LAU CHUNG HON v. HONG KONG HUNG WAI WOODEN BOARD COMPANY

DCEC 319/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 319 OF 2012

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JUDGMENT

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INTRODUCTION

1. This is an application by the applicant under sections 9, 10 and 10A of the Employees' Compensation Ordinance, Cap 282 (the "Ordinance”)for compensation for injury caused to him by an accident on 1 May 2010 when he was working in the respondent's office at Lot Number 34, Ecopark, District 38, Lung Mun Road, Lung Kwu Tan, Tuen Mun, New Territories, Hong Kong (the "Respondent’s Office"). It is the applicant's case that the accident occurred arising out of and in the course of his employment with the respondent.

2. The applicant also appeals against the assessment of Form 7 dated 22 May 2012.

3. In the Answer, the respondent denied that it was the applicant's employer at the time of the accident. It alleged that the applicant was employed by one "劉五炎" ("Lau"), an engineer from the PRC, as a technician on 28 April 2010 and his employment was terminated on 30 April 2010 (i.e. one day before the accident). Furthermore, the respondent also did not admit the occurrence of the accident.

THE APPLICANT’S CASE

4. It is the applicant's case that in response to a recruitment notice (the “Recruitment Advertisement”) posted on the recruitment website of the Labour Department on or about 26 April 2010, the applicant contacted a Mr Cheung (later known to be “張太和”) ("Cheung”) on his mobile telephone to apply for the post of an electrician.

5. On 26 April 2010 at around 11 am, the applicant called Cheung on his mobile telephone and an interview was arranged at around 2 pm on the same day at the Respondent's Office.

6. At around 2 pm, the applicant attended the Respondent's Office and was interviewed by Cheung who handed his name card to the applicant. The applicant was requested to fill out an application form accordingly.

7. After the interview, Cheung confirmed that the respondent would employ the applicant. It was agreed that the applicant's employment would commence on 28 April 2010 (i.e. two days later) and his monthly wages would be $12,000. The applicant also informed Cheung that he needed to take leave on 29 April 2010 because of a prior engagement and Cheung agreed. It was agreed that for 28 and 30 April 2010, the applicant would be paid a daily wage of $500. Thereafter, the applicant would be paid a monthly wage as aforesaid.

8. On 28 April 2010, the applicant reported duty at the Respondent's Office. The applicant informed Cheung that he needed to take leave on 29 May 2010. After discussion, it was agreed that the applicant would work on 1 May 2010 (which was a public holiday) to swap with 29 May 2010.

9. On 1 May 2010 at about 11 am, the applicant was instructed to install fluorescent tubes in a container at the Respondent's Office (the "Container"). He stood on an empty wooden box provided by the respondent to carry out the installation work. In the course of his work, the applicant lost his balance and fell onto the ground. As a result, the applicant sustained multiple injuries to his left chest, left flank and back.

THE RESPONDENT’S CASE

10. It is the respondent's case that the applicant was not an employee of the respondent at the time of the accident.

11. At all material times, the respondent was in the business of recycling scrapped wood, in cooperation with a PRC company known as Zhangzhou Hong Wei Woods Industry Group Co Ltd ("Hong Wei PRC").

12. Prior to July 2010, the respondent had not actually started its recycling business. Rather, it was engaged in preparatory work for the setting up of the Respondent's Office.

13. Hong Wei PRC arranged 3 technicians, namely, "鍾志燁" ("CW Chung"), "鍾飛鳳" ("FF Chung") and "于貴生" ("Yu") to come to Hong Kong to assist the respondent in setting up the recycling business.

14. Further, by an agreement dated 7 April 2010 made between Hong Wei PRC and Lau (the "Installation Agreement"), Lau was engaged to install the electrical system at the Respondent's Office for the sum of RMB 70,000. Under clause 6 of the Installation Agreement, Lau was responsible for employing all temporary staff, including the payment of their wages, compensation, welfare and living expenses.

15. It is the respondent's case that the applicant was employed by Lau as an electrician on 28 April 2010 and the applicant's employment was terminated by Lau on 30 April 2010.

16. Cheung made a Witness Statement dated 22 October 2012 in support of the respondent’s case. Unfortunately, Cheung was unable to testify at trial. I was told by Mr William Li, counsel for the respondent, that Cheung was seriously ill, suffering from liver cancer. His Witness Statement was admitted into evidence as a hearsay statement pursuant to section 47 of the Evidence Ordinance, Cap 8. Mr Damian Wong, counsel for the applicant, did not object to the admission of the evidence, whilst reserving his right to address the court on its weight.

17. Aside from the Witness Statement of Cheung, CW Chung and FF Chung were called by the respondent as witnesses to testify at trial.

THE ISSUES

18. From the foregoing, the issues that need to be decided are: --

(1) Whether the applicant was the respondent's employee  on  1 May 2010;

(2) If the answer to (1) is in the affirmative, whether the applicant suffered an accident as alleged on 1 May 2010; and

(3) If the answer to (2) is also in the affirmative, what is the compensation payable under sections 9, 10 and 10A of the Ordinance.

WHETHER APPLICANT WAS THE RESPONDENT’S EMPLOYEE

Identity of the Employer

19. The applicant's case in this regard has been set out in paragraphs 4 to 8 above. Aside from that, the applicant also gave the following evidence: --

(1) On 28 April 2010, the applicant reported duty at the Respondent's Office. Cheung then introduced the applicant to Lau and the other workers from the PRC (by telling the applicant their surnames). According to the applicant, Cheung indicated to the applicant that he would need to help Lau if he had spare time; and

(2) Cheung never told him that Cheung was helping Lau to recruit an electrical consultant, and all the terms and arrangement in respect of his employment were negotiated with and confirmed by Cheung.

20. I agree with Mr Damian Wong that the applicant's evidence has a ring of truth to it. He gave evidence in a straightforward manner. His oral evidence is consistent with documentary evidence and he was generally unshaken under cross-examination. In particular, his case in this regard is consistent with and supported by the Recruitment Advertisement posted on the recruitment website of the Labour Department, and the detailed call list produced by the respondent (which shows that Cheung received a call at around 11:59 am lasting for about 1 minute). It is significant to note that the applicant had indicated that the call took place at around 11 am in the Reply dated 17 April 2012 and the undated Declaration (disclosed in the applicant's List of Documents dated 28 May 2012), long before the respondent disclosed the detailed call list in June 2013.

21. As far as the respondent is concerned, its main witness Cheung was unable to attend the trial because of illness. His Witness Statement touched on many important issues but the applicant was not able to test his evidence through cross-examination. Given the importance of the issues involved, I find it impossible to attach any weight to Cheung’s untested allegation in his Witness Statement. I bear in mind, in particular, that the Witness Statement was not made contemporaneously with the occurrence of the events stated therein. Further, the Witness Statement was obviously made for the particular purpose of these proceedings.

22. In any event, Cheung’s Witness Statement does not sit comfortably with other documentary evidence. For example, Cheung said that the respondent had not commenced operation in April or May 2010 and therefore it did not have the need to hire any staff. However, according to the Business Registration Record of the respondent, the date of commencement of business was 1 October 1999. There is no explanation on this apparent discrepancy.

23. Another example is that Cheung stated that the respondent did not have the need to hire any staff yet at the same time, he did not deny that the respondent had posted the Recruitment Advertisement on around 23 April 2010 with a view to recruiting an electrical technician on a long-term basis. There is no explanation in his Witness Statement why the respondent had done so when it did not have the need to hire any staff. I have no hesitation in accepting that the applicant approached the respondent for a job interview in response to the Recruitment Advertisement and the irresistible inference to be drawn is that the respondent was the employer.

24. Cheung also said at paragraph 7 of his Witness Statement that Lau had asked him to find an electrical consultant to work for 2 days only. This piece of evidence is inconsistent with the evidence given by CW Chung and FF Chung, who both said that the applicant's employment was terminated because of his high level of disability. If the employment were meant to last only for 2 days, Lau would not have needed to terminate it on 30 April 2010 which was the last day of the applicant's employment in any event.

25. The respondent also relied on theInstallation Agreement referred to above to support its case that it was Lau who employed the applicant. However, neither Lau nor any representative of Hong Wei PRC was called as witness to testify at the trial. There is simply no evidence on the circumstances in which the Installation Agreement was made. Furthermore, the Installation Agreement is not necessarily inconsistent with the respondent being the employer of the applicant, with Lau bearing the expenses for employing the applicant.

26. For the reasons stated above, I have no difficulty in concluding, on a balance of probabilities, that the respondent was the applicant’s employer.

Alleged termination of employment on 30 April 2010

27. It is the respondent's case that the applicant's employment had been terminated on 30 April 2010.

28. On this issue, I agree with Mr Damian Wong that the respondent's evidence is both confusing and inconsistent.

29. Cheung stated in paragraph 9 of his Witness Statement that Lau terminated the applicant's employment because the applicant had been absent without approval (“矌工") on 29 April 2010.

30. Lau said nothing about unauthorised absence from work in his Certificate ("証明書") dated 10 July 2010 at page 217 of the Trial Bundle. Besides, as mentioned above, if the original intention was to employ the applicant for 2 days only, Lau would not need to specifically ask the applicant not to come back after having worked for two days. Furthermore, if the applicant's employment was terminated on 30 April 2010, it was only reasonable for Lau to have paid the applicant his salary for 2 days’ work before the applicant left the respondent's site. There is no explanation as to why this was not done.

31. As far as FF Chung is concerned, he purported to give a very detailed account of the events leading to the termination of the applicant's employment during cross-examination. According to him, he noticed in the morning of 30 April 2010 that the applicant was suffering from a high degree of disability (i.e. walking with a limp) and believed that the applicant was not suitable to work at the Respondent's Office. He therefore informed Lau of his observation during lunch. At around 5 to 6 pm on that day, Lau told the applicant in his presence that the applicant would not need to come back again.

32. However, when FF Chung was asked why his oral evidence was different from the content of his Certificate ("証明書") dated 10 July 2010 at page 216 of the Trial Bundle, in which it was stated that Lau had informed the applicant during lunch that he did not need to come back again, FF Chung completely retracted his oral evidence by saying that his memory was wrong since the events had occurred so many years ago and insisted that the Certificate represented the true account.

33. I agree with Mr Damian Wong that his explanation is wholly unconvincing. It is understandable that a witness's memory may fade with time but this is not a case where a witness fails to recall the details. On the contrary, FF Chung was giving much more details than he could possibly remember. He gave the distinct impression that he was simply making up evidence to bolster up the respondent's case, without at the time noticing that his evidence was inconsistent with the content of the Certificate which he was asked to sign a few years ago.

34. For the reasons stated above, I would reject the respondent's case in this regard on a balance of probabilities.

Swapping of working days

35. It is the applicant’s evidence that he informed Cheung that he needed to take leave on 29 May 2010 because he had made arrangements to attend a field trip on that day. After discussion, it was agreed that the applicant would work on 1 May 2010 (which was a public holiday) to swap with 29 May 2010 (which was a Saturday), and that was the reason why he attended the Respondent's Office on 1 May 2010.

36. The respondent's case is that that date was a public holiday and no one was required to work at the Respondent's Office on that day.

37. The applicant's evidence about the field trip on 29 May 2010 is supported by documents which came into existence even before the accident (see: pages 87 to 89 of the Trial Bundle). According to the Recruitment Advertisement, the applicant needed to work 6 days a week. Since he was new to the job, it was reasonable to ask for a swap of working days, instead of an additional leave on 29 May 2010.

38. In fact, one would asked rhetorically: why would the applicant go to the Respondent's Office on 1 May 2010 if he was not required to work on that day? I have no hesitation in accepting the applicant’s evidence in this regard on a balance of probabilities.

39. It is instructive to note that all 4 workers from the PRC, in fact, happened to be present at the Respondent’s Office on 1 May 2010, a day on which, according to the respondent, they were not required to work.

40. The evidence of CW Chung and FF Chung is that they were living in Fairview Park, Yuen Long at the material time but they did not go home on 30 April 2010 because they finished work late at around 7 pm and they chose to stay overnight at the Respondent's Office as it took 2 hours to travel to Fairview Park.

41. The explanation might sound sensible if the following day was a working day. However, the following day (i.e. 1 May 2010) was a public holiday on which, according to the respondent, they did not need to work. Therefore, it seems rather strange that all the workers chose to sleep in a container at the Respondent's Office, rather than travelling back to their home in Fairview Park.

42. Having considered all the evidence, I find that it is more likely than not that all the workers, including the applicant, were required to work on 1 May 2010.

THE ACCIDENT

43. It is the applicant's evidence that on 1 May 2010 at about 11 am, he was instructed by Lau to install fluorescent tubes in a container at the Respondent's Office. He stood on an empty wooden box provided by the respondent to carry out the installation work. Whilst he was positioning a handheld electric drill onto the wall, the wooden box rolled backwards. The applicant lost his balance and his left chest hits against the corner of the wooden box.

44. None of the witnesses called by the respondent saw the occurrence of the accident. Instead, the respondent's counsel simply challenged the applicant’s account and submitted that “He could hardly testify regarding the detail and the flow of the whole accident. He could not describe the physical motion when hitting the wooden box with his chest and explained how he could injure his chest while he was falling backward from the top of the wooden box to the ground" (see: paragraph 20 of the respondent's Closing Submissions).

45. I agree with Mr Damian Wong that the respondent's argument is unmeritorious. The applicant was able to give a fairly precise description of the accident. One needs to bear in mind that the accident happened in a split-second when the applicant was totally unprepared for it. It would be unreasonable to expect him to give a "frame-by-frame" account of the accident as if he were watching a movie played in slow motion.

46. Furthermore, at paragraph 39.1 of the Joint Report prepared by Dr Lau Chi Yuen (“Dr Lau") and Dr Peter Tio ("Dr Tio"), the experts agreed that the fractured ribs as well as the back and kidney contusion was "causally related" to the alleged injury on 1 May 2010. Further still, there is also no obvious pre-existing condition that is attributable to the applicant's present condition.

47. It is clear from the Joint Report that the injuries suffered by the applicant was compatible with the mechanism of the accident described by him and this further supports the applicant's evidence.

CONCLUSION ON LIABILITY

48. For the reasons stated above, I find that the applicant was an employee of the respondent at the material time of the accident and the injuries sustained by the applicant during the accident arose out of and in the course of the employment with the respondent.

ASSESSMENT OF QUANTUM

The Injury and Treatment

49. After the accident, the applicant attended the Department of Accident & Emergency of the Tuen Mun Hospital at about 11:50 am. The chief complaint was left side chest and left flank pain. Medical examination revealed tenderness at left lower chest and left flank. Chest radiograph did not show fracture. Besides, ultrasonography did not show internal bleeding. He was admitted to surgical unit for further management.

50. He was admitted to the Department of Surgery at around 4 pm. Physical examination on admission revealed tenderness over the left lateral chest wall and upper back. Blood test was unremarkable. Chest x-ray showed no rib fracture or pneumoiliorax. X-ray thoracolumbar spine showed no spine fracture. Orthopaedic surgeons were consulted for the upper back pain. Their opinion was contusion and conservative treatment was advised. His pain improved after conservative treatment and he was transferred to Pok Oi Hospital for rehabilitation on 5 May 2010. He still complained of left flank pain afterwards, so CT abdomen was arranged to rule out intra-abdominal pathology. Since his pain improved, he was discharged from Pok Oi Hospital on 14 May 2010. CT abdomen was done on 14 June 2010 and showed fracture left 10^th and 11^th ribs as well as a small subcapsular collection at the left kidney, likely due to previous subcapsular haematoma secondary to the injury. The applicant was seen for 3 times at the out-patient clinic after discharge. His pain improved after conservative treatment (including physiotherapy and oral analgesic) and his case was closed at the last follow-up on 9 August 2010.

51. From 2 June to 5 July 2010, the applicant received 10 sessions of physiotherapy treatment. After the treatment, the applicant reported an overall improvement of 80%. The pain in left lower chest and left side of back was NPRS 3-4/10. The walking tolerance (unaided) was 15-20 minutes and sitting tolerance more than 30 minutes. Objective Assessment showed mild local tender on left chest wall and left side of back. Active Range of Motion of trunk and left shoulder was restricted by pain.

52. The applicant also received 15 sessions of occupational therapy from 6 July to 30 August 2010. Final assessment result showed satisfactory tolerance to general upper limb activities, climbing ladder, light pushing tasks. He could perform left arm repetitive lifting of 11 pounds and left reaching arm activity, having mild left trunk pain complaints.

53. The applicant was assessed by the Employees' Compensation (Ordinary Assessment) Board (the "Board”)on 8 May 2012 (i.e. about 2 years after the accident). The Board assessed the applicant's loss of earning capacity caused by the injury at 1% and the period of absence from duty necessary as a result of the injury was from 1 May 2010 to 31 August 2010 (i.e. exactly 4 months) (See: From 7 dated 22 May 2012).

Experts’ Opinion

54. The applicant was jointly examined by Dr Lau (instructed by the applicant) and Dr Tio (instructed by the respondent) on 7 November 2012 (i.e. about 2 1/2 years after the accident).

55. The applicant complained of left chest pain and pain at upper back. The pain was aggravated on change of weather, carrying weight of more than 10 pounds, lifting up of body when climbing and during sexual behaviour.

56. After the examination, the experts held a discussion and made, inter alia, the following comments: --

(1) Diagnosis: (i) fracture left 10th to 11th ribs; and (ii) back and left kidney contusion injury with subcapsular haematoma;

(2) The examination revealed some residual tenderness at his left chest wall. There is mild tenderness at left para-lumbar spinal muscle;

(3) The applicant had reached the Maximal Medical Improvement (MMI) and no further treatment was required;

(4) Dr Lau expected that the applicant would suffer from some residual chest wall pain. Dr Tio was of the opinion that the fractures had invariably healed with no complication. Even if there was residual pain, it would subside within 2 to 3 years' time;

(5) Dr Lau opined that the whole person impairment was 4% whereas Dr Tio said it was 0.5%;

(6) Dr Lau opined that the loss of earning capacity was 4% whereas Dr Tio said it was 0.5%;

(7) Dr Lau opined that the applicant was able to resume duty as a maintenance worker but with lowered working efficiency. His chest pain was aggravated by carrying weight and climbing ladder. He needed co-worker to assist his heavy work, which posed slight disadvantage to him in the labour market;

(8) Dr Tio opined that the applicant should be able to resume his original duty with a full capacity as evident from the fact that he had resumed duty as a manual worker in late 2010. The residual pain should be minimal and should subside completely in 2 to 3 years' time after the alleged injury. He did not have any significant disadvantage in the labour market; and

(9) The sick leave granted was reasonable.

The applicant's Monthly Income

57. Based on the Recruitment Advertisement, it is the applicant's case that his monthly salary was $12,000 at the time of the accident.

58. No submission was made by the respondent to challenge this figure. In the circumstances, I would adopt the figure of $12,000 as the monthly earnings of the applicant at the time of the accident.

Loss of Earning Capacity

59. I would prefer the evidence of Dr Lau to that of Dr Tio. I agree with Mr Damian Wong that, in fact, Dr Tio’s opinion is not entirely consistent among itself: --

(1) If the residual pain should subside completely within 2 to 3 years after the injury and the joint examination took place around 2 1/2 years after the accident, why did Dr Tio say that the applicant had reached MMI when the applicant still experienced residual pain?

(2) If the applicant had reached MMI at the time of the joint examination and was ready for assessment, on what basis could Dr Tio say that the residual pain would subside within 2 to 3 years time?

(3) Whilst it is a fact that the applicant had resumed working in August 2010, he also complained at the joint examination that he was suffering from residual pain as stated in paragraph 55 above. Dr Tio did not challenge the applicant's complaint. In the circumstances, how could Dr Tio say that the applicant should be able to resume his original duty with a "full capacity”?

60. Taking into account all the medical evidence as a whole, I would allow the applicant's appeal on the assessment on the loss of earning capacity under Form 7. I would adopt 4% as the percentage of the loss of earning capacity suffered by the applicant as a result of the injuries he sustained in the accident.

Compensation under section 9

61. The applicant was born on 19 August 1959 and was 50 years old on the date of the accident.

62. The compensation for the applicant's permanent partial incapacity pursuant to section 9 of the Ordinance is therefore $12,000 x 72 x 4% = $34,560.

Compensation under section 10

63. The respondent did not challenge the four-month sick leave period. Accordingly, the compensation for the applicant's temporary loss of earning capacity pursuant to section 10 of the Ordinance is $12,000 x 4 months x 4/5 = $38,400.

Compensation under section 10A

64. The amount of the medical expenses is not challenged by the respondent. In the circumstances, I would allow the applicant's claim for medical expenses in the sum of $4,020.

Summary on quantum

65. In summary, the total compensation awarded is as follows: --

(1)	Section 9 compensation	$34,560
(2)	Add: section 10 compensation	$38,400
(3)	Add: section 10A compensation	$4,020
	Total:	$76,980

66. Interest is allowed at half judgment rate on the above sum from the date of the accident (1 May 2010) until this judgment and thereafter at judgment rate until payment in full.

CONCLUSION

67. Compensation is assessed at the sum of $76,980. The respondent is to pay such sum together with interest as aforesaid.

68. I make a costs order nisi that the respondent do pay to be applicant the costs of this application (with certificate for counsel for the trial), such costs to be taxed if not agreed. The costs order nisi shall become absolute in the absence of application to vary within 14 days. The applicant's own costs be taxed in accordance with the Legal Aid Regulations.

69. Lastly, I thank counsel on both sides for their helpful assistance in this matter.