TING KWOK KEUNG v. TAM DICK YUEN t/a TAM DICK YUEN ENGINEERING AND OTHERS

CACV 751/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 751 OF 2000

(ON APPEAL FROM DCEC 382 OF 1998)

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J U D G M E N T

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Hon Mayo VP (giving the judgment of the Court):

1. This is an appeal by the respondents from an award made by Deputy Judge Lok in the District Court to the applicant in respect of an award made under the Employees' Compensation Ordinance, Cap. 282.

2. The award was made in relation to an accident which occurred on 19 July 1996. The applicant was a welding worker. While working he fell from a height and sustained quite serious injuries. The most serious was a fracture of his right femur which resulted in a partial permanent incapacity.

3. There were essentially two issues requiring resolution before the Judge. The first related to the applicant's status at the time of the accident and the second was to the quantum of the award.

4. The question relating to the applicant's status was not without some difficulty. What had to be resolved was whether the applicant was indeed an employee or whether as an independent contractor he was an employer.

5. The applicant claimed that in early July 1996 Lau Chun Pang ("Pang") who is the brother of R3 telephoned him and asked him to work for either R1 or R2 who were erecting a metal hoarding around a building which was being demolished at Yeung Uk. It should be noted that R1 was a sub- contractor of R2. The applicant gave evidence that he and Pang and R3 often worked together. He was employed by them on a day to day basis. He did not accept that he had ever in the past himself acted as a sub-contractor. He said that Pang on a number of occasions had done so. The way it worked was that a contractor or sub-contractor would sometimes even during the currency of a job propose to one of the regular workers that for an agreed sum he would either sub-contract or sub-sub-contract a portion of the work to be done for an agreed capital sum. If the amount was agreed the worker would assume full responsibility for the work which would include the obligation to pay the wages of the other men working on that part of the project. To add a further refinement often the worker would continue to receive his daily wage and the amount which was paid would be deducted from the capital sum payable under the sub-contract.

6. What seems to emerge from the evidence which was before the court was the fluid nature of the working arrangements which were adopted on working sites.

7. Be that as it may the applicant gave evidence that a few days after the commencement of the work he was approached by Pang and R1 and asked if he would like to become a sub-sub-contractor and do the job which would take 45 days for $410,000. He agreed to this and a written contract was concluded to this effect. Some time later additional requirements were added to the work and the applicant had a dispute with Pang and R1 as to what should be done. He insisted upon being released from his commitment as he did not think that all of the work could be finished in the time prescribed and there was a penalty clause for delay of $3,000 per day. This was eventually agreed and it was further agreed that the applicant would continue working on the job as a daily paid worker. It was subsequent to this that the accident occurred.

8. The applicant called one witness Mr Kam Chun Kam a fellow daily paid worker whose evidence so far as it went supported the applicant's version of events.

9. R1, R3 and Pang all gave evidence. The thrust of their evidence was to the effect that the applicant continued to be a sub-contractor until after the accident. It was only after the occurrence of the accident that R3 took over the sub-contract. There was also evidence to the effect that on two previous jobs the applicant had acted as a sub-contractor and there was evidence of a transfer of $20,000 to the applicant in support of this.

10. There was also the evidence of the factory inspector from the Labour Department Mr Lo who investigated the accident and took two statements from the applicant. The first was taken shortly after he left hospital. In that statement he said that he and R3 were "Chau Sam Sha" and went on to describe their roles which were entirely consistent with them being sub-contractors. Mr Lo made a contemporaneous written note of the interview which he read over to the applicant who signed it. He also took a second statement from the applicant when he attended at his office and in effect claimed that he had only been a daily paid worker. It was put to Mr Lo that the applicant had said to him that there had been discussions with Pang concerning his status and that the applicant had been told that if necessary the statement could be added to or amended later on.

11. Mr Lo had said that he did not remember any such exchange. However he went on to say that had there been any such exchange he would undoubtedly have recorded it in the first statement.

12. This very briefly summaries the issue which had to be determined by the Judge concerning the applicant's status.

13. For the reasons he gave in his judgment the Judge held that the applicant had been an employee at the time of the accident.

14. In doing so the Judge had held that he was satisfied that the applicant was a truthful and reliable witness. He had also formed a favourable view of the evidence of Mr Kam a fellow employee of the applicant who had given evidence in his support.

15. Also perhaps partly by inference the Judge had not formed a favourable impression of any of the witnesses giving evidence on behalf of the respondents.

16. Mr Clough for the respondents submitted that on the basis of the evidence which lay before the Judge he had been plainly wrong to make the finding of fact that he had.

17. Mr Sakhrani for the applicant argued that it was open to the Judge to make the findings he had. He further submitted that it was only if the finding was clearly unsustainable that it would be appropriate for the Court of Appeal to interfere with his findings. This is undoubtedly correct. The respondents have to surmount a very high threshold if they are to succeed on this appeal.

18. The approach adopted by Mr Clough was to select two or three significant items of evidence and then argue that on the basis of this evidence it was manifest that the applicant had been a sub-contractor at the time of the accident.

19. The first item of evidence referred to by Mr Clough was the note which was admitted as evidence while Pang was testifying. He had been giving evidence to the effect that when he had been working with the applicant at Lyndhurst Terrace they had both been doing so as sub-contractors. The applicant had denied this. The note which had been exhibited as R1 was translated and read as follows:

"Paid to Kwong	$193,400.00
Paid to Keung	$250,768.00
Paid to Pang wages	$43,625.00
Paid to Kam wages	$12,000.00
Lyndhurst Street Paint	$9,400.00
Bought welding gas	$13,500.00
Bought materials	$216,488.00
Total project price	$800,000.00
Balance	$60,819.00
Per person	$20,273.00"

20. Attached to the note was a slip of paper which had been obtained from an ATM machine which indicated that the sum of $20,273.00 had been transferred by Pang to the applicant's bank account. This was not disputed.

21. The applicant had given evidence that he had received the said sum but that it represented his wages and a bonus which had been paid to him by Pang.

22. No plausible reason was given as to why Pang should out of the goodness of his heart see fit to pay a bonus to him.

23. More importantly no attempt was made to explain away the note which had been made on the slip of paper which undoubtedly indicated a division of the net proceeds amongst the participants. Surprisingly the Judge simply accepted the applicant's evidence and rejected Pang's.

24. The next item of evidence referred to by Mr Clough was the declaration made by the applicant to Mr Lo the official from the Labour Department seized with the responsibility of investigating the accident. It needs to be added that the declaration was a statutory declaration.

25. The English translation was as follows:

"(Translation)
Declaration

1. I, Ting Kwok-keung, identity card / passport no.: C548012[2], C.C.C.: 0002 0948 1730, male / female, date of birth: 20 November 1965, currently residing in Room 2803, Yum Heng House, Shek Yum Estate East, telephone no.: 2420 2526, solemnly and sincerely declare that:-
I hereby make the following declaration concerning the accident which took place on the site of Pacific Dyeing Works Limited at 148-178 Yeung Uk Road on 19 July 1996:
At the material time, I was working for Tam Dick Yuen Engineering as a metal worker on the said site. I have some 10 years of similar experience and had worked on the site for about 16 days. The principal contractor of the site was "Progress Construction Limited" which undertook to demolish the premises of Pacific Dyeing Works Limited in the said site, while I had to erect a metal hoarding.
On the day of the accident, I started working at 9:00 a.m. I worked near the refuse dump. My main duty was to weld the I-beams together. At about 11:00 a.m., (inversion) the worker who worked with me went to the other side to prepare materials, and I moved to the eating area from the corrugated (asbestos) sheet canopy opposite the site to help other co-workers. When I got there, I (deletion) walked past the I-beams and onto the canopy at Pacific Dyeing Works Limited. I wanted to go onto the canopy to get some water to drink. After I had taken two steps on the canopy, the canopy suddenly broke. I fell onto the ground from the broken canopy, and was taken to Yan Chai Hospital by paramedical officers afterwards.	(Sd.) Ting Kwok-keung (Sd.) Ting Kwok-keung (Sd.) Lo Yiu-keung 6 August 1996

Supplementary questions are as follows:

1	Q:	At the time of the accident, from where did you fall down?
	A:	From here. It was intact before the accident and was about 13 feet in height.
		(Sd.) Ting Kwok-keung
2	Q:	While erecting the I-shape hoarding (sic), did you have to work on top of the inclined I-beams?
	A:	I had to stand on the inclined I-beams to pass over the materials and do the welding work.
3	Q:	For standing on the inclined I-beams, (deletion) did the company provide any safety measures (sic) (facilities)?	(Sd.) Ting Kwok-keung (Sd.) Lo Yiu-keung 6 August 1996
	A:	No.
4	Q:	Did the company provide any safety belts or (courses on) safety knowledge?
	A:	No.
5	Q:	Is it (deletion) possible to build a working platform for the workers to work on it, so that they didn't need to work on top of the inclined I-beams?	(Sd.) Ting Kwok-keung (Sd.) Lo Yiu-keung 6 August 1996
	A:	There is some difficulty in doing so. Since there is an eating area behind the wall, it is difficult to build a working platform, as shown in the following figure:
6	Q:	How did you get onto the inclined I-beams to work?
	A:	By a wooden ladder.
7	Q:	While erecting the I-shape hoarding at the time of the accident, did you have to work on top of the canopy at Pacific Dyeing Works Limited?
	A:	Since some tools and water had been placed on top of the canopy during the work, we sometimes had to go onto the canopy to collect them and water as well. Sometimes, when going from an inclined I-beam to another, I (deletion) would go there via the top of the canopy.	(Sd.) Ting Kwok-keung (Sd.) Lo Yiu-keung 6 August 1996
8	Q:	If you have to go from an inclined I-beam to another, can you first go down to the ground floor before going up to the other by a ladder?
	A:	Yes, I can.
9	Q:	Did the company provide any notice or orally inform workers not to walk on top of the canopy?
	A:	No.
10	Q:	When you fell onto the ground, were there any co-workers working in the vicinity?
	A:	Yes. Fat Fai and Ah Wing were working in the vicinity, and Ah Kai may be nearby as well.
11	Q:	Were you employed by Tam Dick Yuen Engineering?
	A:	I and Lau Kong were (deletion) 'Chau Sam Sha'. We contacted (deletion) workers to come to work.
	A:	We were given wages to hire workers. We and Tam Dick Yuen and Lau Chun Pang had an oral agreement. Tam and Lau had given us $410,000 for this work. I and Lau Kong had not set up any company or obtained any business registration. We might have pecuniary benefits or losses in this work.

2. I make this declaration sincerely and solemnly believing the same to be true to the best of my knowledge and belief and by virtue of Section 4(1)(e) of the Factories and Industrial Undertakings Ordinance, Chapter 59, Laws of Hong Kong.

3. Dated the 6th day of August 1996.

Declarant [Signature]: Ting Kwok-keung

This declaration is taken by Factory Inspector Lo Yiu-keung of the Labour Department."

26. It is not necessary to add either the photograph or the plan which was attached to the declaration.

27. The way the applicant dealt with this evidence was to state that at the time when he made the declaration he had been confused as he had just come out of hospital. As earlier indicated he also said that he had informed Mr Lo that there was some uncertainty concerning his employment status and that Mr Lo had agreed that a further statement clarifying matters could be given later. Effectively Mr Lo denied that this had been agreed between them.

28. The applicant did make a further declaration approximately five weeks later on 11 September 1996. It was in this form:

"(Translation)
Declaration

1. I, Ting Kwok-keung, identity card / passport no.: C548012[2], C.C.C.: 0002 0948 1730, male / female, date of birth: 20 November 1965, currently residing in Room 2803, Yum Heng House, Shek Yum Estate East, telephone no.: 2420 2526, solemnly and sincerely declare that:-

This declaration is supplementary to the one made on 6 August, 1996.

At first I and Lau Kong went to the site to negotiate the contract of the hoarding work with Tam Dick Yuen and Lau Chun Pang. Initially the contract stipulated that the work should be finished within a budget of $610,000. Due

'incident'

to changes in the work after the accident, the contract had been voided. I don't know the terms in the contract negotiated by Lau Kong and Tam Dick Yuen afterwards. The wages for my 16 days of work were given to me by Lau Kong. Lau Kong's mobile phone number is 9087 5599.

2. I make this declaration sincerely and solemnly believing the same to be true to the best of my knowledge and belief and by virtue of Section 4(1)(e) of the Factories and Industrial Undertakings Ordinance, Chapter 59, Laws of Hong Kong.

3. Dated the 11th day of September 1996.

Declarant [Signature]: Ting Kwok-keung

This declaration is taken by Factory Inspector Lo Yiu-keung of the Labour Department."

29. It is noteworthy to add that the parties agreed the Chinese characters for "accident" and "incident" are the same. Mr Lo gave evidence that it was his understanding that when the applicant was making his second declaration he had definitely been under the impression that the applicant had been referring to the accident which had occurred.

30. The Judge appears to have simply accepted the applicant's explanation that he had been confused as a result of his injuries when he had made the first declaration. He did not make any serious attempt to analyse Mr Lo's evidence in this connection.

31. One of the reasons for citing all of the contents of these declarations is to provide a complete context to the matter.

32. It will be noted that the applicant did not apparently have any difficulty in giving a detailed description of the circumstances leading up to the accident and how it actually occurred.

33. This would not appear to be consistent with someone being in such a confused state of mind as to be unable to recollect what his true employment status was.

34. It is also apparent from the transcript of the proceedings below that the applicant was fully aware that the question of the status of his employment was a live issue immediately before he made the first declaration. In his evidence he referred to conversations he had had particularly with R3 when there were discussions concerning the applicant's employment status.

35. What is perhaps of greatest significance is that the Judge attached so little importance to the evidence of Mr Lo.

36. He could truly be said to be an independent witness. There was every reason to suppose that he was an experienced person who was discharging a statutory function. He made a note of what was said by the applicant and additionally said that had the applicant indicated that there was any uncertainty as to his employment status he would have recorded this.

37. Even the second declaration did not satisfactorily clarify the outstanding situation. What the applicant says falls short of a clear statement that he was an employee at the time of the accident and give particulars of his employer.

38. There were other unsatisfactory aspects of the applicant's case. As earlier indicated the Judge placed considerable reliance upon Mr Kam's evidence.

39. It should be observed that he was giving detailed evidence concerning conversations which had allegedly taken place almost 4 years earlier when the subject matter of the evidence was only of peripheral interest to him. He was not himself a sub-sub-contractor and it was, even on his evidence, only after the occurrence of the accident that it had been suggested that he might like to become a sub-contractor. In fact it would appear that he was caught out in his evidence in a material way.

40. He gave evidence concerning the conversation which had taken place between the applicant and Pang on the subject of the variation to the terms of the contract after the applicant had become a sub-contractor. When the applicant gave evidence concerning this he said that the conversation had taken place over the telephone.

41. Having regard to all of this it is surprising that the Judge was prepared to attach as much weight as he did to Mr Kam's testimony.

42. What is of particular importance in this appeal is the amount of weight the Judge attached to the applicant's evidence. He proceeded on the basis that he was a truthful and reliable witness when there would appear to be good reason to suppose that he was nothing of the sort.

43. Having regard to the matters referred to by Mr Clough there must be a large element of uncertainty as to whether the Judge could properly have reached the conclusion he did. It may perhaps be the case that none of the matters specifically referred to by Mr Clough would of itself justify us in calling in question the way the Judge dealt with the matter. However the cumulative effect of all these matters is such that we consider that Mr Clough has succeeded in surmounting the very high threshold of convincing us that this is a case which calls for the intervention of this court. In our view if the Judge had properly weighed and considered all of these matters he would have been driven to the conclusion that at the time of the accident the applicant was a sub- contractor and not an employee and accordingly his claim should have been dismissed.

44. We heard submissions from counsel on whether we should order a retrial in the event that we were satisfied that the Judge had erred. Having given the matter due consideration we have come to the conclusion that no useful purpose would be served by this as it would inevitably be the case that the applicant would not succeed on any retrial of his claim.

45. In the time which was available we were unable to hear the issue on quantum. As it transpires it is not now necessary to hear this.

46. The appeal is allowed and we make an order nisi that the respondents are to have their costs both here and below and that the applicant's costs are to be taxed in accordance with the Legal Aid Regulations.