AFTAB v. WAN WAI LEUNG t/a KWAN WONG INTERNATIONAL TRANSPORTATION CO AND ANOTHER

DCEC780/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 780 OF 2002

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J U D G M E N T

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1.  The Applicant applies for compensation under sections 9, 10 and 10A of the Employees Compensation Ordinance, Cap. 282, Laws of Hong Kong. 

2.  The Applicant sustained an injury arising out of and in the course of employment on 9 September 2000.  The Applicant was a `casual labourer recruited by the 1st Respondent at Sham Shui Po on the morning of 9 September 2000.  He was told by the 1st Respondent’s employee, Ah Ming, that he would be engaged on a casual basis and he would get $400 per day, plus $40 meal allowance.  On that day, he was told if he did the work well there would be two days’ work for him.

3.  He was taken in Ah Ming’s yellow van with three other workers and he was told to unload and transfer wooden boards from a 20 feet container to a factory warehouse on the 2nd floor of a building.  The work was under the supervision and instruction of Ah Ming.

4.  It was not disputed that the warehouse belonged to the 2nd Respondent, and the wooden boards also belonged to the 2nd Respondent who had ordered these boards from overseas.  The 2nd Respondent had engaged the services of the 1st Respondent to take delivery from the container terminal the container of wooden boards to the 2nd Respondent’s warehouse.  The 1st Respondent would be responsible to open the container and remove the wooden boards and transfer them into the 2nd Respondent’s warehouse.  The Applicant was one of the labourers engaged to unload the wooden boards from the container into  the warehouse of the 2nd Respondent.

5.  In the process of unloading the wooden boards from the container, the Applicant was inside the container when 10 to 11 pieces of the wooden boards collapsed.  The Applicant tried to escape but found a number of the wooden boards had fallen on his left middle finger crushing his left middle finger.  The applicant was immediately sent to Kwong Wah Hospital, where he was admitted for two days.  He received an operation on his left middle finger.  Thereafter, he received follow-up treatments and physiotherapy treatments.

6.  The 1st Respondent was joined and he was served at his business registration address.  However, service was not successful in spite of the service on both Mr Wan’s two business addresses, namely, Kwan Wong International Transportation Company and Hop Hing Transportation Company.  Mr Wan was served also on the two residential addresses that appear on the business registration of the two aforesaid businesses.  Such services were unsuccessful.

7.  The Applicant applied for substitute service and it was granted by the court.  Substituted service by advertising in a newspaper was duly effected.  However, the 1st Respondent made no appearance and was absent at the hearing.  The 2nd Respondent was represented by Mr Lo, a director of the company.

8.  It is the 2nd Respondent’s defence that:

(1)	the Applicant was not the 2nd Respondent’s employee;
(2)	the 1st Respondent was contracted to transfer and unload the wooden boards from the container to the 2nd Respondent’s warehouse;
(3)	the 1st Respondent was not engaged on a long-term basis and merely on a job-by-job basis after the 1st Respondent gave a quotation which was accepted by the 2nd Respondent for the particular job.

Relationship between 1st Respondent and Applicant and Relationship between the 1st and 2nd Respondents

9.  The applicant was a casual labourer.  He was employed by Ah Ming, who was an employee of the 1st Respondent, to unload the wooden boards from the container into the 2nd respondent’s warehouse.  According to the evidence of Madam Lam, wife of Mr Lo, who was in charge of the operation at the 2nd Respondent’s office, from time to time, when goods ordered by the 2nd Respondent arrived in a container shipped from overseas, she would call up a transportation company for the container to be picked up from the container terminal and to have it delivered to the 2nd Respondent’s warehouse.  The goods would be unloaded from the container and stored in the 2nd Respondent’s warehouse.

10.  The 1st Respondent was one of the transportation companies that the 2nd Respondent used, on this occasion, the 1st Respondent accepted the delivery order and agreed to perform the services.  Madam Lam denied that the 2nd Respondent was the main contractor and the 1st Respondent a subcontractor.  Madam Lam claimed that the 2nd Respondent and the 1st Respondent were equals, that the 2nd Respondent had engaged the 1st Respondent to perform the services of transport and delivery of the wooden boards and that was all.

11.  So far as the relationship between the Applicant and the 1st Respondent is concerned, the question of whether a casual labourer was working as an independent contractor or an employee under the Employee’s Compensation Ordinance had been decided in a number of  previous cases.  In the case of Market Investigations Limited v Minister of Social Security [1969] 2 QB 173,Lord Cooke referred to a fundamental test that had been adopted and accepted by the Privy Council in the case of Lee Ting Sang v Chung Chi Keung & Anor [1990] 1 HKLR 764 at page 766 G to page 767 B:

“The fundamental test to be applied is this.  Is the person who has engaged himself to perform these services performing them as a person in business on his own account?  If the answer to that question is yes then the contract is a contract for services.  If the answer is no, then the contract is a contract of service.  No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases.  The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor, and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.”

12.  It is the evidence of the Applicant that he was engaged to work for Ah Ming, who was an employee of the 1st Respondent, and Ah Ming took him and three other workers in a yellow van driven by Ah Ming to the container, and from the container the applicant moved the wooden boards up to the 2nd Respondent’s warehouse.  It was in this process that the Applicant sustained the injury.

13.  According to the criteria set out in the authorities, the Applicant worked under the instructions of Ah Ming to supervise the work all the way.  The Applicant was not an artisan type of skilled labourer.  He was a labourer - a coolie.  Though the work may be casual in nature, he was hired by the day or two days, the Applicant had no control over the work or the hours of the work.  He worked under the instructions and supervision of Ah Ming.  Based on the criteria set out in the authorities, I am satisfied he was employed by the 1st Respondent as defined in section 2 of the Employee’s Compensation Ordinance, Cap. 282.  Therefore, I find the 1st Respondent liable under section 5 of the Employee’s Compensation Ordinance.

The relationship between the 1st Respondent and the 2nd Respondent,

14.  Mr Li, solicitor for the Applicant submitted that the 2nd Respondent was the principal contractor under section 24 of the Employee’s Compensation Ordinance, and therefore the 2nd Respondent is liable for injuries suffered by the employees employed by the subcontractor.  Section 24(1) stated:

“Where any person (in this section referred to as ‘the principal contractor’) in the course of or for the purposes of his trade or business contracts with a subcontractor for the execution by or under the subcontractor, the principal contractor shall be liable to pay to any employee employed by that subcontractor, or by any other subcontractor in the execution of the work, any compensation under this ordinance which the principal contractor would have been liable to pay if that employee had been immediately employed by him, and where compensation is claimed from, or proceedings are taken against, the principal contractor, then in the application of this Ordinance references to ‘the principal contractor’ shall be substituted for references to ‘the employer’, except that the amount of any compensation calculated by reference to earnings shall be calculated by references to the earnings of the employee under the employer by whom he is immediately employed.”

Subsection 2 says this:

“Where the principal contractor is liable to pay compensation under this section he shall be entitled to be indemnified by any person who would have been liable to pay compensation to an employee independently of this section.”

And 3:

“An employee employed by a subcontractor may issue a written request for the subcontractor to supply to the employee the name and address of the principal contractor, etc.”

15.  Mr Li referred to Sir Derek Cons’s judgment in the case of Wong Leung Tak and Anor v Hip Hing Construction Company Limited [1991] 2 HKLR 345.  At page 368 B to C, he held:

“Work can be undertaken without the need for contractual liability as, e.g., in Mulrooney v Todd.  In the present instance the contract with the Hongkong & Shanghai Hotels Limited merely provided the setting in which the contractor took a particular piece of work upon himself - one of the meanings of ‘undertake’ given in the Shorter Oxford English Dictionary - namely, the fetching of property which it had earlier purchased.  Provided that particular piece of work was ‘in the course of and for the purposes of (the contractor’s) trade or business’, which it clearly was and was so conceded, liability would attach.”

16.  The words to note in Sir Derek Cons’s judgment is “the work undertaken in the course of and for the purposes of trade or business”.  Although the work referred to in the Wong Leung Tak case was at the construction site of the old Repulse Bay Hotel, at the time the plaintiff in that case sustained injuries to his back when the crane at the site fell on him while he was delivering steel to the site.

17.  The scenario in the present case is slightly different.  The 1st Respondent was performing services for the 2nd Respondent by delivering the building materials to the 2nd Respondent’s warehouse.  These building materials would in due course be sold by the 2nd Respondent, for the 2nd Respondent is in the business of trading in building materials.  Under the interpretation of section 24 of the Employee’s Compensation Ordinance and the interpretation of Sir Derek Cons in Wong Leung Tak’s case, the 1st Respondent was doing the work in the course of and for the purposes of the trade or business of the 2nd Respondent, i.e. the 2nd Respondent’s trade or business.  Applying the ratio in Sir Derek Cons’s judgment, and by analogy, the 2nd Respondent must be liable under section 24 of the Employee’s Compensation Ordinance.

18.  Of course, the 2nd Respondent can in turn pursue against the 1st Respondent under section 24(2) or section 25, as the case may be, for indemnity, that would be a decision for the 2nd Respondent to consider.  In any event, the 1st Respondent is found liable under section 5 and it is up to the applicant whether the Applicant would execute against both the 1st and 2nd Respondent, or the 1st Respondent alone, or the 2nd Respondent alone.

Quantum

19.  It is the Applicant’s evidence that he is paid $400 a day by the 1st Respondent and his average monthly income was $6,500.  His disability due to the injury was assessed by the Medical Assessment Board at 3.5%.   Therefore, under Section 9, for his permanent disability ($6,500 x 96 x 3.5%)  $21,840.

20. Under Section 10, under sick leave pay, he was given two months and three days sick leave by the doctors, $6,500 x 64/30 x  4/5 =  $11,093.30. 

21.  Under Section 10A, “Medical Expenses”, the total comes to $2,163.

22. The compensations are:

Under Section 9 Permanent Disability	$21,840.00
Under Section 10 Sick Leave Pay	$11,093.30
Under Section 10A Medical Expenses	$2,163.00
Less “prepayment”	$500.00
Total	$34,596.30
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23. I would allow interest of the aforesaid $34,596.30 from the date of application to the date of judgment at the rate of 2 per cent per annum, and judgment interest from the date of judgment to the date of full payment at judgment rate. 

24. Costs to Applicant to be taxed if not agreed.  Costs of and arising from the application for adjournment on 11 November 2004 to  be borne by the Applicant, i.e. 2nd Respondent’s costs caused by the adjournment and wasting of time caused by the adjournment to be borne by the Applicant.  Applicant’s own costs to be taxed in accordance with Legal Aid Regulations.