BILAL MUHAMMAD v. LAW KIM WAH

DCEC802/2016

[2019] HKDC 178

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO.802 OF 2016

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JUDGDMENT

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1.  The applicant, Mr Bilal (Bilal), applies for compensation under s.9, 10 & 10A of Employees’ Compensation Ordinance, Cap.282 (the Ordinance)[1] from the respondent, Mr Law (Law). Law does not admit either liability or quantum.

2.  To establish his claim on liability, Bilal has to prove: - (1) on 2 Dec 2014, he was an employee of Law; and (2) on that day, he suffered personal injury by accident arising out of and in the course of such employment with Law.

3.  By his Answer, Law denies (1) above. Law says that Bilal was an independent contractor of Richment Ltd. (Richment) pursuant to a written “self-employed” agreement (自僱合約) in Chinese dated 19[2] July 2014 (the agreement) and, hence, not his employee on 2 Dec 2014. For (2) above, Law puts Bilal to strict proof.

4.  Bilal was formerly represented by lawyers assigned by the Director of Legal Aid. Law was also formerly represented by private lawyers. They now both appeared in person before me.

5.  Both Bilal and Law elected to give evidence. Law also called Mr Lo Chi Shing (Lo) as his witness. All 3 of them have adopted their respective written witness statements.

Background facts

6.  I find the following facts on the common evidence of both parties, undisputed evidence of one party and such documentary evidence before me that I accept and give full weight.

7.  Bilal is single. He was born in Pakistan in May 1995. He came to Hong Kong in 2006 as a dependent to his father. He completed secondary three in Hong Kong. He started working in about 2013. He had been a transport worker and café assistant, earning on average $10,000/month.

8.  By 2017, Law has been engaging in transportation business for 28 years.

9.  Richment was a private company incorporated in Hong Kong on 25 Sept 2013. In its annual returns made up to 25 Sept 2014 and 25 Sept 2015 respectively (the 2 Annual Returns), Law was one of its 2 directors.

10.  At all material times up to 2 Dec 2014, Law owned a light goods vehicle with registration number JP5916 (the LGV). The LGV had at its rear a tailboard, which could be raised up and down for purpose of loading and unloading goods.

11.  In June 2014, Law first came to know Bilal.

12.  On 19 July 2014, Law had produced the Agreement to Bilal for the latter to sign. Bilal signed on it. None had, however, signed on it on behalf of Richment. Bilal had incorrectly filled in the Agreement his date of “birth” as the date of “commencement” of his alleged self-employment with Richment.

13.  On 2 Dec 2014, Bilal met Law in Tuen Mun on board the LGV. Law later drove the LGV to take Bilal to Tuen Mun Hospital (TMH).

14.  Bilal attended Accident & Emergency Department of TMH at 1213 hours. His chief complaint was left hand crush injury at work. He complained of left hand pain and swelling. Medical examination revealed tender swelling over left hand dorsum with superficial abrasions. X-ray of left hand showed fracture of 2^nd, 3^rd and 4^th metacarpal shaft with displacement. He was admitted to orthopedic ward. He stayed as inpatient at TMH for 1 day.

15.  Bilal was on 3 Dec 2014 transferred to Pok Oi Hospital (POH). He had an operation of open reduction and fixation at POH on 5 Dec 2014. He was discharged on 6 Dec 2014.

16.  On 16 Dec 2014, Bilal notified the Labour Department that he suffered left hand injury in an accident at work involving the LGV in Tuen Mun on 2 Dec 2014.

17.  Bilal was referred to physiotherapy and occupational therapy for rehabilitation. He attended physiotherapy treatment[3] at POH for a total of 15 sessions from 22 Dec 2014 to 8 May 2015.

18.  After discharge from POH, Bilal also continued receiving follow-up treatments from POH until 31 Dec 2015. X-ray on 6 July 2015 showed fractures healed with full range of movement. But he had some residual pain over the fracture site region.

19.  Bilal was given continuous sick leave by doctors at TMH and POH from 2 Dec 2014 to 6 July 2015 i.e. a total of 217 days.

20.  On 24 Mar 2016, Richment was dissolved.

21.  On 21 Apr 2016, Bilal took out this application through his former solicitors.

22.  On 16 June 2016, the LGV was deregistered with the Transport Department.

23.  Bilal attended medical assessment on 30 May 2016, and review of assessment on 16 Nov 2016, by Employees’ Compensation (Ordinary Assessment) Board.

24.  According to Certificate of Review of Assessment issued on 30 Nov 2016 (Form 9), Bilal suffered from left hand fracture resulting in left hand stiffness, pain, scar and weakness. His period of absence from duty necessary as a result of the injury was certified to be from 2 Dec 2014 to 6 July 2015 i.e. a total of 217 days. His loss of earning capacity permanently caused by the injury was assessed at 2%.

Bilal’s case

25.  Bilal gave evidence that, through acquaintance’s introduction, he rang Law in about June 2014 to look for a job. He met Law 2 days later and Law employed him as a general worker.

26.  He worked 6 days a week and from 8am to 6pm. His salary was $13,000/month. It was increased to $15,000/month 3 months later. He was usually paid in cash on the 4^th or 5^th day of each month. He signed on wage slips kept by Law.

27.  Bilal said he used to work with Law in the LGV. He used to collect used oil from restaurants, send them to Law’s warehouse at Lo Fu Shan and re-distribute them to factories in Lok Ma Chau for industrial use. He said he was supervised and worked under Law’s control and instructions all the time.

28.  Bilal denies ever agreeing to be a contractor of Richment. He said he could not read Chinese and did not understand the Agreement. He recalls Law asking him to sign the Agreement by telling him that it signified that his salary was to be paid on the 5^th day of each month. He followed Law’s instructions to sign on it under such misapprehension as to its contents.

29.  On 2 Dec 2014 at about 1130 hours, said Bilal, he was working on board the LGV in Tuen Mun with Law. He tried to get out of the LGV in order to collect used oil. He pressed a button of the LGV to lower its tailboard but somehow it moved upwards and closed, as a result his left hand was crushed between the tailboard and the LGV (the Accident).

30.  After the Accident, Bilal felt painful and shouted for help. Law, sitting in the driver seat of the LGV, came to him and realized about the Accident.

Law’s case

31.  Law gave evidence that he purchased Richment in July 2014 in order to let Richment to employ his self-employed and new workers as required by his new customer.

32.  On 15 July 2014, said Law, he had a meeting with his self-employed and new workers (totaling 7-8) at a warehouse at Lo Fu Shan. He discussed with them, including Bilal and Lo, about Richment entering into employment contracts with them. He explained to them that they could all enjoy mandatory provident fund contributions, employees’ insurance and other employees’ benefits as Richment’s employees. He gave them several days to consider these suggestions and adjourned the meeting to 17 July 2014.

33.  On 18 July 2014, said Law, at same warehouse, self-employed workers, having discussed among themselves, indicated through Lo as their representative that they would like to remain self-employed and they all agree to enter into self-employed contracts with Richment in order to enjoy pay rise.

34.  On 19 July 2014, said Law, he as Richment’s representative and the self-employed workers signed on self-employed contracts. Bilal, one of Law’s self-employed workers, also signed on the Agreement. Law and Lo had made clear to them that they would not enjoy employees’ benefits whatsoever. They all indicated their understanding before they signed on their contracts.

35.  Lo said he was a friend of Law and he formerly worked as self-employed worker for Law. He gave evidence to similar effect in paragraphs 32 to 34 above.

36.  As self-employed worker of Law/Richment, Lo said he worked as driver. He was also responsible for arranging works, assisting in supervision of workers and making payments, and other administrative duties.

37.  Law recalled Bilal calling him on 1 Dec 2014 asking to meet him to get work (as Bilal said he had been out of work for days). On 2 Dec 2014, Bilal came to his house when he was about to deliver some goods by driving the LGV from Tuen Mun to Lam Ti. Bilal went on board the LGV to discuss with him. He later received a call and stopped the LGV answering the call. While he was doing so, Bilal suddenly said he would alight from the LGV.

38.  After he ended his call, Law alighted and heard Bilal calling his name. He located Bilal, who told him that he felt painful as his hand got injured.

39.  Law queried how Bilal could have allegedly injured his left hand by the tailboard in the manner he claimed (so did Lo, who said he was not present when Bilal was allegedly injured) and emphasized that he had never authorized Bilal to operate the tailboard of the LGV.

40.  Law said he had lent the LGV to Richment to enable it to take on transportation business. He had made clear to Richment’s self-employed workers, including Bilal, that, for safety reason, none apart from him and Lo was allowed to operate its tailboard. Lo said he had also reminded Bilal the same.

41.  As self-employed, said Law, Bilal did not come up to work as and when he was not free. Bilal would decide for himself whether to work and when to work. And Law said he did not work with Bilal every day. Law said he did not understand why Bilal sought compensation from him, as Bilal was on 2 Dec 2014 self-employed worker of Richment and not his employee at all.

Analysis

Credibility of witnesses

42.  Bilal impressed me as a simple-minded and honest witness. He gave consistent evidence and was not shaken under cross-examination. I accept his evidence.

43.  I find Law an evasive witness. He gave indirect answers and, sometimes, long and irrelevant answers. He also contradicted himself. I do not find him credible. Save for admissions, I reject such evidence of his inconsistent with those of Bilal.

44.  For reasons to be given below, I disbelieve Lo’s evidence regarding the Agreement. As he did not tell me the truth on this material piece of evidence, I do not find him credible either. Except for admissions, I also reject his evidence contrary to those of Bilal.

Liability

Employee or self-employed?

Inherent probabilities

45.  Bilal’s case is, I think, inherently more probable than Law’s case for the following reasons:

(1)   Having regard to Bilal’s background, including his young age of 19 and limited working experience before, I find it more likely that he would have elected to be an employee (to enjoy its benefit and protection at law) than to be a self-employed worker (to take on its business risk) as alleged by Law.

(2)   Law also said that Bilal was a “manual” worker who provided only his labour. By reason of that, it is, I think, also unlikely for Bilal to carry out a transportation business of his own. For instance, Bilal owned no vehicle to carry out such business as Law claimed Richment could have done so with the LGV lent to it.

(3)   Law never, I note, condescends into particulars the level of alleged pay rise, if any, Bilal and others could have enjoyed by electing to be self-employed workers of Richment (as opposed to continuing to be self-employed workers of his) as claimed.

(4)   While giving concrete reason (e.g. income limit for recipient of comprehensive social security benefit) for some workers to elect to be self-employed workers of Richment, Lo never, I note, gave any reason for Bilal’s alleged election to same effect.

The Agreement explained or misrepresented?

46.  I believe in Bilal’s evidence that he could not read Chinese in July 2014, that he did not understand the Agreement and that he signed on it as a result of Law’s misrepresentation about its contents. He was not given a copy of the Agreement after he signed. I reject such contrary evidence of Lo and Law.

47.  My reasons are as follows: -

(1)   Though Bilal had finished secondary three in Hong Kong, he did not come to Hong Kong until he reached about 11 in 2006. Against such background, I believe in Bilal that he could not read Chinse in July 2014 as he said.

(2)   Under cross-examination, Law saw fit to “disagree” when Bilal put that he could not read Chinese. He did not answer “unsure”. However, paragraph 5 of his witness statement prepared by his former solicitors reads: “I am also not sure whether Bilal can read Chinese or not (italics supplied)”.

(3)   Under cross-examination, Lo also “disagreed” about the suggestion that Bilal could not read Chinese. In re-examination, he even claimed that “the addresses for goods collection were all written down in Chinese and that it was Bilal who went out to collect goods himself”. Had such evidence been true, one imagines Lo would have so stated explicitly in his witness statement prepared by Law’s former solicitors. But nowhere in paragraph 6 therein[4] did Lo specifically say that Bilal could read Chinese or read Chinese addresses to collect goods as he belatedly advanced for the first time in re-examination.

(4)   Lo claimed in cross-examination to have himself “explained” the contents of the Agreement to Bilal. Had Bilal himself been able to read Chinese as claimed, one asks why it was felt further necessary for Lo (and Law) to “explain” such contents to him.

(5)   Had Lo (and Law) “explained” the Agreement to Bilal to avoid any possible misunderstanding of Bilal or possible claim to that effect (after all, a South Asian was asked to sign on a document fully written in Chinese), one fails to see why there was no record of such explaining on the face of the Agreement. Bilal asked Lo the question why there was no such record. Lo never answered. I cannot but conclude there was in fact no proper explanation of the contents of the Agreement to Bilal by Lo (and Law).

(6)   Bilal’s putting down his date of birth as the commencement date of alleged self-employment in the Agreement is, in my view, more consistent with Bilal not being able to read Chinese (and not being able to understand properly the contents of the Agreement) than Law’s evidence of it being a typographical error of Bilal, which he negligently had not required Bilal to correct.

48.  At law, an alleged independent contractor agreement whose contents had been misrepresented could not be relied upon by a respondent to oppose application for employees’ compensation: Lam Sik v Sen International Ventures Corp (HK) Ltd [1994] 3 HKC 405, 411D-F, per V Bokhary HHJ (as she then was).

Relationship with Richment or not?

49.  I also accept that Bilal had never agreed to enter (and had never entered) into any or alleged contractor/self-employed relationship with Richment and that Law had never so discussed with Bilal as Law and Lo claimed. I disbelieve Law and Lo on that.

50.  I accept from Bilal that from June 2014 to 2 Dec 2014, he had only entered into relationship with Law and no others for work. I also reject evidence of Law and Lo to the contrary.

51.  On top of paragraphs 45 & 46 above, my additional reasons are as follows:

(1)   Despite the alleged considerable length of time, the alleged considerable amount of discussion leading to it and its alleged importance, none surprisingly signed on the Agreement on behalf of Richment. The explanation of “omission or negligence of my colleague” offered by Law sounds incredible to me against such background he claimed.

(2)   Law claimed under cross-examination to be a shareholder of Richment but he in fact held no share of Richment as shown in the 2 Annual Returns.

(3)   The Agreement does not, I think, read or work like a “self-employed” contract as its name suggests. Material provisions are absent and those present are self-contradictory.

(a)   There is surprisingly no provision about e.g. what service Bilal is to provide Richment as its alleged independent contractor, how such service is to be provided by Bilal to Richment, and how much contractor fee is payable from Richment to Bilal for such service (or how such contractor fee is to be calculated).

(b)   Instead, it employs words of “wages” (工資), “salary” (薪金) and “pay day” (發薪日) commonly found in an employer-employee relationship.

(c)   It makes it mandatory for Bilal to obey such hours of work and rest prescribed and to follow such change as shall be directed. It is more consistent with Bilal working as an employee of Richment than carrying on a business of his own.

(4)   On Law’s admissions, such provision in the Agreement of   Richment making “salary” payment in form of cheque to Bilal was never acted upon. For unexplained technical problem encountered by Richment in accounting or accounts, Law agreed that he himself or through Lo made cash payment to Bilal on behalf of Richment.

52.  Hence, I have decided to give no weight to the Agreement.

Nature of relationship between Bilal and Law

53.  The modern approach to the question whether one person is another’s employee 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 is one of employment. It involves a nuanced and not a mechanical approach: Poon Chau Nam v Yim Siu Cheung (2007) 10 HKCFAR 156, 167F-168B, per Ribeiro PJ.

54.  If, on the facts viewed objectively and applying the indicia of employment, one is properly to be regarded as another’s employee, the Ordinance applies and any agreement seeking to remove that person from its scope is void under s.31. It was for the court and not for parties to evaluate the facts and determine their legal relationship: Poon Chau Nam, supra, 180C-D, 181C-D,  per Ribeiro PJ.

55.  I therefore proceed to examine objectively all the features of the relationship between Bilal and Law (as I have found above and below) against the indicia of employment with a view to determine their legal relationship.

Indicia of employment

56.  On Bilal’s evidence I accept and on admissions from Law and Lo, I further find as follows:

(1)   Bilal was a general worker providing his manual labour to Law. He did not hire any helper of his.

(2)   His duties were to collect used oil from restaurants, send them to Law’s warehouse at Lo Fu Shan and re-distribute them to factories in Lok Ma Chau for industrial use. He received trainings from Law.

(3)   He worked 6 days a week and from 8am to 6pm.

(4)   He used to work with Law in the LGV. He himself provided no vehicle or equipment of his own

(5)   He was supervised and worked under Law’s control and instructions all the time.

(6)   He was paid wages in cash by Law on the 4^th or 5^th day of each month. His monthly wages were $13,000 when he started working for Law in June 2014. It was increased to $15,000/month 3 months later and remained so on 2 Dec 2014.

(7)   As such, he took no financial risk at all. He was not responsible for any investment or management.

(8)   Neither did he have any opportunity of profiting from sound management in the performance of his task.

57.  Taking an overall view of the above picture, as inherent probabilities indicate, I find that Bilal was Law’s employee from June 2014 to 2 Dec 2014.

Accident or not?

58.  Lo and Law did not witness the Accident. Indeed, none has witnessed the Accident.

59.  But the followings are, I think, supportive of the happening of the Accident testified by Bilal:

(1)   Bilal’s left hand injuries on medical examination at Accident & Emergency Department of TMH on the same day are consistent with his having injured his left hand in the manner he said.

(2)   As Law admitted in the box, after finishing his call, he found Bilal and saw him holding his left hand, and Bilal said to him that he was in great pain.

(3)   As Law admitted in his witness statement, Bilal had then complained to him of having his hand stuck between the tailboard and the LGV (I give no weight to denial to that effect made by Law in cross-examination).

(4)   As Law further admitted in his witness statement, he also noticed swelling on the back of Bilal’s left hand (I again give no weight to Law’s contradictory answer of “seeing no obvious injury” in cross-examination).

60.  It is, I think, unlikely for Bilal to have injured his left hand himself as seriously as causing fracture in order to make an uncertain clam of compensation against Law.

61.  Bilal was, as I find above, entrusted with duties of collecting used oil and re-distributing them. As a manual general worker, he used to work with Law in the LGV. Against such facts, I find it inherently improbable for Law to prohibit Bilal from operating the tailboard of the LGV for working purpose as claimed. I prefer Bilal’s evidence on this point and find that he was not prohibited from operating the tailboard of the LGV for work.

62.  Notwithstanding queries raised by Lo and Law in their evidence, I think it remains possible for Bilal to have his left hand crushed between the LGV and the tailboard from its closing. The tailboard could have been out of order on that day. Or that Bilal could have pressed the wrong button(s).

63.  Notwithstanding the absence of eye-witness, I find that Bilal did suffer the Accident in the way he said in paragraph 29 above. Be that the tailboard malfunctioned or that the wrong button(s) was/were pressed, injures to Bilal’s left hand caused by unexpected closure of the tailboard remain, I think, an “accident” under the Ordinance.

Arising out of and in the course of employment?

64.  The presence of Bilal on board the LGV on 2 Dec 2014 is, I think, suggestive of Bilal being on duty that day with his employer i.e. Law. I prefer and accept Bilal’s evidence at paragraphs 29 & 30 above.

65.  In particular, I can see no reason for Bilal to operate the tailboard of the LGV unless that was something required of him out of his employment with Law on that day as he said.

66.  Law and Lo did not give any plausible reason(s) otherwise.

67.  In any event, under s.5(4)(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. I do not find contrary evidence before me.

68.  I therefore hold that, on 2 Dec 2014, personal injuries by accident arising out of and in the course of his employment with Law was caused to Bilal.

69.  Were Bilal prohibited from operating the tailboard of the LGV and he suffered personal injuries by so operating in contravention of Law’s order and without Law’s instructions, I think Bilal did so for the purposes of and in connection with Law’s business. The Accident shall still be deemed to arise out of and in the course of his employment of Law under s.5(4)(b).

Conclusion on liability

70.  Hence, under s.5(1), Law shall be liable to pay compensation to Bilal in accordance with the Ordinance.

Quantum

Compensation for permanent partial incapacity

71.  There is no appeal by either party against the assessment of loss of earning capacity of Bilal in Form 9 i.e. 2%. Compensation under s.9 is therefore to be assessed on the basis of the said assessment: Ng Ming Cheong v. Mass Transit Railway Corp [1997] HKLRD 1231, 1236H, per Le Pichon J (as she then was).

72.  For our purpose, for an employee like Bilal under 40 at the time of the Accident, the amount of compensation is a lump sum equal to 96 month’s earnings times the said 2% assessment of loss of earning capacity i.e. $15,000 x 96 x 2% = $28,800.

Compensation for temporary incapacity

73.  Under s.10(2), a period of absence from duty certified to be necessary by registered medical practitioners or by Ordinary Assessment Board shall be deemed to be a period of total temporary incapacity irrespective of the outcome of the injury.

74.  As Bilal was given 217 days of sick leave by registered medical practitioners and also assessed in Form 9 to require the same number of days of absence from duty necessary as a result of his injuries in the Accident, it shall be deemed that he had suffered from 217 days of total temporary incapacity.

75.  Under s.10, the compensation shall be periodic monthly payments at a rate of 4/5 of Bilal’s monthly earnings in the case of total temporary incapacity during the said period of temporary incapacity after the Accident i.e. $15,000 x 4/5 x 217/365 x 12 = $85,611.

Payment of medical expenses

76.  Under s.10A, Law is also liable to pay the medical expenses for such medical treatments received by Bilal in respect of his injuries in the Accident.

77.  Having regard to provisions of 3^rd Schedule to the Ordinance and the Statement of Accounts issued by Hospital Authority to Bilal[5] (evidencing such amounts that were paid by him or waived from him for treatments he had received), Law is also liable to pay Bilal total medical expenses in a sum of $1,610.

Quantum summary

78.  The total amount of compensation payable to Bilal from Law is $116,021 i.e. $28,800 (s.9) + $85,611 (s.10) + $1,610 (s.10A).

Disposition

79.  Accordingly, I enter judgment in Bilal’s favour against Law in the sum of $116,021.

80.  I further order Law to pay Bilal interest on the said judgment sum of $116,021 at half judgment rate from 2 Dec 2014 to the date of this judgment and thereafter at judgment rate until full payment.

Costs

81.  As a general rule, costs normally follow the event (i.e. to be paid by the loser to the winner to compensate for such costs incurred by the winner) in final proceedings.

82.  I therefore make an order nisi as to costs as follows:

(1)   Law do pay Bilal the costs of this application, including all reserved costs and the costs of this trial, at such amount to be taxed if not agreed; and

(2)   Bilal’s own costs while he was legally-aided shall be taxed in accordance with Legal Aid Regulations.

83.  If both Bilal and Law do not apply to vary the captioned costs order nisi by 13 Mar 2019, the said order nisi shall become absolute i.e. effective and binding on them. Any application to vary shall be made by way of summons issued from Court Registry, specifying alternative costs order(s) sought and the grounds in support thereof, and served on the opposite party on the same day.

Miscellaneous

84.  I direct that this judgment be interpreted to Bilal and/or Law by English/Urdu and/or English/Chinese interpreter(s) if he/they so request(s). He/they shall contact court clerk in good time to make prior arrangement and attend District Court building as scheduled to receive such service once for free. Any changes should also be advised by him/them to court clerk in good time before scheduled appointment date(s) and time(s).

85.  Finally, the judgment and order herein shall be drafted, filed and served by court clerk on Bilal, Law and the Director of Legal Aid.