WANG SHAOWU v. BORDON CONSTRUCTION CO LTD AND OTHERS

DCEC 1654/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1654 OF 2014

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DECISION

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1.  This is an application by the applicant for leave to join Lai Wai Keung trading as Wai Yip Engineering Company, the intended 4^th respondent, as an additional party to these proceedings. The issue is whether the applicant has offered a reasonable excuse for the failure on his part to make an application within the prescribed time.

The Background

2.  The applicant was injured in an industrial accident that happened on 28^th August 2012.  As a result of the accident, he suffered serious multiple injuries, including fractures of the L3 vertebra, right tibia, right fibula, left calcaneum and left iliac wing.  By an application taken out within time, he sought compensation against (a) the 1^st respondent, the principal contractor, and (b) and (c), the sub-contractors down the chain of sub-contracting.  At the time when the application was taken out, the applicant’s solicitors were in possession of limited information.  Based on the Form 2, in which it was stated that the 3^rd respondent was the applicant’s direct employer, and the fact that the applicant had been receiving periodic payments from the 2^nd and 3^rd respondents, the applicant and his solicitors took the view that either the 2^nd or 3^rd respondent was the applicant’s employer.

3.  Unbeknown to the applicant and his solicitors, the 4^th respondent was convicted of an offence under the Factories and Industrial Undertaking Ordinance on 10^th September 2013.  Details of the conviction and an accident report dated 7^th February 2013 complied by a Safety Officer of the Labour Department (“the Accident Report”) were through the Legal Aid Department copied to the solicitors for the applicant in December 2014.  It was stated in the Accident Report that the Intended 4^th respondent was the one who employed the applicant.  In reliance on the Accident Report, the solicitors of the applicant took out the present application for leave to join the Intended 4^th respondent as an additional party to these proceedings.

4.  The application was taken out some eight months after expiry of the prescribed 24-month period.  Roughly half of the said eight months was attributable to the time that Legal Aid Department required to process the paper work and to forward the relevant documents to the applicant’s solicitors[1], and the other half to the time the applicant’s solicitors needed to verily the facts and take instructions from the Applicant, who happened to be out of Hong Kong.

The Principles

5.  Section 14(1) of the Employees’ Compensation Ordinance, Cap.282 (“the Ordinance”) provides that an application for compensation must be brought within 24 months from the occurrence of the accident causing the injury.  Sub-section (4) provides that the court may receive and determine an application notwithstanding that the application has not made in due time as required if it is satisfied that there was reasonable excuse for the failure so to make an application.

6.  The question therefore is whether there is a reasonable excuse for the applicant not to have commenced the application against the Intended 4^th applicant prior to 28^th August 2014.  The burden is on the applicant to give a reasonable excuse.  If the excuse offered is unbelievable, the court will decline to grant an extension even though the delay is a relatively short one: Wong Wai Pun Michael v G4s Cash Services Limited DCEC 999/2009.  On the other hand, once a reasonable excuse is offered, the court is at liberty to exercise its power liberally: Chan Siuy Wing v Tonyear Investment Limited ta/a Kwan Shing Restaurant [1999] 2 HKC 348 (CA).

7.  Examples of reasonable excuses are provided in Butterworth Hong Kong Employees’ Compensation Handbook (4^th ed.) at §14.03.  Confusion over the identity of the employer is one of the excuses that may be considered reasonable.  In Wong Ki v Wong Tung Sing DCEC 74/2008, the applicant commenced an application against a company owned by the respondent for compensation.  It was believed that the company, which had been paying the applicant, was his employer at the time of the accident.  Some five months after the limitation period had expired, it became known to the applicant that the company was indeed not his employer.  The applicant then discontinued the application against the company and sought leave to commence a fresh application against the respondent out of time.  The Deputy Judge held that there was a reasonable excuse for the delay and granted leave for the commencement of an application out of time.

8.  Likewise, in Kwan Hin Choi Keu v Tim Kee Transportation Limited DCEC 843/2000, unreported (date of ruling: 13^th February 2001, Judge Carlson gave leave for the commencement of an application out of time.  The facts of the case are very similar to those in Wong Ki.  The length of delay was four months.  In exercising his discretion in favour of an extension, the learned Judge said,

“10.  The next point which Ms Lai takes is that had they been cautious enough to ask for the Form 2 from the Labour Department, they would have seen that the employer is given as Tim Kee Transportation Limited.

11.  In reply to that, Mr Au says that the Legal Aid Department was not sent that Form until after the expiry of the limitation period, so it would have been too late, and I am now invited to take a broad, and I suppose Mr Au would say, a liberal approach to this.  His client is not a man who is of great education.  The position was rather fluid because there was clearly this common employer, Mr Chan Kam Cheung, who, rather unusually in this case, and I think this is a real point, the applicant drove lorries which were clearly marked differently and belonged to two companies under the common ownership of Mr Chan and I think there is force in that point.  That may well have given the applicant a wholly erroneous impression as to who his actual employer was and whilst things went perfectly well and normally, he was prepared to accept that position - he drove lorries.  Mr Chan, so far as he was concerned, owned those lorries, and he was paid a salary and that was all that concerned him.

12.  The other matter is that the delay here is not particularly serious and Ms Lai also accepts that her clients have not suffered any real prejudice.  They have always been aware that this claim was afoot and they have been able to react to it and, therefore, looked at in the round, it seems to me that the applicant in this case has made out a reasonable excuse for all the reasons that I have drawn attention to.”

9.  I am aware of Roger VP’s remark in Liu Le Wen v Chan Sing & Anor CACV 185/2007 that previous decisions on reasonableness of a particular excuse are nothing but illustrations of what the courts considered was or was not reasonable in a particular matrix of facts.  Yet, I share Judge Carlson’s sentiments in Kwan Hin Choi Keu that if there are factors that are beyond the applicant’s control and the confusion over the identity of his employer is not attributable to any fault on his part, the court’s discretion under section 14(4) should be exercised liberally.  In my view the applicant has demonstrated that he has a reasonable excuse for not commencing the proceedings against the intended 4^th respondent earlier than they were.  The applicant worked in an industry that involves many levels of subcontracting.  It is not uncommon that an employee in his position does not know the exact identity of his employer.  I accept that there was confusion over the identity the applicant’s employer which was not due to the applicant’s fault.  When the applicant’s solicitors received the Accident Report from the Legal Aid Department, the time for the taking out of an application against the Intended 4^th respondent had already expired.  The best that they could do is to seek leave to join the Intended 4^th respondent out of time, which they duly did.  I am aware that the applicant’s solicitors took more than four months to take instructions from the applicant and verify the facts but do not think such delay, undesirable though, is fatal to his application.

10.  The intended 4^th respondent, who was present in the hearing before me, did not assert any prejudice.  In the circumstances, taking all relevant factors into account, I make the following orders:-

(1) There be leave to the applicant to join Lai Wai Keung trading as Wai Yip Engineering Company as the 4^th respondent;

(2) There be leave to the applicant to amend his application filed on 8^th August 2014 as per the draft annexed to the summons dated 15^th May 2015;

(3) The applicant do file and serve the amended application to all respondents within 14 days from the date of this order;

(4) The respondents do have leave to file and serve an answer or amended answer within 28 from the date of service of the amended application;

(5) The costs of this application be borne by the applicant in any event except that as between the applicant and the 1^st and 2^nd respondents:-

(1) there be no order as to costs in respect of the costs of the hearing on 3^rd June 2015 before Deputy Judge Ho;

(2) there be no order as to costs in respect of the 1^st and 2^nd respondents’ summons dated 24^th August 2015 (for leave to file an affirmation in opposition to the applicant’s application);

(3) the 1^st and 2^nd respondents do forthwith pay to the applicant the costs of today, summarily assessed at $4,800;

(6) The Applicant’s own costs be taxed in accordance with Legal Aid Regulations.

11.  I ordered the 1^st and 2^nd respondents to pay to the applicant the summarily assessed costs of $4,800 because their solicitors had been, quite unnecessarily, opposing the applicant’s application.  At the hearing before me, Mr Hung, counsel for the 1^st and 2^nd respondents accepted that his clients had no locus standi to oppose the application.  Upon the 1^st and 2^nd respondents’ agreement to pay summarily assessed costs of $4,800 to the applicant, Mr Hung was excused from the hearing.

12.  I thank Mr Lam and Mr Hung for their assistance.