YEUNG NGAI v. YAN-KWONG INDUSTRIAL DEVELOPMENT LTD.

DCEC 833/98

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 833 OF 1998

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JUDGMENT

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1. The Applicant brings the present application against the Respondent to claim employees' compensation for the injuries suffered by him as a result of an industrial accident on 16th December 1997.

2. At the outset of the trial, the parties agree on the following matters:

(i) the subject accident arose out of and in the course of employment with the Respondent;

(ii) the loss of earning capacity suffered by the Applicant as a result of the subject accident is 32%;

(iii) the Applicant is entitled to 107 days of sick leave for the purpose of assessing the compensation of temporary incapacity under section 10 of the Employees' Compensation Ordinance ("the Ordinance"); and

(iv) the amount of medical expenses that can be claimed by the Applicant under section 10A of the Ordinance is $1,645.

3. In such circumstances, liability is not disputed and the only remaining issue for this court to decide is the amount of earnings made by the Applicant at the time of the accident for the purpose of assessing the quantum of employees' compensation.

Evidence adduced in trial

(i) The Applicant's evidence

4. The Applicant himself testified in trial. He was aged 53 at the time of the accident, and he left the Mainland and came to Hong Kong in 1962. During the period of 3 years prior to the accident, the Applicant had been working as a "long-term casual worker" earning an average income of $13,000 to $14,000 a month. However, he was unemployed in the period of 3 months immediately prior to the accident.

5. According to the Applicant, a supervisor of the Respondent, Chan Kwok Hung ("the said Mr. Chan"), approached him on the day of the accident and invited him to work for the Respondent to unload some goods from a container at the Respondent's godown at 1C Hung Shui Bridge, Tin Ha Road, Tin Sum Estate ("the Site"). This was the second time he worked for the Respondent. The usual rate for this kind of work was $500 per container and so it was not necessary for them to discuss the remuneration prior to the accident. Shortly after he had commenced his work, the Applicant injured his right thumb while he was unloading some audio equipment from a container, and as a result his thumb had to be amputated.

6. The Applicant had to attend regular out-patient treatment after the accident. The history of his post-accident employment can be summarised as follows:

(i) security guard from mid-May to end of July 1998 earning about $6,000 a month;

(ii) watchman for 8 to 10 days in December 1998 earning $200 a day;

(iii) cleaning worker from 15th March to early June 1999 earning about $5,300 a month (inclusive of transportation allowance of $300).

The Applicant has ceased to work after June 1999 in order to take care of his son who was granted permission to stay in Hong Kong.

(ii) The Respondent's evidence

7. The Respondent has called 2 witnesses to testify on its behalf. The first witness, Mr. Hui Cho-fu, is a director of the Respondent. According to him, the Applicant was only employed as a security guard to replace the said Mr. Chan to work at the Site. The monthly salary was $4,500, and Mr. Hui had expressly told the Applicant that the latter's duties included guarding the stock and informing the sub-contractor where to load or unload the goods. He had never instructed the Applicant to assist in the unloading operation as this job was specifically delegated to the sub-contractor and his workers. The Respondent paid $3,500 to the sub-contractor for unloading the goods of each container.

8. The Respondent alleged contractor, Mr. Fong Fai-yiu, also testified in trial. He was self-employed and worked as an independent contractor to assist his customers with the loading and unloading of goods from containers. On the day of the accident, he was asked by the Respondent to unload some goods from a container at the Site, and he had engaged 4 to 5 workers for such work. He did not know why the Applicant was unloading goods from the container, but he had warned the Applicant not to touch the goods shortly before the accident.

9. During cross-examination, Mr. Fong testified that he had 5 employees working for him each earning about $7,000 to $8,000 a month.

The calculation of earnings

10. The method of calculating the earnings for the purpose of assessing employees' compensation has been set out in section 11 of the Ordinance. Section 11(1) provides:

"Subject to this section, for the purposes of this Ordinance the monthly earnings of an employee at the time of the accident shall be the earnings -

(a) for the month immediately preceding the date of the

accident; or

(b) computed in such manner as is best calculated to give the rates per month at which the employee was remunerated during the previous 12 months if he has been so long employed by the same employer, but, if not, then for any lesser period during which he has been employed by the same employer,

whichever calculation is more favourable to the employee."

11. Section 11(2) also provides:

"Where by reason of the shortness of the time during which an employee has been in the employment of his employer or of the casual nature of the employment, or of the terms of employment, it is impracticable to compute the rate of remuneration of such employee at the date of the accident, regard may be had to the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of similar earning capacity in the same grade employed at the same work by the same employer, or, if there is no person so employed, by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district."

12. The accident occurred on the Applicant's first day of work with the Respondent. As he has not received any salary from the Respondent for the month immediately preceding the date of the accident, there is a dispute between the parties as to the proper method of calculating the Applicant's earnings.

13. Mr. Cheung on behalf of the Applicant submits that the court, by virtue of the formula set out in section 11(1)(b), is entitled to take into account the income actually earned by the Applicant in the period of 12 months prior to the accident in calculating his earnings. In such circumstances, the court does not even have to consider the formula set out in section 11(2). On the other hand, Mr. Yue, on behalf of the Respondent, submits that the formula set out in section 11(1)(b) is not applicable in the present case, as such method of calculation can only be used if the employee concerned worked for the "same employer" in the period of 12 months, or any lesser period of time, prior to the accident.

14. According to the express wordings used in section 11(1)(b), I am of the view that Mr. Yue's submission must be correct. Section 11(1)(b) expressly states that the court is only entitled to take into account the past average earnings of an employee "if he has been so long employed by the same employer". In the present case, the same employer means the Respondent. Save that the Applicant had worked for the Respondent once in unloading goods from container, the Applicant had not been employed by the Respondent in any period of time prior to the accident. Hence the condition set out in section 11(1)(b) is not satisfied in the present case, and the court is not entitled to use the past average income of the Applicant earned by him when he worked for other employers in calculating his earnings.

15. In such circumstances, the court must proceed to adopt the method of calculating earnings as set out in section 11(2). In this regard, I have to make a determination on the following issues:

(i) the capacity in which the Applicant was employed at the time of the accident; and

(ii) the average income of such kind of worker at the time of the accident.

16. On the first issue, the Applicant maintains that he was employed as a worker engaging in unloading goods from containers at the time of the accident. On the other hand, it has all along been the Respondent's case that the Applicant was only employed as a security guard when he injured himself.

17. After hearing the evidence and observing the witnesses who testified in the witness box, I would prefer to accept the evidence of the Applicant over that of the Respondent. The reasons for me in reaching such conclusion can be stated as follows. Firstly, it is common ground that the Applicant injured himself while he was unloading some goods from a container. If the Applicant was only employed to work as a security guard and his duties, according to the Respondent, were limited to guarding the stock and informing the sub-contractor where to load or unload the goods, it is difficult to understand why the Applicant, despite the express instructions and warning given to him, went beyond his duties and engaged himself in unloading the goods from the container.

18. Secondly, it has all along been the Respondent's case that the Applicant, like the said Mr. Chan, was employed to work as a security guard at the Site. However in the salary receipt produced by the Respondent, the remuneration paid to the said Mr. Chan was described as "dismantling expenses". Although it is not known who has written these descriptions in the receipts, it certainly support the Applicant's evidence that he was not employed to work as a security guard at the Site. Hence on the balance of probabilities, I do find that the Applicant was employed as a worker engaging in unloading goods from containers at the time of the accident.

19. In calculating the Applicant's earning, I then have to determine the average income of such kind of worker. The Respondent's suggested figure of $4,500 is certainly not applicable, as it only reflects the monthly income of a security guard and not a worker engaging in unloading goods from containers. In such circumstances, the best evidence I can obtain is from the oral testimony of the Respondent's sub-contractor Mr. Fong. According to him, he has employed 5 workers engaging in such kind of work each earning a monthly income of $7,000 to $8,000 a month at the time of the accident. Mr. Yue for the Respondent submits that I should not adopt such figure as the Applicant, unlike the workers employed by Mr. Fong, was only engaged to work as a casual worker. However Mr. Fong stated in his witness statement that he did not have any person on his payroll, and he would only enlist the help of his workers when the need arose. Hence the 5 workers employed by him at the time of the accident, like the Applicant, must have been working on a casual basis. In such circumstances, I would adopt the median figure of $7,500 a month as the average earnings of such kind of worker at the time of the accident.

20. Based on the aforesaid findings, I can assess the quantum of the Applicant's claim as follows:

(i) compensation for permanent partial incapacity under section 9:

$7,500 x 72 months x 32% = $172,800

(ii) compensation for temporary incapacity under section 10:

$7,500 x 80% x 12 x	107	= $21,107
	365

(iii) medical expenses under section 10A: $1,645 (agreed figure)

Total: $195,552

21. I therefore assess the employees' compensation in the sum of $195,552. I also award interest on the said sum at half the existing judgment rate, 5.63%, from the date of the accident to the date hereof and thereafter at judgment rate. I also make an order nisi that: (i) the Applicant is entitled to the costs of this Application; (ii) there be certificate for counsel for the trial herein; and (iii) the Applicant's own costs to be taxed in accordance with legal aid regulations. The order nisi is to be made absolute after the expiration of 14 days from the date of the handing down of this judgment.