KWOK CHI LUNG v. KWAN POI CHI WALTER t/a BIG APPLE (CENTRAL)

[English Translation – 英譯本]
DCEC 689/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 689 OF 2005

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DECISION

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Background

1. The Applicant Mr. Kwok Chi Lung (“Kwok”) was employed by the Respondent Mr. Kwan (“Kwan”) as a motorcycle takeaway deliveryman, working at “Big Apple” fast food shop operated by Kwan. At 1 p.m. on 21 February 2004, Kwok was assigned to deliver takeaway food to the Landmark in Central. After the delivery, on his way back to the fast food shop which was located in Western Street, Sai Ying Pun, he met with a traffic accident along Connaught Road West when the motorcycle he was riding, which was provided by Kwan, ran into a concrete barrier on the roadside, as a result of which his left knee was injured.

2. Kwok makes an application pursuant to sections 9, 10 and 10A of the Employees’ Compensation Ordinance (“the Ordinance”), claiming statutory compensation from Kwan in respect of his work injury.

3. Kwan does not dispute Kwok’s claim that he was injured in the course of work. According to the Answer filed by Kwan, he opposes Kwok’s application for the following reasons: (1) Kwok has neither submitted to Kwan the certificates of sick leave since 24 March 2004 nor notified him of the same, (2) Kwok has not submitted himself to medical examination by a medical practitioner named by Kwan as the employer, as stipulated under section 16(4) of the Ordinance.

4. Kwan’s evidence also mentions that he has sustained loss by reason of Kwok’s failure to return the motorcycle as scheduled. However, as I have explained in court, in the present employees’ compensation case it is not for me to deal with a claim by Kwan as employer for the alleged loss. Such loss has nothing to do with the present application for employees’ compensation, nor can it be used as a defence.

5. The issues in the present case are:

(1) Can Kwan rely on Kwok’s failure to submit to Kwan the certificates of sick leave since 24 March 2004 as a defence?

(2) Is Kwan not liable to pay any compensation by reason of Kwok’s failure to submit himself for examination by a medical practitioner named by Kwan as required by section 16(4)?

(3) The amount of employees’ compensation payable by Kwan if Kwok is entitled to compensation under sections 9, 10 and 10A. 

Can Kwan rely on Kwok’s failure to submit to Kwan the certificates of sick leave since 24 March 2004 as a defence? 

6. It is not in dispute that Kwok did provide sick leave certificates for the period between 21 February and 24 March 2004 to Kwan or one Miss Law of the fast food shop. On Kwok’s evidence, he did not provide to Kwan sick leave certificates after 24 March because Kwan refused to take them and told Kwok that he was no longer a staff member of the fast food shop as someone had been employed to replace him. Kwok claimed that he did lodge a complaint to the Labour Department for unfair dismissal by Kwan but, having investigated the matter, the Labour Department informed him that there was insufficient evidence to enable the Department to entertain his complaint.

7. In the present case, nowhere in his Answer, his so-called “submission in opposition” or his witness statement does Kwan mention that Kwok had been dismissed. Among the documents submitted by Kwan to the court is a document signed by Kwok on 10 March 2004 which, Kwan alleges, contains Kwok’s admission that he informed Kwan by phone on 8 March that “he was still suffering from work injury, but as the company needed someone to deliver the food by vehicle, he asked Kwan to hire someone else”.

8. Kwok admits having signed the document that Kwan refers to but claims that the content of the document was prepared by Kwan. Although Kwok did read the document and sign on it, his aim was to receive the payment that Kwan referred to in the document after signing it. And as a matter of fact, after Kwok signed the document on 8 March, a cheque for the sum of $1,930, representing Kwok’s wages for February and part of the work injury compensation for that month as mentioned in the document, was issued by Kwan on 12 March and received by Kwok with acknowledgment thereof.

9. In the course of cross-examining Kwok, Kwan pointed out that in his telephone conversation with Kwok on 8 March, he scolded Kwok for taking the motorcycle away and failing to follow the proper procedure in taking leave, and upon hearing that, Kwan admitted, Kwok lost his temper (the term Kwan used was “infuriated”) and said impetuously, “Big deal! I might just as well quit and you can hire someone else”.

10. On the evidence adduced by both parties, in particular the Answer (or the so called “submission in opposition”) filed by Kwan, which has not pleaded Kwok’s resignation as a defence, I do not think the telephone conversation between Kwok and Kwan on 8 March can constitute evidence of Kwok’s termination of his employment contract or his consent to the contract being terminated by Kwan. It is Kwok’s case that, after the end of the sick leave period, he did not return to the fast food shop for sick leave clearance because sometime in late March and April, Kwan claimed that Kwok had been dismissed and also refused to accept from Kwok the sick leave certificates for the period after 24 March or pay any form of compensation.

11. In any event, Kwok initiated this application for compensation on 28 May 2005 and, in compliance with the formalities and procedures, has provided the documents that he relies on, including all the medical reports, sick leave certificates issued by a doctor, and a certificate of period of absence from duty issued by the Employees’ Compensation (Ordinary Assessment) Board. Section 10(2) of the Ordinance provides that a period of absence from duty certified to be necessary by a medical practitioner or the Ordinary Assessment Board shall be deemed to be a period of temporary total incapacity irrespective of the outcome of the injury. 

12. Kwok’s evidence and the documents that he has submitted show that he suffered an abrasion to his left knee as a result of the motorcycle accident. According to the report by one Dr. Chow of Queen Elizabeth Hospital, Kwok was admitted to the hospital at 1606 hours on 21 February 2004 and examination revealed an abrasion to his left knee with broken skin which measured 4cm x 8cm in area. There was no fracture to his left knee although emergency debridement was needed. There was also a slight abrasion to Kwok’s left elbow. Debridement was performed on 21 February, following which Kwok had to receive dressing every day until his discharge on 24 February. He received occupational therapy from 2 June to 30 June.

13. From 28 May 2005 (when Kwok lodged the present application) until the hearing, Kwan neither asked Kwok to be examined by a medical practitioner named by him, nor challenged the medical reports or documents submitted by Kwok.

14. Having considered the medical documents and sick leave documents submitted by Kwok, I see no reason for not accepting a report prepared by an independent Government doctor on Kwok’s injuries or the certification by the Assessment Board of Kwok’s periods of absence from duty as 21 February to 16 April 2004, 13 May to 14 May 2004, and 19 May to 28 July 2004. I therefore accept these periods as Kwok’s periods of temporary total incapacity for the purpose of calculating the compensation payable to Kwok under sections 9 and 10.

Is Kwan not liable to pay any compensation by reason of Kwok’s failure to submit himself for examination by a medical practitioner named by Kwan as required by section 16(4)?

15. Section 16(1) of the Ordinance provides that:

Where an employee has given notice of an accident he shall, if the employer, before the expiry of 7 days from the time at which notice has been given, offers to have him examined free of charge by a medical practitioner named by the employer, undergo such examination, and any employee who is in receipt of a periodical payment under section 10 shall, if so required by the employer, undergo such examination from time to time.

16. Section 16(2) provides that:

The employee shall, when required, attend upon the medical practitioner concerned at the time and place notified to the employee by the employer or that medical practitioner, provided such time and place is reasonable.

17. Section 16(4) provides that:

If the employee fails to undergo a medical examination as required under this section, his right to compensation shall be suspended until such examination has taken place; and if such failure extends over a period of 15 days from the date when the employee was required to undergo the examination under subsection (2) or (3), no compensation shall be payable, unless the Court is satisfied that there was reasonable cause for such failure.

18. Kwan argues that by 12 March 2004 he had required Kwok to attend upon a medical practitioner named by him for a re-examination of the injuries, with the charges to be paid by Kwan, but Kwok never underwent the examination as requested. Kwan submits that Kwok’s right to compensation should be suspended pursuant to section 16(4) and Kwan is therefore not liable to pay compensation.

19. On a literal reading, section 16(4) is wide enough to exonerate an employer from liability to pay any compensation to an employee who fails to undergo an examination by a medical practitioner specified by the employer in accordance with section 16(1) if the failure extends over 15 days. “Compensation” is defined in section 3 of the Ordinance to include compensation payable under section 6, 7, 8, 9 or 10 of the Ordinance.

20. Neither party hereto has drawn my attention to any authority on the meaning of section 16(4) and its effect on the court’s determination at trial of an employees’ compensation claim. The only relevant case I can locate is the decision of His Honour Judge Carlson on 2 January 2001 in Yu Yau-choi v. Ming Sang (HK) Engineering Ltd. DCEC 833/2000. In that case the respondent (employer) applied for an order requiring the applicant (employee) to submit himself before trial to a medical examination by a medical practitioner designated by the employer. The employee opposed the application, arguing that an employer did not have “carte blanche” in deciding when the employee should be medically examined. The learned judge accepted the applicant’s submission and held that, looking at section 16 as a whole, the right of an employer to require an employee to submit himself to a medical examination under section 16(1) arose only if the employer had made periodical payments to the employee.

21. The object of the Employees’ Compensation Ordinance has been explained and discussed by the courts in a number of decided cases. Mention should be made of the Court of Final Appeal case of LKK Trans Ltd v. Wong Hoi Chung FACV 14/2005, in which Bokhary PJ pointed out that the obvious object of the Ordinance is “speedily and with considerable certainty to provide urgently needed no-fault and compulsorily-insured compensation to injured employees or the families they leave behind”. The courts have repeatedly emphasized that the employees’ compensation scheme is a no-fault scheme which aims at expeditiously providing financial relief to employees incapacitated by work injury, to enable them to claim against their employers for compensation commensurate with the extent of the incapacity.

22. Employees’ compensation is payable both for death and for loss of earning capacity, whether such loss be temporary or permanent and total or partial. In some cases, it may not be possible to ascertain, within a short period of time, the extent or degree of any permanent incapacity resulting from an injury. Medical treatment or surgery may avoid or substantially reduce such incapacity. It may also take months for the employee’s condition to stabilize. In such a case, section 10 of the Ordinance comes into play so that the employee is deemed to be suffering from temporary incapacity during that period and entitled to periodical payments under section 10(1), being four-fifths of the difference between the monthly earnings which the employee was earning at the time of the accident and the monthly earnings which he is earning or capable of earning during the period of temporary incapacity after the accident. These periodical payments are payable on the same days as wages would have been payable to the employee.

23. There are various provisions in the Ordinance which fortify and facilitate the arrangement of making periodical payments to an injured employee. Section 10(2) provides that a period of absence from duty certified to be necessary by a medical practitioner (or ultimately, the Ordinary Assessment Board) shall be deemed to be a period of temporary total incapacity irrespective of the outcome of the injury. Under section 10(10), an employer who fails without reasonable excuse to make periodical payments to the employee or the court within 7 days after the date on which such compensation falls due commits an offence.

24. To alleviate any unfairness that the above scheme may cause to the employer, section 16(1) of the Ordinance allows the employer to require the employee to undergo an examination by a medical practitioner named by the employer from time to time, and section 16(4) provides that, if the employer fails to undergo such examination, his right to compensation to be suspended until such examination has taken place. Under section 20, the employer is not entitled (otherwise than in pursuance of a court order) to end periodical payments except where the employee dies, or where he resumes work and his earnings are not less than the earnings which he was obtaining before the accident. Nor is an employer entitled to diminish periodical payments except where the employee in receipt of periodical payments in respect of total incapacity has actually returned to work, or where the earnings of an employee in receipt of periodical payments in respect of partial incapacity have actually been increased.

25. Any periodical payments may be reviewed by the court under section 19, based on a change in the condition of the employee and provided that the application for review is supported by a certificate of a medical practitioner. Therefore, where an employer disputes the injuries sustained by the employee or the effect of the accident on the employee’s earning capacity, he may rely on section 16 and require the employee to be examined by a medical practitioner named by the employer. In conjunction therewith, the employer may, with the support of appropriate medical evidence, apply to the court pursuant to section 19 for a review of the periodical payments payable under section 10, and may end or diminish the periodical payments.

26. Section 16(4), the text of which is quoted in paragraph 17 above, imposes a sanction upon an employee who fails to undergo a medical examination by a medical practitioner named by the employer. Having regard to, and for the purpose of giving effect to, the object of the Ordinance and the rationale behind the arrangement of providing periodical payments to employees in respect of temporary incapacity resulting from work injury, the court should not interpret the sanction under section 16(4) in such a way as to deprive an employee of his right to claim any compensation in respect of his work injury. I do not accept that the legislative intent in enacting section 16(4) is to impose such a draconian sanction.

27. Section 16(4) can be contrasted with section 16(7) of the Ordinance. Under section 16(6), when an employee is not attended by a medical practitioner, he shall if required by the employer submit himself for treatment by a medical practitioner without expense to the employee. If the employee fails to submit himself for treatment by a medical practitioner when required by the employer, or having submitted himself for such treatment disregards the instructions of the medical practitioner, the sanction specified under section 16(7) is engaged. Under section 16(7), if it is proved that the employee’s failure to submit himself for treatment, or his disregard of the instructions of the medical practitioner, was unreasonable in the circumstances of the case and that the injury has been aggravated by such failure or disregard, then the employee’s injury and earning capacity will be assessed as if he had submitted himself for treatment, which means that the compensation payable to him will be reduced. It is clear from the judgment in Lau Kwok-leung v. Evergo Electric Manufacturing Co. Ltd [1989] HKDCLR 40 that section 16(6) can be invoked only if the employer can prove, firstly, that when he requested the employee to submit himself for treatment by a medical practitioner, the employee was not receiving treatment by another medical practitioner; secondly, that the employee’s failure to submit himself for treatment was unreasonable in the circumstances; and thirdly, that the employee’s injury has been aggravated by such failure. The sanction takes the form of a reduction of compensation, in the sense that the employee’s injury and incapacity will be assessed as if he had submitted himself for treatment, on the basis and assumption that the treatment would mitigate the injury or reduce the degree of incapacity. Lau Kwok-leung involved an application, made prior to trial, for a stay of proceedings, and the learned judge made the following observations in his judgment:

… I do not think proceeding with a claim after a failure to submit for treatment pursuant to a requirement by the employer can be regarded as an abuse of the process of the court. And I do not think the employee should be stopped from pursuing his claim for employees’ compensation simply because he has refused or failed to submit for treatment (even if such refusal or failure was unreasonable and his condition had aggravated as a result). For if it were otherwise, it would be tantamount to forcing him to receive treatment or disbarring him from getting any compensation at all until he has received treatment. I do not think the section can be that drastic.

28. In the present case, Kwan could have applied for a stay of proceedings before the matter came to trial, but he did not do so. He elected to proceed with the trial and then argued that no application by Kwok for any compensation should be entertained because he had failed to submit himself for examination.

29. In the case of Kong Lap Hung v. Chan Chiu [1991] 2 HKC 470, Her Honour District Judge V Bokhary (as she then was), adopting an approach similar to that in Lau Kwok-leung, held that curtailment of an employee’s entitlement to compensation by reason of his unreasonable refusal to undergo surgery did not arise unless such refusal was in the face of the instructions of the employer’s medical practitioner to whom the employee was obliged to submit himself for treatment and such refusal was proved to have aggravated the injury.

30. The language used in section 16(4) is plainly different from that used in section 16(7). The former expressly provides that where the employee fails to submit himself for the examination sought by the employer, “his right to compensation shall be suspended until such examination has taken place” (and section 16(8) goes on to provide that where a right to compensation is suspended, no compensation shall be payable in respect of the period of suspension). Section 16(4) also provides that where the employee’s failure to submit himself to examination extends to a period of 15 days, “no compensation shall be payable” unless the court is satisfied that there was reasonable cause for such failure. Notwithstanding the difference in the language being used, I am not convinced that it constitutes a good reason for distinguishing an employee who fails to submit himself for an examination specified by the employer from an employee who does not receive any medical treatment or who disregards the instructions of a medical practitioner, and imposing more severe sanctions against the former.

31. Given that the objective of the Ordinance is to expeditiously provide financial relief to employees incapacitated by work injury regardless of any fault on the part of the employer, and in the light of the scheme under the Ordinance for making periodical payments, I hold on the facts of the present case that, as Kwan did not on or before 28 February 2004 (i.e. within 7 days from 21 February 2004 on which notice of the accident was given by Kwok) offer to have Kwok examined free of charge by a medical practitioner named by Kwan, Kwan’s residual right to require Kwok to undergo a medical examination would arise only if Kwok was being paid periodical payments under section 10 of the Ordinance.

32. According to Kwok, save for the sum of $1,930 that he received on 12 March 2004, which represented (on Kwan’s evidence) Kwok’s medical expenses of $400, his salary for February 2004 and payments for his sick leave period for February 2004, Kwan had made no other payment to him. Furthermore, on the evidence, Kwan had deducted a sum of $260 (as purported repayment of an alleged loan from Kwok to Kwan) from Kwok’s wages for February and payment for his 9-day sick leave in February 2004. As the Ordinance does not allow an employer to reduce periodical payments as specified under the Ordinance, Kwok does not accept that Kwan had made the periodical payment to which he is entitled under section 10 for the month of February 2004. It is not under dispute that no payments were made for Kwok’s sick leave period from March to 28 July 2004.

33. On the facts, therefore, I accept Kwok’s submission that as he was not being paid periodical payments, Kwan did not have the right to require him to submit himself for a medical examination under section 16(1) of the Ordinance.

34. Even if I am wrong and Kwan did have the right to require Kwok to be examined by a medical practitioner under section 16(1), I cannot find any evidence that Kwan had at any time notified Kwok to attend a medical practitioner named by Kwan at a notified time and place.

35. As for the arrangement of a medical examination, the only contemporaneous evidence that Kwan relied on was a letter he claimed to have issued to Kwok on 20 March 2004. In that letter, Kwan required Kwok to “arrange a time (within 7 days) to notify the employer … to attend upon the medical practitioner named by the employer for re-examination of [Kwok’s] injury (with the charge to be paid by employer).” In his witness statement, Kwan also claimed that he informed Kwok on 12 March 2004 that he would “arrangea free-of-charge medical examination for Kwok”. However, under cross-examination, Kwan was unable to point out when he had named a medical practitioner to conduct an examination on Kwok and which medical practitioner had been named. Nor was Kwan able to provide any evidence to show that he had made any arrangement for Kwok to be examined free of charge by any named medical practitioner at any appointed time and place, or had notified Kwok to attend upon a medical practitioner named by him at the time or place arranged by him. Under cross-examination, Kwan was only able to say that there was a female medical practitioner on the second floor adjacent to his company, and he was unable to state her name, the arrangement he had made for the medical examination or the time he had scheduled for the examination.

36. One Miss Law, who was also Kwan’s employee, also gave a witness statement, but she only stated that on 12 March Kwan required Kwok to “arrange a reply to make an appointment for attending upon a medical practitioner named by the employer for a medical re-examination”. She did not say that she or Kwan had subsequently arranged for Kwok to or notified him to attend upon a named medical practitioner at any specific time and place. At trial, Law was only able to testify that she assumed that Kwan himself had arranged for a particular medical practitioner to conduct the medical examination he required on Kwok because she herself had not made any arrangement for Kwan. On 12 March she did not hear Kwan asking Kwok to attend upon any named medical practitioner at any particular time for a medical examination.

37. On the basis of the available factual evidence, I find that Kwan had not required Kwok to attend upon a named medical practitioner named by Kwan at the time and place notified to him by Kwan or by that medical practitioner as required by section 16(2). As Kwan had not notified Kwok to attend upon a medical practitioner named by him at any specific time and place, Kwok had not failed to undergo the medical examination within the meaning of section 16(2), and hence his right to compensation was at no time suspended under section 16(4). This being the case, given that I have accepted after trial the medical report as well as the assessment made by the Assessment Board, Kwan is in no position to refuse to pay compensation to Kwok for the partial incapacity caused by the accident.

The amount of employees’ compensation payable by Kwan

38. At the time of the injury, Kwok was aged 27 and earned a monthly wage of $7,000. He was injured on his 4^th day of work, and I accept that his earnings should be calculated on the basis of $7,000 per month. The Employees’ Compensation (Ordinary Assessment) Board assessed Kwok’s permanent incapacity at 0.5%, and neither party has appealed against the assessment.

39. Applying the method of calculation specified under section 9, the compensation payable to Kwok under that section is $7,000 x 96 x 0.5% = $3,360.

40. I accept the periods mentioned in paragraph 14 above as Kwok’s periods of temporary total incapacity. Accordingly, the compensation payable to Kwok under section 10 is $7,000 x 129/30 x 4/5 = $24,080.

41. Regarding compensation under section 10A, I accept that Kwok has incurred medical expenses of $1,170 and award compensation in this sum.

Conclusion

42. I order that the following compensation be paid to Kwok:

Compensation for permanent partial incapacity under section 9	$3,360
Compensation for temporary incapacity under section 10	$24,080
Medical expenses under section 10A	$1,170
Total	$28,610
Less (amount already paid):	$1,891
	$26,719

43. I hereby order that Kwan shall pay to Kwok compensation of $26,719 together with interest thereon, at half of the judgment rate from the date of the accident (i.e. 21 February 2004) to the date of judgment, and thereafter at the judgment rate until payment.

44. I also make an order nisi that Kwan shall pay Kwok’s costs of the present action, to be taxed if not agreed, and that Kwok’s own costs are to be taxed in accordance with the Legal Aid Regulations. This order nisi shall become absolute after 14 days from today.