TSANG KWONG TONG v. TENNILLE DECORATION & DESIGN LTD AND OTHERS

DCEC 645/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 645 OF 2003

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J U D G M E N T

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1.  This is an application for employees’ compensation under sections 9, 10 and 10A of the Employee Compensation Ordinance (“the Ordinance”).

2.  On 14^th July, 2001, the Applicant was at work at Room 704, Eastern Harbour Centre, Quarry Bay, Hong Kong (“the premises”).  Whilst in the course of demolishing an iron frame at the premises, one of the iron frames suddenly collapsed and hit the Applicant’s wrist, and as a result the Applicant sustained the following injuries:-

(i)     left shoulder injury resulting in left shoulder pain;

(ii)    fracture of bilateral distal radius resulting in pain and stiffness of both wrists.

3.  He was admitted to the Department of Accident and Emergency of Pamela Youde Nethersole Eastern Hospital.  He was hospitalized from 14.7.2001 to 23.7.2001, and was granted sick leave from 14.7.2001 to 4.7.2002.

The Applicant’s evidence

4.  The first issue I have to decide is : who was the employer of the Applicant at the material time?  It is the Applicant’s evidence that prior to the accident, the Applicant had known the 3^rd Respondent for 20 years.  From time to time they would mutually introduced site work to each other.  Sometimes the 3^rd Respondent would sub-contract work as a sub-contractor.  Sometimes he would be employed by other contractors.  On 13^th July, 2001, after he had gone off work, the 3^rd Respondent rang him up, saying that his leg had been injured, and he required the Applicant to attend work for him.  In the next morning, he met the 3^rd Respondent at a restaurant in North Point.  At that time he saw that the leg of the 3^rd Respondent was swollen.  The 3^rd Respondent told him that the daily wage was $900.

5.  After his discharge from hospital on 23^rd July, 2001, he rang up the 3^rd Respondent for tea.  He gave the 3^rd Respondent sick leave certificates.  The 3^rd Respondent said that he would give them to Mr. Chow, the boss.

6.  When he was hospitalized on 14.7.2001, his wife told him that she had received $2,000 from someone (being 2 days’ wages plus her taxi fare) at the hospital but she did not know the payer.  In this regard, the 3^rd Respondent said that he saw that the said sum was paid by Mr. Chan of the 1^st Respondent (“Mr. Chan”) to the Applicant’s wife.  The 3^rd Respondent alleged that Mr. Chan went to the hospital with the ambulance together with him and the Applicant.  The 2^nd Respondent submitted that such allegation was contradicted by the Applicant’s own evidence that only the 3^rd Respondent went to the hospital with him.  If the $2,000 was given to the Applicant’s wife at the hospital, and if the 3^rd Respondent was the only person going to the hospital with the Applicant, the only inference to be drawn is that it was the 3^rd Respondent who gave her the sum of $2,000, despite the denial of the 3^rd Respondent.  There is no evidence in detail about the circumstances regarding the payment of $2,000 to her.  It is apparent that she went to the hospital by herself.  She must have reached the hospital some time after the ambulance had arrived at the hospital.  There is a time gap between the moment the Applicant was discharged from the ambulance to the time she received $2,000.  It is not known how long the time gap was.    The payment was made in the hospital.  There is no direct connection between the making of the payment and whether the 3^rd Respondent was the only person going to the hospital with the Applicant.  The 2^nd Respondent’s comment is only sustainable if within a very short moment after the Applicant’s discharge from the ambulance, she received $2,000.  It has to show that Mr. Chan did not go to the hospital by himself, and therefore could not have given $2,000 to her.  But there is no such evidence.  Accordingly the evidence of the 3^rd Respondent that she was given $2,000 by Mr. Chan remains uncontradicted by evidence, and the said comment cannot stand.

7.  Regarding the sum of $5,000 paid to the Applicant about one month after 14.7.2001, in his witness statement dated 20.9.2004, the Applicant said that when the 3^rd Respondent gave him $5,000, the 3^rd Respondent did not say who made the payment.  After that he looked for the 3^rd Respondent for payment, the 3^rd Respondent asked him to look for Mr. Chow (the boss) or Mr. Yau (a foreman of the 1^st Respondent), and to give directly to Mr. Chow the sick leave certificate(s) directly.  Then after he had looked for Mr. Chow for numerous occasions, about 3 months after 14.7.2001, Mr. Chow gave him a cheque in the sum of $24,000, and thereafter he was given per month $12,000, all payments made by Mr. Chow’s company by cheques.  From Mr. Chow he received a total of $144,000, particularized as follows:-

4.9.2001	$24,000   (cheque)
12.10.2001	$12,000   (cheque)
5.11.2001	$12,000   (cheque)
7.12.2001	$12,000   (cheque)
3.1.2002	$12,000   (cheque)
5.2.2002	$12,000   (cheque)
6.3.2002	$12,000   (cheque)
4.4.2002	$12,000   (cheque)
6.5.2002	$12,000   (cheque)
4.6.2002	$12,000   (cheque)
4.7.2002	$12,000   (cheque)
Total:	$144,000

8.  Before 14.7.2001, the Applicant did know anyone of the 1^st Respondent.  On the same day he was injured, and was granted sick leave thereafter.  It must be truthful that after the payment of $5,000, the 3^rd Respondent did ask him to look for Mr. Chow or Mr. Yau.  If he had not looked for Mr. Chow, how could he have been able to receive the subsequent 11 payments by cheques from the 1^st Respondent?  He must have also given to the 1^st Respondent on different occasions his sick leave certificates, in order to support the fact that he was on sick leave during the relevant period(s), for which he was entitled to payment.  Thus it must be the 3^rd Respondent who told him to present these sick leave certificates to the 1^st Respondent in order to get payment.  Prior to and throughout the entire period of payment by cheques for 10 months, namely from 4.9.2001 to 4.7.2002, the 1^st Respondent must have ascertained, at one stage or another, its relationship with the Applicant, in order to ensure that it was obliged to make the payments.  The payments must have been made by the 1^st Respondent in its position either as an employer of the Applicant, or as the principal contractor.  It would be inconceivable that if it was not obliged to make any payment to the Applicant, it would do so, in the way it did; particularly the payment on each occasion was not a small amount of money.

9.  The 2^nd Respondent submitted that both the Applicant and the 3^rd Respondent now seek to say that the sum of $5,000 was a loan, such new allegation is inconsistent with their own conduct at that time (and a complete absence of any repayment or such intention) and is totally contradicted by the Applicant’s own admission that the sum of $5,000 was considered as part of the periodical payment he received.  This is not a new allegation.  Under paragraph 41 of the statement of witness of the 3^rd Respondent dated 14.2.2005, the 3^rd Respondent did say that on 2^nd August, he did lend $5,000 to the Applicant by transferring the same to the bank account of the Applicant’s wife.  In Court, the Applicant said that the sum of $5,000 was a loan of employees’ compensation.  The 2^nd Respondent put to him that as he knew that an employer had the duty to pay employees’ compensation, why the Applicant still needed to borrow?  The Applicant explained that he had suffered minor injuries occasionally and the companies would advance money to him first.  When the insurance company made compensation, the same would be retained (by the employer companies).  That is the Applicant’s understanding of the term “loan” in light of the employees’ compensation.  It is not a simple “loan” situation.  There is not necessary in conflict with the Applicant’s perception of the nature of the sum, when he considered it as part of the periodical payment he received.

The evidence of the 3^rd Respondent

10.  In his witness statement the 3^rd Respondent said that on 6.7.2001, his friend (Chan Ho Shing) rang him up, saying that the company of his friend (Mr. Chow) had a job to do, namely, to dismantle an iron platform.  Chan asked him if he was interested in give a helping hand on the next day (a Saturday); the daily wage was $700.  On the next day he went to the site, and met a foreman surnamed Yau, whom he had seen for about 3 times.  At about 3 p.m. on the same day his right leg was injured, and therefore he was unable to finish his job.  Because he had to see a doctor, he left the site without notifying Mr. Chow.  After leaving the site he notified Mr. Chan that his leg had been twisted, and so he would be unable to finish his work, and he would complete the job on the following week.  Because he had not recovered from his leg injuries, he rang up Mr. Chan and told him his situation.  Mr. Chan instructed him to look for a worker to replace him.  In the past he had entrusted the Applicant to look for workers to do work.  So he rang up the Applicant, telling him that he had an injury in the past week, whilst dismantling an iron platform at Quarry Bay, but he had finishing job to do.  He asked the Applicant if there was a helping hand for doing one day’s job.  The Applicant said that there was no need to look for someone.  He was free, and he himself would come to work on the following day.  He asked the Applicant how much  pay per day, and the Applicant said it must be $900 per day.  He replied by saying that he had to ask the boss about this.  Then he rang up Mr. Chan, telling him the situation.  After hearing that, Mr. Chan rang off, and about 10 minutes later, Mr. Chan made a return call, saying that there was no problem.  Then he rang up the Applicant, saying that there was no problem, and made an appointment with the Applicant to have tea at North Point in the next morning.  After tea, he brought the Applicant to the site to work, because the Applicant did not know the people at the site.

11.  This part of the evidence differs somewhat from the evidence of the Applicant.  He did not refer to 2 telephone calls from the 3^rd Respondent.  In his witness statement he simply said that after work on 13^th July, the 3^rd Respondent rang him up, telling him that his leg was injured, and he required the Applicant to work in his place.  Therefore he went to work on the following day, and they made an appointment to have tea at a restaurant in North Point.  The 3^rd Respondent must have told him that his leg had been injured.  There is no reason for the Applicant or the 3^rd Respondent to lie about such a matter.  It must be true that because of the injured leg, the 3^rd Respondent had to find a replacement worker.  If the 3^rd Respondent were a sub-contractor on that site, it would be odd for him to have told the Applicant that his leg was injured.  There is no need for him to mention about his leg injury at all.  About the circumstances the 3^rd Respondent rang him up, he only gave a brief discount.  That accounts for the differences in the evidence.

12.  There is no direct evidence to contradict the evidence of the 3^rd Respondent regarding how he looked for the Applicant to work in his replace.  I accept his evidence.  I reject the 2^nd Respondent’s submission that he had a complete discretion regarding the amount of wages to be paid to the Applicant.  He did ask for the approval of Mr. Chan before agreeing to pay the Applicant $900 per day.

13.  The 2^nd Respondent submitted that in respect of the payment of $5,000 if the 1^st Respondent was all along the Applicant’s direct employer, the 3^rd Respondent could simply have approached the 1^st Respondent or arranged with the 1^st Respondent for making payment to the Applicant, and there was no obligation for the 3^rd Respondent to pay the Applicant anything.  But the same argument applies to the 3^rd Respondent with more force.  If the 3^rd Respondent was all along the Applicant’s direct employer, the 1^st Respondent could simply have approached the 3^rd Respondent or arranged with the 3^rd Respondent for making payment to the Applicant.  There was no obligation for the 1^st Respondent to pay the Applicant anything.  The 1^st Respondent paid the Applicant directly by way of cheques on 11 occasions throughout a period of 10 months, in the total sum of $144,000, a huge sum of money.  It is simply inconceivable that the 1^st Respondent would have made the payment without making sure that it was under an obligation to pay.  If it can be inferred simply on one occasion of paying the Applicant the sum of $5,000 that the 3^rd Respondent was the employer of the Applicant, then on the same logic, a much stronger inference could readily be drawn than the 1^st Respondent was the employer of the Applicant on the basis that a much bigger sum had been paid throughout a much longer period and on many more occasions.  It must be truthful that it was the 3^rd Respondent who asked the Applicant to look for Mr. Chow (the boss) for payment.  If he had regarded himself as the employer of the Applicant, why would he have done so!

14.  The 2^nd Respondent submitted that under paragraph 23 of the Applicant’s witness statement the Applicant said that the 3^rd Respondent told him that he had sub-contracted the work from the 1^st Respondent, and he told the Applicant the 3^rd Respondent’s company name and address.  Despite the attempt of the 3^rd Respondent and the Applicant to deny the 3^rd Respondent’s admission, the admission goes to explain why after this meeting the Applicant went to the 3^rd Respondent for further payment.  The statement made by the 3^rd Respondent is not conclusive evidence to show that he was a sub-contractor.  Paragraph 23 must be read together with paragraph 22 of the witness statement.  Under paragraph 22, the Applicant said that the 3^rd Respondent told him that he would pass the Applicant’s sick leave certificate to Mr. Chow (the boss).  This means that Mr. Chow was the employer.  That being so, the 3^rd Respondent could not be a sub-contractor.  He could only be an employee.  When he was replaced by the Applicant, the Applicant must also be an employee.  So it is simply unsafe to rely on Paragraph 23, without also considering paragraph 22.

15.  In paragraph 4.5 of the written submission of the 2^nd Respondent, it stated that the 3^rd Respondent stated in no unclear terms that he took care of the project (dismantling metal platform).  The work was being handled by several workers.  It shows that “the project” was subcontracted to him.  This is not necessarily true.  “To take care of a project” is a loose term.  It can hardly be interpreted to make the 3^rd Respondent a sub-contractor.

16.  On the balance of probabilities, I am satisfied that the 3^rd Respondent was the employee of the 1^st Respondent, and that the Applicant was recruited by him to do the work on 14.7.2001 as a replacement worker for him.

Quantum

17.  The Applicant was assessed by the Ordinary Assessment Board to have a 18% loss of earning capacity for:-

(a) left shoulder injury resulting in left shoulder pain; and

(b) fracture of bilateral distal radius resulting in pain and stiffness of both wrists.

18.  Form 6 was issued by the Ordinary Assessment Board under s.16A(5) of the Ordinance.  Section 16A(7) of the Ordinance provides that:-

          “A certificate purporting to be issued-

          …

(b)     under subsection (5),

…..shall be admitted in evidence without further proof on its production in any court and-

…

(ii) shall be evidence of the matter stated therein.”

19. On 14.7.2001, the Applicant was admitted into hospital.  He sustained tenderness over the left shoulder, left side chest wall, left forehead and left wrist with deformity and right wrist.  X-ray showed undisplaced fracture of the right distal radius.  There was no other joint or bony injury.  On 16.7.2001, he underwent an open reduction and internal fixation of the left distal radius fracture.  The right radius fracture was managed with Plaster-of-Paris cast.  He recovered uneventful.  The cast was later removed.  Thereafter, he also received physiotherapy treatment between 9.8.2001 and 4.7.2002 on 59 sessions at Alice Ho Miu Ling Nethersole Hospital, he was admitted into hospital for removal of the implants.  He then continued to physiotherapy until 4.7.2002.

20.  When he was examined by Dr. Lee Po Chin (“Dr. Lee”) on 25.11.2003, he still complained of the following:

(a) right wrist pain after exertion;

(b) the major complaint was pain in left shoulder during rest, at night and movement;

(c) some dull ache in left wrist after exertion; and

(d) weakness of left wrist

21. X-ray of the left wrist showed a fracture radius healed with deformity.  There were:-

(a) shortening of the radius of prominence of the ulna;

(b) fracture of the ulna styloid; and

(c) signs of post-traumatic arthristis affecting the left wrist joint.

22. Dr. Lee was the opinion that there were:-

(a) a deformity of the joint surface with irregularity of the joint line and collapse of the length of the radius in the left wrist;

(b) limitations in the radial deviation and pain in the right wrist; and

(c) definite painful arc syndrome on the left shoulder.

23.  These all pointed to the presence of ongoing supraspinatus tendinitis.  His condition was permanent and no further treatment was necessary.  Dr. Lee opined that the deformity in the joint line could lead to post-traumatic arthritis.  If pain and degenerative changes developed, a fusion of the left wrist would be required.  Dr. Lee assessed the Applicant to have a 12% impairment of the whole person and a 12% loss of earning capacity.  The Applicant might have difficulty to resume full duty of a metal worker, which required him to lift up very heavy weights.  However, he should be able to carry out the lighter duties of a metal worker and he had already done so.

24.  Dr. Lam Kwong Chin (“Dr Lam”) (the Respondent’s medical expert) agreed with Dr. Lee that the Applicant had painful arc syndrome and supraspinatus tendinities.  With the present shoulder motion, there was 3% impairment of the upper extremity, or 2% of the whole person.  For the left wrist, Dr. Lam assessed 4% impairment of the upper extremity, or 2% impairment of the whole person.  He recommended the Applicant to receive local injection of steroid for relief of the impingement at left shoulder.  He still opined that the Applicant should be able to continue the work as a metallic worker.  He accepted that the Applicant might have slight diminish in working efficiency and endurance due to the residual pain.  However, they were expected to improve with time.  But Dr. Lam did not give a reason for this opinion.  He assessed the Applicant to have a 5% loss of earning capacity.  He challenged the 18% as assessed by the Board as an over-estimate.  He recommended the Applicant to receive local injection of steroid for relief of the impingement at the left shoulder.  This reflects that the Applicant’s complaints of pain at the left shoulder are genuine.

25.  The 2^nd and the 3^rd Respondents challenge the 18% as assessed by the Board as stated in Form 9.  In Liu Ah Sai v Yiu Lian Dockyard Ltd [1996] 4 HKC, the Court of Appeal held that the Certificate (Form 9) is liable to cancellation if, it is proved that: -

“ (a) …

(b) the certificate was issued in ignorance of, or under a mistake as to, the true nature or the extent of the injury; or

(c)    … …”

If it is not, the court cannot interfere with the Commissioner’s award.

26. In Yip Fong Ming v Joint-Effort Engineering Co. [1989] 1 HKC 505, Judge Yeung (as he then was) emphasized that (at p.509D):-

“But physical condition is not the only factor affecting the earning capacity of an individual.

Other factors have to be taken into account.  The wages actually being earned at the time of the hearing can be a relevant factor but it cannot be the sole basis of the assessment….”

27. Then at p.510F, Judge Yeung stated that:-

“In considering suitable employment for the injured employee, the court should have regard for his personal background and circumstances, the likelihood of improvement or deterioration of his physical conditions, the prospect of improved skill or achieving further qualification, thus reducing the impact of physical condition of his earning capacity, etc..”

28. The Applicant is 56 years old now.  He spent over 30 years in the construction industry.  It is extremely difficulty, if not impossible, for him to acquire any new skill or qualification.  Hence, it is impractical to suggest that the Applicant can resume his pre-accident duties.  Whilst the Applicant can perform works of similar type, due to his symptoms and residual disabilities, his choice of work was greatly reduced.  He has suffered substantial loss of earnings.  Thus, apart from the medical evidence and opinion, the Court should also take into account the difference in remunerations between the Applicant’s pre-accident and post-accident jobs.

29. The 3^rd Respondent confirmed that the daily rate of $900 was not unusually high for the Applicant.  He was a very experienced metal worker.  Sometimes the daily rate could be $1,500 or more.  If the employment lasted for a longer period, the daily rate would be lower.  If it lasted for 1 or 2 days, the daily rate would be higher.  During the year prior to the accident, he earned around $20,000 to $25,000 per month.  In Form 6, it is stated that his earning is $19,500 per month.  Before the accident, the Applicant could discharge his duties as a decoration/metal worker.  The gas cylinders he used for the cut-welding work weighed over 100 catties.  The welding torch and the gas tubes weighed about 20 pounds.  After the accident, he could carry out lighter duties.  But he could no longer carry the gas cylinders which weighed over 100 catties.  He could not completely stretch his left arm, and he had pain in his left shoulder at night.  Sometimes he needed to take pain-killer for relief.  Occasionally he would swing his arms during walking so as to relieve the pain at the shoulder joint.  He seldom used his left hand to perform heavy duty as it would cause pain.  Because of the difficulty in carrying the gas cylinders or heavy metal structures, he was always dismissed, and his employments tended to he short.  He could only perform lighting metallic works, such as grinding work and plumbing work.  Such work did not involve carrying of heavy weights, he could only be employed for 8 to 10 days per month on the average.  His daily rate was dropped to $600 to $700 on the average.  His maximum monthly income was therefore $5600 to $7,000.  I accept his evidence.  His income decreased drastically.

30. There is a substantial decrease in the working efficiency due to the residual pain at the left shoulder.  I therefore conclude that the 18% loss of earning capacity by the Ordinary Assessment Board cannot be faulted.  This figure should not be set aside.

Section 9 - compensation

31. The Applicant was 52 years old at the time of the accident.  Section 7(1)(b) of the Ordinance applies.  As the Applicant does not appeal against the assessment in Form 6, his entitlement under s.9 is:-

HK$19,500 x 72 x 18% =	HK$252,720
	=========

Section 10 – compensation on sick leave

32. Under s.10(2), the medical certificates for sick leaves are presumed to be conclusive evidence of temporary incapacity.  The Board endorsed the sick leaves from 14.7.2001 to 4.7.2002.  Dr. Lam agreed that it was appropriate.  Hence, the Applicant’s entitlement under this head is:-

              HK$19,500/26 x 293 x 4/5 = HK$175,800

Section 10A – medical expenses

33. The Applicant claims for a total sum of HK$4,128 for:-

a.   HK$2,728 for hospital charges at Alice Ho Miu Ling Nethersole Hospital; and

b.   HK$1,400 for hospital charges at Eastern Hospital.

Advance/periodical payment

34. The Applicant shall give credit to the sum of $144,000 that he received from the 1^st Respondent.  The Applicant is entitled to receive the following amounts:-

Section 9	HK$252,720
Section 10	HK$175,800
Section 10A	HK$4,128
	----------------
Sub-total:	HK$432,648
LESS Advance/periodical payment	HK$144,000
	---------------
	HK$288,648
Total :	==========

35. I dismiss the Applicant’s claim against the 3^rd Respondent.

36. I order that judgment be entered against the 1^st Respondent in respect of the Applicant’s claim. The 1^st  Respondent do pay, within 14 days from today, the sum of $288,648, and interest thereon at half judgment rate from the date of the date of the accident (14.7.2001) to the date of judgment, and at judgment rate from 19.7.2001 to the date of satisfaction of the debt.

Costs

37. I make an order nisi, to be made absolute in 14 days’ time, that the 1^st and the 2^nd Respondents do pay costs of these proceedings to the Applicant, and the 2^nd Respondents to pay costs of these proceedings to the 3^rd Respondent.  The 3^rd Respondent’s own costs to the taxed in accordance with Legal Aid Regulations.  All costs to be taxed, if not agreed, with certificate for Counsel.