MA CHUN SHING v. CHUNG BEN FOOD CO. LTD

DCEC 2281/2022

[2025] HKDC 1725

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2281 OF 2022

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JUDGMENT

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A.  Introduction

1.  This is the Applicant’s application for compensation under sections 9, 10 and 10A of the Employees’ Compensation Ordinance (Cap 282) (“ECO”).

2.  On 12 February 2021, while the Applicant was driving a truck (the “Vehicle”), he lost control of the Vehicle at Mei Ching Road Interchange, Tsing Yi, New Territories, and the Vehicle crashed onto the curb (the “Accident”). The Applicant sustained injuries as a result.

3.  It is the Applicant’s case that at the time of the Accident, he was employed by the Respondent as a driver and was instructed in the course of his employment to drive the Vehicle to deliver the Respondent’s goods.

4.  The Respondent denied that the Applicant was its employee. It alleged that it had engaged the Applicant on 7 January 2021 as a sub-contractor to provide delivery services to it. The Respondent also did not admit the Accident or the injuries sustained by the Applicant.

5.  The Respondent was absent from the trial of these proceedings.

B.  Issues

6.  Section 5(1) of ECO provides:

“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 an employee, his employer shall be liable to pay compensation in accordance with this Ordinance.”

7.  The issues in dispute are:

(a)  Whether the Accident happened;

(b)  Whether the Applicant was an employee of the Respondent at the time of the Accident;

(c)  What injuries the Applicant sustained as a result of the Accident; and

(d)  What should be the amount of compensation under ECO.

C.  Witnesses

C1. The Applicant

8.  The Applicant gave evidence at trial. According to him, he enquired with the Respondent’s staff on 3 January 2021 about a post on Facebook recruiting a driver for delivery services. On 5 January 2021, the Applicant started following another driver of the Respondent around in a two-day trial period.

9.  On 7 January 2021, pursuant to an oral agreement, the Respondent formally employed the Applicant as its driver for delivery services (the “Oral Agreement”). According to the Oral Agreement:

(a)  The Applicant’s salary was $25,000/month.

(b)  It was a fixed salary with no commission or bonus. He would not have any managerial responsibility or responsibility to arrange for a substitute driver.

(c)  His working hours would be from 8 am to 6 pm, or until he finished delivering all the goods for the day.

(d)  The Respondent would assign delivery tasks to him daily and provide all necessary equipment, including a vehicle, to the Applicant.

(e)  All expenses arising from the Applicant’s work, including tolls, parking fees, gasoline expenses etc would be paid for by petty cash provided by the Respondent. The Applicant had to provide receipt of his expenses to the Respondent.

(f)  The Respondent would provide the vehicle and be responsible for arranging and paying for all repair, registration and insurance of the same.

10.  The Applicant gave evidence on how the Accident happened and that he was sent to Princess Margaret Hospital after the Accident. He sustained mid shaft fracture of his right femur and had an operation on 16 February 2021. He was transferred to Yan Chai Hospital for rehabilitation on 22 February 2021 and was discharged on 1 March 2021.

11.  I find the Applicant a credible witness and accept his evidence generally on matters such as his relationship with the Respondent, how the Accident happened and the injuries he sustained as a result of the Accident.

12.  However, for reasons explained below, I find his evidence on the circumstances leading to his signing of the “承包運輸合約提前解約協議書” dated 24 February 2021 (the “Discharge Agreement”) unsupported by contemporaneous evidence.

C2. The Respondent’s witness

13.  The sole shareholder and director of the Respondent is and was at all material times a Mr Law Ka Him (“Law”), who has filed a witness statement in these proceedings. However, as Law did not attend the trial, I will not take his witness statement into account in deciding this case.

C3. Joint expert

14.  The parties appointed Dr Peter Tio (“Dr Tio”) as their single joint expert. Dr Tio examined the Applicant on 10 January 2024 and prepared a medical report dated 15 February 2024 (“Single Joint Expert Report”). Pursuant to a consent order dated 17 September 2024, the Single Joint Expert Report was adduced as evidence at trial without calling Dr Tio.

15.  According to Dr Tio, the Applicant’s loss of earning capacity is 1.5%.

D. Whether the Accident happened?

16.  The Applicant’s evidence on the Accident and how it happened is consistent with the police investigation report and sketch. I accept his unchallenged evidence in this regard and find that the Accident did happen in the manner as put forward by the Applicant and set out in paragraph 2 above.

E.  Whether the Applicant was an employee of the Respondent at the time of the Accident?

17.  Section 2(1) of ECO defines “employee” as “… any person who has… entered into or works under a contract of service… with an employer in any employment, whether by way of manual labour, clerical work, or otherwise, and whether the contract is expressed or implied, is oral or in writing.”

18.  As held in Poon Chau Nam v Yim Siu Cheung (2007) HKCFA 10 HKCFAR 156, paragraph 18:

“The modern approach to the question whether one person is another’s employee is therefore to examine all the features of their relationship against the background of the indicia developed in the abovementioned case-law with a view to deciding whether, as a matter of overall impression, the relationship is one of employment, bearing in mind the purpose for which the question is asked. It involves a nuanced and not a mechanical approach, as Mummery J emphasised in Hall v Lorimer[26] (in a passage approved by the English Court of Appeal[27]):

‘In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.’”

19.  In the present case, first, I accept the Applicant’s unchallenged evidence that he was employed pursuant to the Oral Agreement and the terms thereof. He received a fixed monthly salary and was not entitled to any commission or sharing of profit or loss of the Respondent’s business. He therefore did not assume any financial risks in respect of the Respondent’s business. There is also no suggestion that he had to make any capital contribution to the same.

20.  Secondly, the Applicant had no managerial responsibility or responsibility to find a substitute driver in place of him. I accept the Applicant’s evidence that he only helped the Respondent to ask whether his friend was available to take up his role whilst he was hospitalised out of good will.

21.  Thirdly, the WhatsApp records between the Applicant and Law suggest that the Applicant had to report to the Respondent constantly in respect of his whereabouts, his meal breaks, when he picked up the Vehicle and when he returned the Vehicle after work. The Respondent also gave all instructions in relation to the Applicant’s daily delivery tasks to the Applicant. The Respondent was therefore in control of the Applicant’s work arrangements.

22.  Fourthly, the equipment used by the Applicant was provided by the Respondent.

(a)  There is no dispute that the Vehicle was provided by the Respondent to the Applicant. In point of fact, the Respondent has commenced proceedings in DCCJ 4781/2021 to claim against the Applicant for inter alia damage caused to the Vehicle.

(b)  I accept the Applicant’s evidence that the baskets he used for picking up the Respondent’s goods were also provided by the Respondent.

23.  Fifthly, the WhatsApp records between the Applicant and the Respondent’s accounting staff “Ah Man” support the Applicant’s case that he had to submit receipts of his expenses to the Respondent, who was responsible for all of the expenses. Such expenses include tunnel tolls, parking fees and gasoline fees etc. The WhatsApp records show that the accounting staff carefully matched the Applicant’s expenses with the information and receipts submitted by the Applicant and made detailed enquiries with the Applicant before she paid him any petty cash. She also specifically instructed the Applicant to refill gasoline from the petrol station instead of unlicenced fuel filling stations （倉油）because the latter would only provide handwritten receipts which may not be accepted for accounting purposes.

24.  Finally, I reject the Respondent’s allegation that the Applicant was its sub-contractor for the following reasons.

(a)  First, there was no evidence in these proceedings that the Applicant was the Respondent’s sub-contractor or that the parties had entered into the alleged written sub-contractor agreement.

(b)  Secondly, the Respondent never produced the alleged written sub-contractor agreement in these proceedings. In fact, it is the Applicant’s unchallenged evidence that in his application to set aside the default judgment in DCCJ 4781/2021, the Respondent’s counsel informed the Court that the Respondent was unable to provide the alleged written sub-contractor agreement to the Court.

(c)  Thirdly, insofar as the Respondent relied on the Discharge Agreement to allege that the Applicant was a sub-contractor, the Discharge Agreement simply does not support such an allegation. The Discharge Agreement merely provided that the Applicant was unable to continue to perform his services in an alleged one-year contract to the Respondent. The Respondent agreed to waive the payment in lieu of notice and pay the remaining contract sum of $11,607 to the Applicant. Although the Discharge Agreement referred to an attachment, nothing was attached to the same. The Discharge Agreement then set out certain terms, which the Respondent relied on in DCCJ 4781/2021 as the terms of the alleged written sub-contractor agreement between the parties.

(d)  However:

(i)  There was no evidence in these proceedings that the terms referred to in the Discharge Agreement were the terms of the alleged written sub-contractor agreement between the parties.

(ii)  The title of the Discharge Agreement is merely a label which does not affect the substance of the same.

(iii)  In any event, the parties only entered into the Discharge Agreement on 24 February 2021. The Discharge Agreement could not affect the parties’ relationship prior to 24 February 2021, in particular at the time of the Accident.

(e)  I therefore do not accept the Respondent’s case that the Applicant was its sub-contractor at the time of the Accident.

25.  For the reasons above, as a matter of overall impression, I find that the relationship between the parties was one of employment.

26.  On a related issue, in relation to the Discharge Agreement, the Applicant alleged that he signed the same under duress and/or as a result of misrepresentation from the Respondent. It is the Applicant’s case that on 24 February 2021, Law repeatedly demanded over WhatsApp that he sign the Discharge Agreement whilst he was in the hospital and under the effect of medication / anesthesia. He did not understand the effect of the document and could not read the terms of the Discharge Agreement on his phone. He asked to sign it after he was discharged from the hospital, but Law refused and insisted that he sign it immediately, threatening not to pay him the outstanding sum of $11,607 if he did not sign it.

27.  However, first, the Applicant’s case is not supported by the WhatsApp record on 24 February 2021. According to such record, at 15:29, Law appeared to have sent a voice message to the Applicant to ask him to sign the Discharge Agreement. At 15:32, the Applicant already sent the first version of the Discharge Agreement which he had signed back to Law.[1] The allegation that there were repeated demands and threats from Law is therefore not supported by contemporaneous evidence.

28.  Secondly, in the absence of any transcript of the alleged voice message from Law at 15:29 demanding the Applicant to sign the Discharge Agreement, there is no direct evidence on what was said by Law. The Applicant’s allegation of repeated demands and threats from Law is not supported by evidence.

29.  Thirdly, the Applicant has secondary level education and can read and write Chinese. It is unbelievable that he would sign the Discharge Agreement even though he could not read or understand the terms of the same as alleged.

30.  For the reasons above, I do not accept the Applicant’s allegation of duress and misrepresentation in relation to the entering of the Discharge Agreement. I also do not accept his reliance on the doctrine of non est factum.

31.  However, given my finding above that the Applicant was an employee of the Respondent at the time of the Accident, the absence of duress and/or misrepresentation in relation to the entering of the Discharge Agreement has no bearing on the outcome of these proceedings.

F.  What injuries the Applicant sustained as a result of the Accident?

32.  The Applicant’s evidence on the injuries he sustained as a result of the Accident and the diagnosis of mid shaft fracture of right femur is supported by medical reports and the Single Joint Expert Report.

33.  The Applicant was assessed by the Employees’ Compensation (Ordinary Assessment) Board (the “Board”) on 2 February 2023 to have suffered no loss of permanent earning capacity. He appealed against the assessment, which was reviewed by the Board on 3 August 2023. The Board reassessed the loss of permanent earning capacity to 0.5% and certified certain sick leave periods totaling 700 days. The Applicant lodged an appeal under section 18 of ECO.

34.  Section 18(3) of ECO empowers the Court on an appeal to confirm, reverse, vary or substitute the Board’s assessment with its own assessment. The burden is on the Applicant to demonstrate that the Board’s assessment is incorrect.

35.  It is established that whilst medical experts are usually called to give an opinion on the effect of the injuries on the injured, the Court should form its own view by reference to all the evidence in arriving at its own conclusion on the applicant’s permanent loss of earning capacity: Yu Chun Kit v Wong Wing Yau (The Bankrupt) formerly trading as Viewbond Cargo Service Company & anor (unrep, DCEC 1787/2015, 5 June 2017), paragraph 29.

36.  As stated in the Single Joint Expert Report, Dr Tio opined that the diagnosis of mid shaft fracture of right femur was compatible and consistent with how the Applicant was injured in the Accident. He also opined that the right femur fracture was solely contributed by the Accident and not contributed by any pre-existing condition.

37.  The Applicant complained of right greater trochanter pain and reduced agility of hip and right lower limb. Based on Dr Tio’s examination of the Applicant, the Applicant had symptoms of residual pain, stiffness and weakness, which were compatible with his post-fracture status. Dr Tio also detected mild stiffness over the internal and external rotation of the Applicant’s right hip and mild weakness of the Applicant’s right hip in all directions. The Applicant’s right thigh girth was 1.5 cm thinner than that of his left.

38.  Dr Tio opined that the Applicant should be able to resume his pre-injury job as a truck driver and delivery worker with reduced capacity and efficiency. With residual right hip pain, weakness and stiffness, Dr Tio expected the Applicant to have reduced work capacity in lifting and carrying heavy items, prolonged walking or standing for over 1 to 1.5 hours. The Applicant would also experience inconvenience in frequent climbing up and down a truck.

39.  Based on Dr Tio’s assessment, the Applicant sustains 1.5% whole body permanent impairment and loss of earning capacity as a result of the Accident.

40.  In forming my own view on the Applicant’s permanent loss of earning capacity, I accept Dr Tio’s evidence on the injuries, residual pain, stiffness and weakness suffered by the Applicant. I also accept Dr Tio’s opinion that as a result of such residual pain, stiffness and weakness, the Applicant would experience reduced capacity and efficiency in his pre-injury job.

41.  All in all, I accept Dr Tio’s assessment of a permanent loss of earning capacity of 1.5%.

G. What should be the amount of compensation under ECO?

42.  There is no dispute that at the time of the Accident, the Applicant’s monthly earning was $25,000/month pursuant to the Oral Agreement. The Court will therefore adopt this figure pursuant to section 11(1) of ECO.

G1. Section 9 Compensation

43.  The Applicant was 26 years old at the time of the Accident. According to section 7(1)(c) of ECO, the amount of compensation should be assessed with reference to 96 months’ earnings.

44.  As mentioned above, I find that the Applicant’s loss of earning capacity is 1.5%. I consider that the proper compensation under section 9 of ECO is: $25,000/month x 96 x 1.5% = $36,000.

G2. Section 10 Compensation

45.  As certified by the Board, after the Accident, the Applicant was granted sick leave from 12 February 2021 to 29 March 2022 and 4 April 2022 to 19 January 2023, ie a total of 700 days. The Applicant invited the Court to adopt such period of sick leave, which I agree.

46.  The amount of compensation under section 10 of ECO is therefore: $25,000/month x 700/30 months x 4/5 = $466,667.

G3. Section 10A Compensation

47.  The Applicant claims a total sum of $5,000 as medical expenses under section 10A of ECO. The Applicant has adduced documentary evidence in respect of a sum of $1,790. I find his evidence that he has spent roughly a remaining sum of $3,210 on his hospitalization in Yan Chai Hospital for seven nights, around eight follow-up medical visits and multiple wound cleaning sessions reasonable. I therefore allow the sum of $5,000 in full.

H. Summary

48.  By reason of the above, the amount of compensation under sections 9, 10 and 10A of ECO are:-

Section 9	$  36,000
Section 10	$466,667
Section 10A	$  5,000
TOTAL:	$507,667

49.  The Applicant is entitled to interest at half judgment rate from the date of the Accident (ie 12 February 2021) to the date of this judgment and thereafter at judgment rate until payment in full.

50.  I make a costs order nisi that the Respondent do pay the costs of the Applicant (including all costs reserved, if any), with certificate for counsel, to be taxed if not agreed.

51.  The Applicant’s own costs to be taxed in accordance with the Legal Aid Regulations.