TSE WUT CHEUK BY HIS NEXT FRIEND KING CHUNG LAN v. PATENT DESIGN & ENGINEERING LTD

DCEC 1007/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 1007 OF 2015

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J U D G M E N T

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A.　BACKGROUND

1.  This is a trial on the assessment of compensation in respect of these proceedings for employees’ compensation pursuant to the Employees’ Compensation Ordinance (all references to statutory provisions in this judgment, unless expressly stated, are references to this Ordinance).  The applicant is a mentally incapacitated person, and he brings these proceedings by his next friend, King Chung Lan (“Mdm King”)

2.  Interlocutory judgment was entered against the respondent on 20 May 2016 upon its default of the serving of an answer within the time limit ordered by the court.

3.  Irrespective of the attendance in one directions hearing on 11 March 2016 by a director of the respondent, the respondent was absent from all the directions hearing and did not participate in these proceedings. The respondent was absent from trial.

4.  From the affirmation of service, “Affirmation of Wong Sui Ling” filed on behalf of the applicant on 8 May 2017, I am satisfied that service of a sealed copy of the order of trial made by this court dated 13 January 2017 as well as a true copy of the Notice of Trial dated 17 January 2017 was validly effected as both of these documents were endorsed with an acknowledgement of receipt signed by the respondent’s director, Mr Chan Heung Wing (transliteration), and affixed with a chop of the respondent.  In the circumstances, I proceeded with the trial in the absence of the respondent.

5.  At the trial, the applicant was represented by his legally-assigned counsel, Miss Seto who lodged before the trial a written opening submission and a supplemental submission both of which she also adopted as her closing submissions.

6.  Two witnesses, Mdm King (the next friend, who is the applicant’s ex-wife) and Mr Yu (the applicant’s co-worker at the time of the accident) testified at the trial.  They both adopted their witness statements as their evidence, which is straightforward and factual. I accept their evidence.

7.  For the purpose of his appeal against the review assessment set out in Form 9 (“Form 9”) by the Labour Department’s medical assessment board (“MAB”), the applicant was granted leave to adduce the evidence of the orthopaedic expert (Dr Tsoi) as well as the neurological expert (Dr Yu).  The applicant was examined by Dr Tsoi and Dr Yu respectively on 18 and 19 August 2016.  Dr Tsoi’s expert report dated 22 August 2016 (“Dr Tsoi’s Report”)[1] and Dr Yu’s expert report dated 29 August 2016 (“Dr Yu’s Report”)[2] were ordered by this court to be adduced as evidence without calling the experts.

B.　COMPENSATION CLAIMED

8.  From the accident that the applicant met in the course of his employment with the respondent on 28 August 2013, the applicant suffered traumatic brain injury after having fallen from a height of 3 meters.

9.  After the accident, the applicant was found to be a mentally incapacitated person (see para18(3) below), and claims compensation under s.7 (for permanent total incapacity), s.8 (for and in relation to an employee requiring attention), s.10 (for temporary incapacity) and s.10A (for payment of medical expenses).

10.  At the trial, the applicant, through his counsel, abandoned his claim for s.10A compensation, leaving therefore only a claim for compensation under ss.7, 8 and 10.

C.　SECTION 7 COMPENSATION

C.1　Whether the applicant suffers permanent total incapacity

11.  The applicant disagrees with the MAB’s assessment (in Form 9) that assessed his loss of earning capacity at 60 percent and his continuous sick leave from 28 August 2013 to 9 April 2015 and from 13 April 2015 to 8 January 2016, totalling 861 days.

12.  The applicant’s appeal against the MAB’s assessment of sick leave will be discussed in Section E: s.10 compensation.

13.  The applicant’s appeal in relation to MAB’s assessment of 60 percent loss of earning capacity is relevant to the s.7 compensation.  It is the applicant’s case that he has suffered, based on the undisputed expert medical evidence, permanent total incapacity and should have been assessed to have suffered 100 percent loss of earning capacity.

14.  Miss Seto, in her written opening, has summarized some salient findings contained in the reports of Dr Tsoi and Dr Yu. I will respectfully adopt them and extract the relevant parts as follows:

15.  In Dr Tsoi’s Report, Dr Tsoi found the applicant:

(1)  had impaired communication that resulted in the slurring of speech.  He also had difficulty in making a fist. The applicant’s general condition was poor.

(2)  was still “grossly disabled” 3 years after the accident as evidenced by his poor cognitive function and poor muscle in the coordination of limbs.

(3)  is totally dependent in his activities of daily living, and needs full time care in self-hygiene care, changing clothes and preparing food.

16.  Dr Tsoi further opined that:

(4)  the applicant has likely reached maximal medical improvement, and the overall prognosis is guarded and it is highly unlikely that he can resume any gainful employment due to his present neuromuscular disability.

17.  In Dr Yu’s Report, Dr Yu found the applicant:

(1)  suffers from neurocognitive and neurobehavioural impairments, dysarthria (i.e. a motor speech disorder characterised by slurred speech) and right hemiparesis (i.e. weakness of the entire right side of the body).  He is also at risk of developing post-traumatic epileptic seizures although he has not had seizures so far.

18.  Dr Yu further opined that:

(2)  the applicant’s neurological deficits are permanent and he is unable to resume his pre-accident employment or take up any gainful employment.  The loss of earning capacity is opined to be 100 percent.

(3)  the applicant is a mentally incapacitated person within the meaning of the Mental Health Ordinance[3].

19.  Relying on the findings and opinions of Dr Tsoi and Dr Yu, Miss Seto submitted that the applicant’s head injury is of such a severe nature that has rendered him wheelchair bound and urinary incontinent.  It is therefore submitted that the applicant is totally incapable of taking up any gainful employment. A 100 percent loss of earning capacity should substitute the MAB’s assessment of 60 percent loss of earning capacity.

20.  I accept the findings and opinions of Dr Tsoi and Dr Yu, and have no difficulty in coming to the conclusion that the applicant has suffered permanent total incapacity as a result of the accident. I agree with Miss Seto’s submission that the description of injuries set out in Form 9 that the applicant had “severe head injury resulting in wheelchair bound and urinary incontinence” is hardly adequate in reflecting the severity of the applicant’s overall condition.  The fact that he was found to have become a mentally incapacitated person is, in my view, an overwhelming piece of evidence that the applicant has effectively lost all earning capacity. The loss of earning capacity should be 100 per cent.

C.2　Amount

21.  The applicant was aged 60 at the time of the accident, and his s.7 compensation, pursuant to s.7(1)(c) shall be a lump sum equal to 48 months’ earnings or 48 times the corresponding amount – which is $23,580 at the time of the accident – specified in the Sixth Schedule, whichever is the less.  

22.  The applicant’s monthly earnings before the accident were asserted to be $31,200.  Hence, Miss Seto adopts the lower figure of $23,580 specified in the Sixth Schedule for the calculation of the s.7 compensation, which is calculated to be in the amount of $1,131,840(i.e.$23,580 x 48).

23.  According to Mr Yu’s evidence, a Mr Chan (who is believed to be the director) of the respondent employed Mr Yu himself, the applicant and a Mr Wong to do wood work with an agreed daily wage of $1,200. They commenced work for the respondent on 21 August 2013.   Between 21 and 28 August 2013 (the day of the accident), the applicant altogether worked a total number of 7 days, after having taken one rest day during this period. Mr Yu and Mr Wong worked for one more day in the total of 8 days in all after the applicant was injured and stopped working for the respondent. The respondent on 30 August 2013 transferred a sum of $27,600 to Mr Yu’s bank account for the payment of the applicant’s wages in the total sum of $8,400 (i.e. $1,200 x 7 days) and those of Mr Yu and Mr Wong each in the sum of $9,600 (i.e. $1,200 x 8 days).

24.  Reliance is also placed on a statement of Mr Chan, the director of the respondent, dated 30 August 2013, taken by the Labour Department to support the applicant’s asserted daily wage of $1,200.

25.  In my judgment, the applicant has adduced sufficient evidence to prove, on the balance of probabilities, that he earned a daily wage of $1,200 even without Mr Chan’s hearsay statement in corroboration. I find the applicant has produced cogent contemporaneous documentary evidence in the form of Mr Yu’s passbook records to corroborate the applicant’s asserted daily wages. By way of example, the payment by the respondent of the total wages of $27,600 that I referred to in para 23 above is corroborated by Mr Yu’s Bank of China account showing a ATM transfer deposit for the said amount on 30 August 2013[4]. In the circumstances, I find that the applicant’s daily wage was $1,200.

26.  Generally, when computing an employee’s monthly earnings, the court will, in the absence of any contrary evidence, use 26 days as the number of days of work per month[5].

27.  In the instant case, since the applicant had only worked for the respondent for less than a month when he met the accident, I should compute his pre-accident earnings with reference to s.11(1)(b)[6] by using 26 days as the number of days of work per month.  In this case, I find there is undisputed evidence of Mr Yu that during a short employment of 8 days with the respondent before the accident, the applicant worked for 7 days and took only 1 rest day on Sunday, making a total of 26 days a month. Given the cogent evidence, the applicant probably has no need to rely on the assumption that I refer to in the preceding paragraph.

28.  For these reasons, I find that the applicant has proved his asserted pre-accident monthly earnings of $31,200 (i.e. $1,200 x 26 days).

29.  Accordingly, I award the applicant $1,131,840 (i.e. $23,580 x 48) as compensation under s.7 as Miss Seto has calculated (see para 22 above).

D.　SECTION 8 COMPENSATION

30.  Section 8 compensation is for and in relation to attention provided by another person to an employee who has suffered permanent incapacity caused by the injury and is rendered “unable to perform the essential actions of life, without the attention of another person” (s.8(1)).

31.  The relevant principles and criteria for making a s.8 award are set out by HH Judge Cheung (as he then was) in Lau Ka Shui v Yiu Wing Construction Co Ltd & Anor [1991] 2 HKC 644 at 648E-G as follows:

“If, by reason of the permanent total incapacity of the applicant, special attention is required such as helping him with his urination or bowel movements or attending to his bed sores, then the costs for such help is recoverable under this section. By the wording of the section, such help must not be of an intermittent nature. Further, the allowance is not granted in respect of help in housework or other purely domestic purposes. It is, however, not necessary that the applicant should actually be receiving the attention and an award would be made even if the applicant is being looked after by a spouse or other relative. The only restriction is provided by s.8(3) which prohibits the payment of compensation during the period when the applicant is receiving free medical treatment as an inpatient in a hospital or otherwise.”

32.  The applicant’s condition can be best gleaned from the undisputed evidence of Mdm King (the applicant’s ex-wife who has been providing care and attention to the applicant), Dr Tsoi’s Report and the Dr Yu’s Report.  The totality of their evidence confirms, in my finding, that the applicant is:

(i) suffering from incontinence and is wheel-chair bound, and needs Mdm King’s constant care and attention in his daily activities (Mdm King’s witness statement at para 19).

(ii) “totally dependent in his activities of daily living. He needs full time care in self-hygiene care, changing clothes, preparing food” (Dr Tsoi’s Report at Section VIII).

(iii) “independent in personal hygiene and feeding when food is prepared. He holds the spoon with the left hand and is partially dependant in toileting, showering and dressing. He can walk about 10 feet on level ground with the aid of a frame and supervision. He cannot walk up and down stairs. He uses the wheelchair when he goes out. He needs to be accompanied because his sense of direction is poor” (Dr Yu’s Report at para 13).

33.  From this evidence, I find that the applicant has suffered a permanent total incapacity of a nature that renders him dependent on the assistance and special attention of Mdm King in most of his daily activities including personal hygiene (showering and toileting) and going out.  I am satisfied that a s.8 compensation should be granted.

34.  The amount of compensation is governed by s.8(1) and (2) as follows:

(a) Section 8(1):

“(a) such amount not exceeding the amount specified in the second column of the Sixth Schedule shown opposite section 8(1)(a) specified in the first column of that Schedule as the Court considers necessary to meet the cost of such attention; or

(b) an amount of the amount specified in the second column of the Sixth Schedule shown opposite section 8(1)(b) specified in the first column of that Schedule payable pursuant to an agreement entered into by the employer with the injured employee and approved by the Commissioner under this section.”

(b)  Section 8(2):

“Compensation under subsection (1)(a) shall be –

(a) a lump sum payment calculated with regard to the probable duration and cost of the attention; or

(b)(i) periodical payments, payable at such intervals as the Court may order, to cover periods not exceeding a total of 2 years after the date on which the employee becomes entitled to receive compensation under section 7; and

(ii) if on the expiry of the period of 2 years prescribed in the sub-paragraph (i) the Court considers that the employee is still in need of attention, such lump sum payment, as the Court may order, calculated with regard to the probable duration and cost of the attention.”

35.  Since there is no s.8(1)(b) agreement in the instant case, the amount of compensation to be awarded should be governed by s.8(1)(a), which requires a court to determine the amount that is considered “necessary to meet the cost of” attention.  Regardless of whether the compensation is to be by way of a lump sum or periodical payment (s.8(2)), the total amount of compensation is capped at $462,890 as specified in the Sixth Schedule applicable to the relevant date of the accident[7].

36.  Miss Seto, on behalf of the applicant, submits that s.8 compensation can be awarded to reflect the loss of wages incurred by Mdm King as representing the cost of attention provided to the applicant: Tsui Lup-shing v Hong Kong Security Ltd [1978] HKDCLR 11 at 13.

37.  There is undisputed evidence that Mdm King resigned[8] from her full-time work as a hotel room attendant two days before the applicant’s discharge from hospital on 21 February 2014 in order to provide the necessary care and attention to the applicant. Since then, Mdm King changed to work for the same hotel on a casual basis. As a result, Mdm King has suffered a loss of wages of at least, as evidenced by her passbook records, the tax returns of the relevant years and her employment contract dated 11 January 2016, $8,500 (i.e. $15,500 - $7,000) per month or $102,000 per year.  It is therefore submitted that the applicant should be awarded a lump sum of $462,890, representing the maximum amount under s. 8 at the time of the accident.

38.  In considering the amount of compensable payable under s.8, the court should have regard to the cost of the attention (which can be represented by a loss of wages of the care-giver: Tsui Lup-shing) as well as the probable duration.

39.  Based on the evidence of Mdm King and that of the medical experts of Dr Tsoi and Dr Yu, I find that the applicant was in need of care and attention since his discharge from hospital and Mdm King has suffered loss of wages for providing them to the applicant.  At the trial, Mdm King informed this court that she quit her part-time job with the hotel since March 2017 as she found it increasingly difficult to cope with her part-time job whilst devoting so much attention to the care of the applicant. Thus, as from April 2017, she has no income and has been living on her savings.

40.  From the supporting documents Mdm King adduced, I find that Mdm King has indeed suffered a loss of wages of around $100,000 per year.  Thus, up to the date of trial, Mdm King has already incurred a loss of wages of more than $300,000.

41.  Unfortunately, the applicant’s condition, according to the expert evidence, will unlikely improve, which means that the duration for the future need of care and attention will be life-long. The applicant is currently 64 years old.  According to Dr Yu’s Report (at para 29), Dr Yu is of the opinion that the applicant’s life expectancy will unlikely be reduced despite the severe head injury.  In the circumstances, it is likely that the applicant will need the attention of a care-giver who is presently Mdm King for a considerable number of years.  For these reasons, I am of the view that periodical payments provided in s.8(2)(b) is unsuitable and a lump sum should be awarded. Given the likely long duration of the needed care as well as the relatively high level of care required, I agree with  Miss Seto’s submission that the applicant ought to be awarded the statutory maximum compensation in a lump sum payment of $462,890: see Lau Ka Shui and Lai Wing Shun v Shun Shing Decoration Co Ltd and Anor ^[9]. I so award.

E.　SECTION 10 COMPENSATION

42.  In the Form 9, the MAB endorsed a total of 861 days of sick leave granted to the applicant (from 28 August 2013 to 9 April 2015 and from 13 April 2015 to 8 January 2016).

43.  The 861 days (i.e. 26.35 months) of sick leave the MAB endorsed in the Form 9 exceeds the 24 months’ capped by s.10(5) for the payment of periodical payments to an injured employee. The court however under s.10(5) has a discretion to extend periodical payments for a maximum of 12 months. 

44.  On behalf of the applicant, Miss Seto submitted that this court should exercise the discretion to extend periodical payments for a further 12 months.  In support of the applicant’s application for the extension are the further sick leave certificates totalling 193 days (from 21 March 2016 to 25 July 2016) the applicant was granted.

45.  Miss Seto further submitted that in the light of the opinions of both Dr Tsoi and Dr Yu, and the sick leave certificates granted by the applicant’s treating doctors, the latter of which give rise to a presumption of temporary disability under s.10(2)[10], the court ought to allow the applicant compensation for sick leave to 25 July 2016, which would be a total of 1,054 days (i.e. 861 days + 193 days).

46.  Given the severity of incapacity the applicant has suffered (see the summary of findings and opinions of Dr Tsoi and Dr Yu outlined in paras 15 to 18 above), I consider that it is justified in the instant case to exercise my discretion in favour of the granting of an extension of the payment of periodical payments for another 12 months.

47.  I therefore award $876,928 (i.e. $31,200 x 1,054 days/30 x 4/5) as compensation under s.10.

F.　ORDER

48.  I grant the following orders:

(1)  That judgment be entered against the respondent in favour of the applicant for the following sums:

Section 7 compensation	$1,131,840.00
Section 8 compensation	$462,890.00
Section 10 compensation	$876,928.00
Total:	$2,471,658.00

(2)  That there shall be interest on these sums at half judgment rate from 28 August 2013 to the date of judgment, and thereafter at judgment rate until full payment.

(3)  That the judgment sum shall be paid into court pending the appointment of the Committee of the applicant’s Estate under Part II of the Mental Health Ordinance, and the application by such Committee for directions for the control of money recovered by the applicant.

(4)  That there be a costs order nisi that the respondent do pay the applicant the costs of these proceedings, with certificate for counsel, to be taxed if not agreed.

(5)  The applicant’s own costs are to be taxed in accordance with the Legal Aid Regulations.

(6)  The costs order nisi will be made absolute 14 days from the date of the handing down of this judgment if no application is made by inter-partes summons to vary it within that 14 days’ period.

49.  Lastly, I thank counsel for her able assistance.