-

(a)   holding the Fund upon trust and to administer the Fund in accordance with the objects of the ECA Ordinance;

(b)  receiving moneys collected from the insurers by the Employees’ Compensation Insurance Levies Management Board (“ECILMB”);

(c)  determining the eligibility of persons applying for payment from the Fund; and

(d)  advising ECILMB from time to time with respect to the amounts required to meet known and anticipated claims against the Fund.

14. From its inception in 1991, the Board has been financed by a levy on the premium of EC insurance.  The levy was collected by ECILMB on behalf of the Board [para. 6].

The legal basis of the applicant’s claim

15. Section 5 of the Employees’ Compensation Ordinance (“ECO”), Cap. 282, provides as follows:

(1)   Subject to subsections (2) and (3), if in any employment, personal injury by accident arising out of and in the course of the employment is caused to any employee, his employer shall be liable to pay compensation in accordance with this Ordinance.

(2)   …

(3)   In any proceedings under this Ordinance where it is proved that the injury to an employee is attributable to the serious and willful misconduct of that employee, or that any injury by accident arising out of and in the course of his employment is deliberately aggravated by the employee, any compensation claimed in respect of that injury shall be disallowed; except that where the injury results in death or serious incapacity, the Court on consideration of all the circumstances may award the compensation provided by this Ordinance or such part thereof as it shall think fit. 

(4)   For the purposes of this Ordinance –

(a)    an accident arising in the course of an employee’s employment shall be deemed, in the absence of evidence to the contrary, also to have arisen out of that employment;

(b)   an accident to an employee shall be deemed to arise out of and in the course of his employment, notwithstanding that the employee was at the time when the accident happened acting in contravention of any statutory or other regulation applicable to his employment, or of any orders given by or on behalf of his employer, or that he was acting without instructions from his employer, if such act was done by the employee for the purposes of and in connection with his employer’s trade or business

…..

16. Section 6 provides, inter alia, as follows:

(1)    Where death results form the injury, ….., the amount of compensation payable to the members of the family of the employee shall be –

          …

(b) in the case of an employee of or over 40 years of age but under 56 years of age at the time of the accident, a lump sum equal to 60 months’ earnings or 60 times the amount specified in the second column of the Sixth Schedule shown opposite section 6(1)(b) specified in the first column of the first column of that Schedule [i.e., $21,000.00], whichever is the less

…..

(2) The amount of compensation payable under subsection (1) shall in no case be less than the amount specified in the second column of the Sixth Schedule shown opposite section 6(2) specified in the first column of that Schedule.

…..

17. Section 2(2) provides as follows:

(2) If, in any proceedings for the recovery of compensation under this Ordinance, it appears to the Court that the contract of service or apprenticeship under which the injured person was working, at the time when the accident causing the injury happened, was illegal, the Court may, if having regard to all the circumstances of the case it thinks proper so to do, deal with the matter as if the injured person had at the time aforesaid been a person working under a valid contract of service or apprenticeship. 

My findings

18. I have considered the submissions made by counsel for the applicant and the 2^nd respondent.  The 1^st respondent makes no submissions.

The credibility and reliability of each witness’s evidence

19. In evidence-in-chief, the applicant’s witness Zeng says that the deceased had all along been operating the forklift for the 1^st respondent as part of his duties.  In cross-examination, however, he admits that the deceased only learned to drive the forklift at leisure. 

20. He gives evidence that the deceased had told him that he (the deceased) knew how to operate a forklift.  This is contrary to his evidence before the coroner that the deceased had never told him such a thing.   

21. His written statement gave a vivid description of what the deceased was trying to do whilst standing up at the dashboard panel just before the accident.  He admits in cross-examination that he only heard it from his colleagues afterwards as he was not present at that time. 

22. I do not find Zeng a reliable witness.  I reject his evidence on all facts in issue.   

23. I am aware of the challenge made of the 1^st respondent’s evidence but I find him a credible and reliable witness on all facts in issue.   

24. I also find the 2^nd respondent’s witness Madam Yim a credible and reliable witness.  Her evidence is not in dispute, though. 

Whether the accident arose out of and in the course of employment

25. There is no direct evidence as to whether it was part of the deceased’s duties to operate the forklift or not.  I recount here the relevant part of the 1^st respondent’s evidence.  He maintains that the deceased was only a manual labourer, who was not employed to operate the forklift.  He admits, however, that he had never expressly or impliedly forbidden the deceased to operate the forklift. 

26. The Hong Kong legislation and its English counterparts are substantially the same on the aspect of “accident arising out of and in the course of employment”.  Mr. Wong SC, counsel for the 2^nd respondent, submits that the accident did not arise out of or in the course of employment.  He relies on various authorities, the most relevant ought to be The Queen v. D’Albuquerque, ex parte Bresnahan [1966] 1 Lloyd’s Rep 69 and Cheung Tam Loy v Cheung Hing Construction Co. [1958] DCLR 60. 

27. In The Queen v. D’Albuquerque, ex parte Bresnahan (supra), the applicant’s husband was a quay porter, who was not supposed to operate a forklift.  He operated an unattended forklift, whose engine was still running, to move pallet boards obstructing his work.  The truck carried him down into the dock.  The Court regarded that the deceased’s act was different from what he was employed to do.  It was not within his scope of employment.  No one authorized him, nor had he the authority, to operate the forklift.  The accident did not arise out of his employment. 

28. In Cheung Tam Loy v Cheung Hing Construction Co. (supra), the workmen was a coolie, who was not qualified or supposed to operate a mechanical shovel.  He sat on it and operated it without authority.  As a result it fell down an embankment and killed him.  The Court held that the accident did not arise out of his employment.

29. Mr. Cheung, counsel for the applicant, submits [para. 8 of his submissions] that the accident arose out of and in the course of employment.  He mainly relies on the 1^st respondent’s evidence that each bag of lard powder weighed 50 kilograms.  It was impossible for the deceased to put them into the container truck without the incidental use of the forklift.  By necessary inference, the deceased was engaged to drive it at the time of the accident. I agree with this submission.  

30. In order to support this submission, one must be able to identify a juncture where the deceased was either employed to operate the forklift or, being employed as a manual labourer at first, then changed or extended his job nature to include the operation of the forklift.  It is not in dispute that before coming to the factory site of Pak Sha Village, where the accident happened, there was never any need for a forklift due to the limitation of space.  However, one day prior to the accident, the deceased had operated the forklift with the subsequent knowledge of the 1^st respondent.  The non-intervention by the 1^st respondent and the necessity of the task rendered it the only reasonable inference that the deceased was impliedly authorized to operate the forklift on the date of the accident.  

31. Our case is different from The Queen v. D’Albuquerque (supra) and Cheung Tam Loy (supra) because the employees there were never employed or authorized to do the job which resulted in the injury. 

32. Section 5(4)(a) of ECO affords the applicant a favourable presumption of “arising out of” the employment if the applicant can prove that it was “in the course of” the employment.  The authority was Privett v. Darracq Motor Engineering Co. [1934] 27 BWCC 325.  That case concerned an workman who was employed to clean the machinery of a steam roller when it was stationary.  It was not his duty to drive the vehicle.  To facilitate his cleaning, he set the machinery in motion but unfortunately injured himself.  The Court regarded that he was not in the course of employment when setting the machine in motion.  The fact that he was working it for the purposes of the employer’s business would not bring him back to the course of employment. 

33. In sum, the employee has first to establish that the accident happened in the course of employment.  He then enjoys the presumption under section 5(4)(a) that the accident arising out of the employment.  The employer may call evidence to negative this presumption.  However, section 5(4)(b) does not allow the employer to rely on the employee’s breach of statutory regulations or his instructions as long as the act done by the employee was for the purposes of and in connection with the employer’s trade or business. 

34. Mr. Wong SC cites various cases in his attempt to rebut the presumption.  But I think their facts are different from our present case.       

35. In Wilsons and Clyde v. M’Ferrin [1926] AC 377, the deceased was employed as a miner.  He fired a series of shots in the colliery.  Believing that all had exploded, he entered the shot-hole to prepare for the next shot.  A shot then exploded and killed him.  His entry and preparation for the next shot was in breach of a statutory regulation which required an authorized skilled person to do it.  He was not authorized or skilled.  The Court regarded that what the deceased was doing was not his employment at all.  The breach of the statutory regulation was not the focal point. 

36. In M’Allan v. Perthshire County Council (1906) 8 F. 783, the applicant was employed in road repair works.  He was to sweep and put blinding on the part of the road where on which the steam road roller worked.  There was a hut provided for the engineman and the fireman who might have to spend the night on site because they had to attend to the engine very early in the morning.  It was privately arranged between them that the workman could stay in the hut overnight and attend to the engine for their behalf early in the morning.  He was injured when stepping down from a road roller belonging his employer when performing the task under the private arrangement.  The Court regarded that his task did not serve his employer’s interest.       

37. In Brinckman v. Harris [1916] 9 BWCC 200, the applicant was employed to manually cut squares out of metal.  When she had finished her assigned job, she went to see the foreman for further instructions.  While waiting for the foreman, she helped a colleague, who was using a power press.  She then injured her hand.  The Court regarded that she was not doing any job assigned to her.  She was not working in her employer’s interest.  

38. In Yu Sang v International United Shipping Agency [1992] 1 HKC 542, the worker was killed by a fellow seaman on a ship where they worked in the aftermath of a personal quarrel.  This brought him outside the scope of his employment. 

39. Mr. Wong SC refers to the doctrine of “added peril” in cases such as Stephen v. Cooper [1929] A.C. 570 and Thomas v Ocean Coal Co. [1933] A.C. 100.  In Stephen v. Cooper (supra), the applicant was employed to drive a reaping machine drawn by two horses.  Whilst he was driving it, one of the chains detached from the near horse.  He stopped the machine but did not put the cutting blade out of gear.  He tried to walk along a pole to refix the chain.  The pressure of his weight on the pole made the horses move forward.  He fell onto the cutting blade and got injured.  Lord Hailsham L.C. stated that:

[I]t is well established by a series of decisions in your Lordships’ House that, apart altogether from the question of serious misconduct, if the accident arises from some peril to which the workman has exposed himself by his own conduct and which he was not allowed to encounter by any term of his contract of service, the accident cannot be said to arise out of his employment.  Lord Dunedin states the principle in Plumb v. Cobden Flour Mills Co. [1914] A.C. 62, 68 as follows: “A risk is not incidental to the employment … when it is an added peril due to the conduct of the servant himself”; and Lord Haldane explains the expression “added peril” in Lancashire and Yorkshire Ry. Co. v. Highley [1917] A.C. 352, 361, 365 as meaning a peril “voluntarily superinduced on what arose out of his employment, to which the workman was neither required nor had authority to expose himself.  In my view these expressions exactly fit the risk which resulted in the injury in the present case … (at 574-575)

40. In Thomas v Ocean Coal Co. (supra), the worker failed to comply with the warning notice posted up under the Coal Mines Act 1911 as he walked past the uncovered shaft under the pit trams and crushed by the descending cage-lift.  Lord Buckmaster remarked that:

 In one sense, every method of performing an operation in the course of a man’s employment that is not the safest is an added peril, but the [Workmen’s Compensation] Act contains no provisions that exclude from its benefits an accident that has arisen through a method of work which was not the safest in the circumstances.  Conduct can, of course, be so reckless and so unnecessary as to take it outside the meaning of the statute …                 

41.  Even assuming that the doctrine of “added peril” is applicable, there is no evidence suggesting that the deceased was not doing a task in the 1^st respondent’s interest.  I find that the accident arose out of and in the course of his employment by the 1^st respondent. 

Whether the contract of employment was illegal

42. There is no evidence of the status of the deceased at the time of the accident.  Zeng’s oral evidence is that both he and the deceased were on a two-way permit at the time of the accident.  This is not supported by any documentary evidence.  Mr. Cheung relies on the 1^st respondent’s admission to the Charge [p. 480] and Brief Facts [p. 258] used in the magistrates’ court where he pleaded guilty to the offence of employing a person not lawfully employable.  The Charge and Brief Facts stated that the deceased was a two-way permit holder from China.   

43. Section 62(2) of the Evidence Ordinance reads:

(2) In any civil proceedings in which by virtue of this section a person is proved to have been convicted of an offence by or before any court in Hong Kong –

(a)    he shall be taken to have committed that offence, unless the contrary is proved; and

(b)   without prejudice to the reception of any other admissible evidence for the purpose of identifying the facts on which the conviction was based, the contents of any document which is admissible as evidence of the conviction, and the contents of the information, complaint, indictment or charge on which the person in question was convicted, shall be admissible in evidence for that purpose.

44. There is no evidence to displace the 1^st respondent’s admission of the deceased’s status.  I accept that the deceased was a two-way permit holder at the time of the accident. 

45. Relying on Nonferral (NSW) PTY Ltd v Taufia (1998) 43 NSWLR 312, Mr. Cheung submits [in para. 44 of his submissions] that the contract of employment between the deceased and the 1^st Respondent was not illegal.  In Nonferral (supra) the workman was injured at work.  He sought workmen’s compensation.  He was an illegal entrant who performed work in Australia without the requisite written permission.  It was in breach of section 83(5) of the Migration Act 1958, which read:

Where a person who is an illegal entrant performs any work in Australia without the permission, in writing, of the Secretary [of the Department of Immigration], the person commits an offence against this sub-subsection.  The penalty for such an offence is a fine not exceeding $5,000. 

46. The Court had to determine whether the contract of employment was illegal, and if so, whether it should exercise its discretion (under a statute with the same wording as section 2(2) of ECO).  Stein JA, who delivered the majority judgment, reviewed the authorities and propounded the approach of discerning the legislative intention.  He said, at 319 and 320:

In examining the question of whether a prohibition (in the sense of rendering it illegal) of a contract of employment entered into without the secretary’s approval is to be implied, it is necessary to examine the objects of the statute.  Is the prohibition consistent with the objects of the statute or is it not necessary in order to further the objects of the statute?  If it is the latter, the courts will be reluctant to find that the contract is illegal:  PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643, but cf Hurst v Vestcorp Ltd.  Pearce LJ has explained the reasons why the courts should not be too ready to imply that a contract is prohibited by statute.  To do so would deprive the court of its own general power (based on public policy) to determine whether contracts which are ex facie unlawful, are to be enforceable:  Archbolds (Freightage) Ltd v S Spanglett Ltd [1961] 1 QB 374 at 387.

          …

In applying the applicable principles to the question of an implied statutory prohibition, it is well to note that the courts have held that there is no one test.  Regard must be had to all relevant considerations and no single consideration is necessarily conclusive:  see Yango (at 414), St John Shipping (at 287) and Shaw v Groom [1970] 2 QB 504 at 523. 

47. The Court held that there was no need to render the contract illegal in order to further the objects of the statute. 

48. Mr. Cheung relies on the observations of Deputy Judge To in the case of Lee Mui Fong v Wong Kit Man DCEC 455 of 2002 for the proposition that illegality of a low turpitude could not have been a consideration or anything of a concern to bar compensation. 

49. Mr. Cheung cites other authorities which I think are not directly relevant.  The case of Dowling v Sol V. Slotnik (1998) 244 Conn. 781 demonstrated how the Connecticut Court actually construed the public policy in Connecticut.  The relevant statute was fundamentally different from the Hong Kong legislation.    Its public policy can hardly fit into the Hong Kong context.  The case of Revill v Newbery [1996] Q.B. 567 concerned an occupier who injured an intending thief was held to be negligent despite the illegality of the latter’s presence.  Evans L.J., at 579, stated that:

 [I]t is one thing to deny to a plaintiff any fruits from his illegal conduct, but different and more far-reaching to deprive him even of compensation for injury which he suffers and which otherwise he is entitled to at law.

The case of Hall v Herbert [1993] 2 S.C.R. 159 was about a drunken man who was permitted by the car owner cum passenger to drive the car, which crashed.  He sued the car owner for damages for injuries sustained.  Sopinka J. stated that:

[T]he true basis for denying recovery in such circumstances is the court’s reluctance to lend its assistance to persons involved in serious criminal activity when to do so would reflect adversely on the administration of justice. 

50. I do not think either proposition is in dispute in our present case.  The real issue before me, however, is the justification, if any, for the wrongdoer to be deprived of compensation.  As I see it, the Hong Kong

legislation is fundamentally different from the Migration Act 1958 in that the latter did not go so far as the former did to regard the person as not lawfully employable.  On the one hand, in entering into the contract of employment in Hong Kong, the deceased had committed the offence of breach of condition of stay.  Under section 41 of the same ordinance, the penalty was a fine of $50,000 and imprisonment for 2 years.  On the other hand, in employing the deceased, the 1^st respondent had committed the offence of employing a person not lawfully employable.  Under section 17I(1) of the Immigration Ordinance (Cap. 115), the penalty was a fine of $350,000 and imprisonment for 3 years.  The 1^st respondent’s case here would warrant a relatively severe penalty as it had the aggravating features of a protracted and repeat employment.

51. The Hong Kong legislation is a complete ban of any illegal employment relationship.  The parties cannot form any such contract at all.    To illustrate this point, Mr. Wong SC refers [in para. 79 of his submissions] to the case of SJ v Ho Mei Wa [2004] 3 HKLRD 270 where the Court of Appeal raised grave concern about illegal workers taking up employment opportunities otherwise available to the local people.  It propounded the public policy of discouraging illegal workers from taking up employment in Hong Kong.  In the subsequent case of HKSAR v Li Chang Li [2005] 1 HKLRD 864, the Court of Appeal was also expressly concerned about the drastic increase and the social problem of visitors taking up illegal employment over the years. 

52. In my judgment, there are strong and clear public policy reasons to render illegal the contract of employment between the deceased and the 1^st respondent. 

53. Alongside the statutory objects of section 2(2) of ECO, Mr. Cheung submits [in para. 143 – 171] that it shall be against the Basic Law to refuse compensation to illegal workers such as the deceased.  He does not challenge its constitutionality, though.  Illegal employees’ right to equality and non-discrimination is in line with the Basic Law and Bill of Rights Ordinance.  He refers us to various provisions.  Article 25 of the Basic Law reads as follows:

          All Hong Kong residents shall be equal before the law.

54. Article 41 of the Basic Law reads:

Persons in the Hong Kong Special Administrative Region other than Hong Kong residents shall, in accordance, with law, enjoy the rights and freedoms of Hong Kong residents prescribed in this Chapter. 

55. Article 22 of the Hong Kong Bill of Rights reads:

All persons are equal before the law and are entitled without any discrimination to the equal protection of the law.  In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.  (Emphasis added by applicant’s counsel)

56. Article 39 of the Basic Law reads:

The provisions of the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and international labour conventions as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region.

The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law.  Such restrictions shall not contravene the provisions of the preceding paragraph of this Article.  ( My emphasis)

57. Mr. Cheung submits that the term “other status” in Article 22 of the Hong Kong Bill of Rights must include equal rights for illegal employees.  I do not agree with Mr. Cheung’s submissions.  I think the category of “other status”, as do all the preceding categories, must be subject to the phrase “unless as prescribed by law” in Article 39.  It is not Mr. Cheung’s submission that Hong Kong cannot legislate to defer illegal employees’ right to those of legal employees.  I see no reason why the Hong Kong legislature cannot make any laws which address social problems engendered by illegal employment with an incidental consequence of deferring, not with the primary object of discriminating against, the rights of illegal workers.   

58. Alternatively Mr. Cheung submits [in para. 158 – 171 of his submissions] that section 2(2) of ECO is unconstitutional for lack of rationality and proportionality. 

59. On rationality, Mr. Cheung submits [in para. 165 – 166 of his submissions] that the denial of compensation to illegal employees will not foster the objects of the Immigration Ordinance.  The illegal employees come to work, not to injure themselves to get employees’ compensation.  Mr. Wong SC submits in reply that the entitlement to compensation will be an additional pull for potential illegal employees when they are considering whether to come to work illegally.  I agree with Mr. Wong SC. 

60. On proportionality, Mr. Cheung submits [in para. 168 – 171 of his submissions] that increased criminal penalties alone may foster the objects of the Immigration Ordinance.  I do not agree.  Hong Kong has placed great emphasis on stemming out illegal employees.  The denial of civil remedy fits well into this regime and magnitude of prohibition. 

Whether I should exercise discretion to make an order for employees’ compensation against any of the respondents 

The position of the 1^st respondent

61. I shall begin with the position of the 1^st respondent. 

62. I refer to Mr. Cheung’s submission [in para. 58 of his submissions] based on Wilsons and Clyde Coal Co. v Nonferral [1926] A.C. 377.  There Stein JA postulated the principles of public policy as follows:

 McHugh J had previously stated in Nelson v Nelson (1995) 184 CLR 538 at 613:

“… [courts] should not refuse to enforce legal or equitable rights simply because they arose out of or were associated with an unlawful purpose unless: (a) the statute discloses an intention that those rights should be unenforceable in all circumstances; or (b)(i) the sanction of refusing to enforce those rights is not disproportionate to the seriousness of the unlawful conduct; (ii) the imposition of the sanction is necessary, having regard to the terms of the statute, to protect its objects or policies; and (iii) the statute does not disclose any intention that the sanctions and remedies contained in the statute are to be the only legal consequences of a breach of the statute or the frustration of its policies.”

                        …

63. In this connection, I think the case of Taylor v Bhail (1995) 50 ConLR 70 cited by Mr. Wong SC will be seen relevant.   The defendant there was the headmaster of a school which was damaged by gales.  The plaintiff was one of the interested contractors to bid for the contract to repair it.  The contract price was to be paid out of insurance.  They conspired to inflate the price so that the defendant could reap the inflated margin whereas the defendant could get the contract.  After completion of work, the plaintiff sued for the contract price (but not the inflated margin).  The defendant pleaded illegality in defence.  The Court refused to enforce the contract for the plaintiff.  Sir Stephen Brown P cited the speech of Lord Mansfield CJ in Holman v Johnson (1775) 1 Cowp 341 at 343, 98 ER 1120 at 1121 as follows:

The objection, that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant.  It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may say, so.  The principle of public policy is this; ex dolo malo non oritur action.  No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act.  If, from the plaintiff’s own stating or otherwise, the cause of action appear to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted.  It is upon that ground the Court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff.  So if the plaintiff and defendant were to change sides, and the defendant was to bring this action against the plaintiff, the latter would then have the advantage of it; for where both were equally in fault, potior est condition defendentis.

64. I have no doubt that the deceased would contemplate in advance that, as it was a crime and he could not lawfully take up any employment in Hong Kong, he would be at risk of not receiving any workmen’s compensation.  I do not think the applicant can now argue that public policy should provide him a buffer in any event.  The case of

Baitis v Mills (1968) 17 LGRA 242 further cited by Mr. Wong SC is for the general proposition that where the parties were not seeking to enforce benefits from a crime, public policy would not necessarily militate against compensation if only to advance some broad notion of welfare of the community.  Cases such as Ho Mei Wa (supra) and Li Chang Li (supra) have, nevertheless, gone much further to identify the need for a complete ban of illegal workers.  To countenance an illegal contract of employment would be an invitation to the potential law-breakers and squarely against clear public policy. 

65. The applicant argues that the humanitarian ground would suggest a favourable discretion.  The case in point is R v Inhabitants of Eastbourne (1803) 4 East 103.  It concerned the settlement of an alien subject together with his locally resident wife and children in a parish.  The Court regarded the subject’s humanitarian plea to override all positive laws.  Mr. Wong SC accepts it to be a factor but not necessarily a weight one.  He says [in para. 40 of his reply submissions] that given the disparity of wealth and wages difference between China and Hong Kong, in almost every case of illegal workers there are bound to be some humanitarian grounds in the family or financial background of the illegal worker.  If so, the discretion will invariably be exercised in favour of the illegal worker.  I agree with Mr. Wong SC.  I see no strong humanitarian grounds to warrant a favourable discretion in our present case.   

66. All in all, I do not find it an appropriate case to exercise my discretion in the applicant’s favour.     

The position of the 2^nd respondent

67. Section 16 of the ECAO provides as follows:

(1)    A person who is unable to recover from an employer payment of an amount of compensation for which the employer is liable may apply for payment of that amount from the [Employees Compensation Assistance] Fund.

(2)    For the purpose of this section an employer is not to be regarded as liable for the payment of an amount of compensation unless –

(a)    the amount is payable –

(i)     pursuant to a judgment or order of a court or tribunal of competent jurisdiction in Hong Kong;

(ii)   by virtue of section 16A(9)of the Employees’ Compensation Ordinance (Cap. 282) following an assessment of compensation by the Commissioner [for Labour] under that section; or

(iii)   pursuant to a Certificate of compensation Assessment for Fatal Case or Review Certificate of Compensation Assessment for Fatal Case issued under the Employees’ compensation Ordinance (Cap. 282)

…..

68. In our present case, only section 2(a)(i) is relevant.  The 2^nd respondent’s liability will only arise if the 1^st respondent has been made liable to pay in the first place.  Mr. Wong SC submits that the 1^st respondent’s liability is not identical to the 2^nd respondent’s liability and there may be cases where the respective positions of the 1^st respondent and the 2^nd are different.  However, in view of my aforesaid finding that the contract of employment should not be enforced nor discretion be favourably exercised, this point has become academic.  I tend to think, though, that section 2(2) of ECO does not at all relate to the 2^nd respondent, who has to pay only if the 1^st respondent has to do so in the first place.  

The quantum of compensation, if any

69. In view of my aforesaid findings, it is really not necessary for me to address this issue.  I shall be succinct just to complete the picture.  According to section 5(3) of ECO, if the deceased’s misconduct was “serious and wilful”, this Court may reduce the compensation.  The applicant cites the case of Yuen Yuk Ying v Chan Kam Wing [1997] HKLRD 149 for the uncontroverted principle that the Court should consider all circumstances peculiar both to the accident and the victim. 

70. The applicant [in para. 174 of his submissions] relies on Johnson(Pauper) v Marshall, Sons, & Co Ltd [1906] A.C. 409 for the interpretation of “serious and wilful misconduct” as follows:

No doubt it was misconduct to enter the lift when not in charge of a load, for that was a disobedience of orders lawfully given.  It was “wilful” in the sense that the man presumably entered of his own accord, but the word “wilful”, I think, imports that the misconduct was deliberate, not merely a thoughtless act on the spur of the moment.  Further the Act says it must be “serious”, meaning not that the actual consequences were serious, but that the misconduct itself was so.

71. In Dobson v United Collieries (1905) 8 F. 241, the House of Lords regarded the question of “serious and wilful misconduct” to be a question of fact based on an objective point of view.  If I have to decide on the quantum, I shall reduce it on the ground of such misconduct. 

72. The exact happenings leading to the injury have remained unknown in the absence of any direct witnesses or evidence.  If it is permissible to rely on the Occupation Safety Officer’s report in reconstruction of the accident [pp. 439 – 461], it seems to form no part of his task to climb up to stand on the dashboard panel, the more so when the engine was still running.  I should be inclined to regard such conduct as “serious and wilful”.

Conclusion

73. I dismiss the applicant’s application against both respondents.  I order nisi for the applicant to pay costs of this action to both respondents (with certificate for counsel Mr. Wong SC for the 2^nd respondent).  The applicant’s own costs shall be taxed under legal aid regulations.  This costs order shall become absolute after 14 days from today.