IP PANG SHEUNG v. WONG TSAI TRANSPORTATION LTD

DCEC 2170/2015

[2018] HKDC 951

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2170 OF 2015

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J U D G M E N T

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A.　INTRODUCTION

1.  In these proceedings, the legally-aided applicant instituted an employees’ compensation application against the respondent, Wong Tsai Transportation Limited (王仔運輸有限公司) pursuant to the Employees’ Compensation Ordinance (Cap.282) for the personal injury that he suffered in an accident (“Accident”) on 7 March 2014 arising out of and in the course of his alleged employment with the respondent. 

2.  The applicant was a welder. Before the applicant’s iron equipment (鐵器) firm, “駿業工程公司” (which is transliterated as “Chun Yip Iron Engineering Company”) (“Former Firm”), ceased business on 26 October 2013[1], the applicant was its sole-proprietor.   Hence, on the date of the Accident, the Former Firm was already closed. 

3.  The respondent is, at all material times, a transportation company. Its sole shareholder and director is a Mr Wong Chung Man (“Mr Wong”).

4.  In its answer in opposition to the application, the respondent denies that the applicant was its employee.   

5.  At the trial on liability and quantum, the applicant was the only witness. The respondent did not call any witnesses despite having filed and served a witness statement of Mr Wong before the hearing.  By the consent of the parties, I directed that his witness statement be excluded from the trial.

6.  The applicant was represented by his Legally-aided assigned counsel, Mr Steven Lau, and the respondent by its solicitor, Mr Kent Tam. 

7.  References to statutory provisions in this judgment, unless otherwise stated, are references to the Employees’ Compensation Ordinance.

B.　ISSUES

B.1　Liability

8.  At the trial, Mr Tam, on behalf of the respondent, admitted that the applicant had suffered a personal injury by Accident on the Accident date. Hence, the only issue on liability is whether the applicant was the respondent’s employee on the date of the Accident.

B.2　Quantum

9.  The applicant seeks compensation under ss.9 (for permanent partial incapacity), 10 (for temporary incapacity) and 10A (for medical expenses).  The only contention the respondent raises is the percentage loss of earning capacity for the calculation of s.9 compensation.

10.  Mr Lau asks for 12 percent while Mr Tam contends for 6 percent (see paras 103 and 104 below).

C.　THE APPLICANT’S EVIDENCE

11.  At trial, the applicant adopted the following statements in Chinese as evidence-in-chief:

(1)  His witness statements respectively dated 22 November 2016 and 22 December 2017 (respectively “WS (1)” and “SupWS”).

(2)  Three records of interviews (collectively “Records of Interviews”) respectively dated 24 July, 4 September and 8 October 2014 (respectively “1st, 2nd and 3rd Records”) taken by the officers of the Labour Department.

C.1　The alleged employment and the Accident

12.  It is the applicant’s evidence that he, together with his friend, 關曉晗 (“Kwan”), commenced employment with the respondent on 27 February 2014, doing welding, repairing and paint-spraying of the respondent’s waste skips (環保斗) at a site at Pak Shing Kok Road, Tseung Kwan O (“Accident Site”) in the circumstances referred to below.

13.  The applicant’s employment, according to the applicant, came about in this way. On or about 20 February 2014, a friend called “圖哥” (“Brother Tu”) telephoned and asked him whether he could introduce welders to repair waste skips for a “Wong Tsai” (王仔) (which the applicant later learnt to be the respondent) (see Section C.5 below).

14.  The applicant was able to find two acquaintances (“Two Workers”) originally from Fujian. Since the Two Workers did not speak much Cantonese, the applicant explained, the applicant therefore personally took them on 22 February 2014[2] to a site as Brother Tu instructed.  After the Two Workers were met by two persons-in-charge, namely, “世伯” (“Wong Senior”) (whom was later known to be Mr Wong’s father) and Jackal, and were then taken to fetch working tools for work, the applicant said that he left the said site.  

15.  After 5 days, the Two Workers told the applicant that they wanted to quit. As a result, the applicant said he telephoned Wong Senior to let him know of this. Wong Senior then asked the applicant to find replacement workers to continue with the work. The applicant said that since he had already been off work for 6 months after a back injury, and felt that he had sufficiently recovered, he decided to take the place of one of the Two Workers even though he had not told Wong Senior beforehand that he would be one of the replacement workers.

16.  Hence, on 27 February, the applicant together with Kwan started working for the respondent.

17.  The applicant met the Accident when he fell from a wooden ladder on which he was standing in the course of removing a piece of welded steel from the top of a waste skip. The applicant suffered a lumbar spine fracture as a result.    

C.2　Terms of the alleged employment

C.2.1　The telephone conversation on 20 February

18.  The applicant stated that in spite of the absence of a written contract between the applicant and the respondent, the following two terms of the employment could be implied from the oral agreement made between Brother Tu and himself during the telephone conversation on 20 February 2014.

19.  Firstly, the daily wage of $1,200. In his oral testimony, the applicant stated that he had at first told Brother Tu that the usual daily wage was $1,300. But Brother Tu said that the employer would only pay $1,200.  The applicant and the Two Workers accepted this rate.

20.  Secondly, the wage payment. Brother Tu asked the applicant to submit to him a written wage record for payment of wages, which would be made at the beginning of every month.

C.2.2　By inference and the usual trade practice

21.  The applicant stated that since there was no discussion at all about any changes to the agreement between Brother Tu and the applicant when Wong Senior asked the applicant to find replacement workers, the applicant firmly believed that both he and Kwan would be employed on the same terms as the Two Workers referred to in Section C.2.1 above.

22.  Like the Two Workers, he also followed the trade practice and worked from 9 a.m.to 6 p.m[3].

C.3　Wages Records and Payment

C.3.1　Wages for February 2014

23.  On 1 March 2014, the applicant, as instructed by Brother Tu, needed to make a record of wages for the month of February for the dates the Two Workers (22 to 26 February), himself and Kwan (27 to 28 February) had worked. Without much thinking, the applicant stated that he only randomly used a piece of leftover notepaper of the Former Firm that he found at home to make the wage record (“ “Invoice” ”) for February. The paper that he had used was in a pre-set tabular-format[4] bearing the name of the Former Firm as well as a pre-affixed chop of the Former Firm.

24.  On the top of the “Invoice”, the applicant wrote two Chinese characters “發票” (invoice), which he stated under cross-examination that he had come to realize was not appropriate. Instead, he said he should have used words such as “工數紙” (document of man days) or “人工” (wages) to describe the document.

25.  In the following itemized columns of the “Invoice”, the applicant recorded the following entries in each of the tabular rows:

(1)  Column for “地盆名稱” (“name of the site”) – 22 to 28 February (2014).

(2)  Column for “摘要” (“summary”) – work types: repair of waste skips, moving of containers and waste skips, demolition.

(3)  Column for “數量” (“quantity”): two man days (2工).

(4)  Column for “單價” (“quotation price”) – $1,200.

(5)  Column for “金額 HK$” (“amount in HK$”) – $2,400.

26.  The applicant inserted at the bottom column for “total amount”, $16,800, which the applicant stated was the aggregate amount of wages for the Two Workers, the applicant himself and Kwan.

27.  On 2 March 2014, the applicant gave the “Invoice” to Jackal. 

28.  After the applicant met the Accident and was hospitalized, the applicant stated that Jackal[5] brought  the “Invoice” to the hospital and gave him cash of $16,800, the amount stated in the “Invoice”  as payment of wages for the month of February for the Two Workers, Kwan and the applicant himself.  He also stated that before he signed on the “Invoice” to acknowledge receipt of the said wage payment, Jackal also gave him a copy of the Invoice for the applicant’s retention. The applicant therefore explained that the copy of the “Invoice” that the respondent produced was signed[6] while his own copy that he  attached to the SupWS as “Attachment 1” [7] was unsigned. The applicant further stated that the respondent’s name in Chinese that appeared in “Attachment 1” was inserted by the applicant afterwards for the purpose of litigation.

29.  The applicant stated that he later paid the wages of $2,400 and $12,000 respectively to Kwan and the Two Workers for the respondent after he was discharged from hospital.

C.3.2　March Wages

30.  Apart from the “Invoice”, the applicant in the 3rd Record also referred to having made another “wage record” for his and Kwan’s wages of $8,400 each for the 7 days that they had worked in March.   

31.  In Ans. (21) of the 3rd Record, it was stated that after his discharge from the hospital, the respondent instructed him to issue an invoice for his and Kwan’s wages in March, i.e. from 1 to 7 March. Hence, the applicant prepared a “wage record” (“人工工資單”) (“ “Second Invoice” ”) dated 24 March 2014 for wages in the total sum of $16,800.  Despite having been messaged via the mobile phone the “Second Invoice” by the applicant on  26 March 2014, Jackal had allegedly refused to pay the wages for March and further stated that it was not his responsibility[8].

32.  The applicant stated that he later learnt that Kwan’s wages for March were paid at the end of that month after Kwan personally contacted Jackal. However, the applicant’s wages for March remained outstanding.[9]  The applicant therefore brought a claim against the respondent for his outstanding wages at the Minor Employment Claims Adjudication Board (小額薪酬索償仲裁處). Despite having been granted a judgment (as evidenced by Exh. “A1”), the applicant has not yet been paid.          

C.4　The applicant was the respondent’s employee

33.  The applicant maintained throughout in the interviews by the Labour Department as well as at the trial that he was the employee of the respondent. The applicant denied[10] Mr Wong’s allegations that he made to the Labour Department that he was engaged, through Brother Tu acting as a middle man, as an independent contractor for the repair of waste skips. 

34.  The applicant relied on the following in support of his assertion that he was an employee, not an independent contractor.

35.  First, the applicant’s work was mostly arranged and supervised by Wong Senior and Jackal, and occasionally by Mr Wong whom he only first met at the Accident Site. The applicant stated that on all work-related matters, he was required to abide by these people’s instructions.

36.  Secondly, it was the respondent that decided the applicant’s work and rest days.  It was stated that he could not take leave from work without Wong Senior’s approval. The applicant also said that since he was the respondent’s employee, he did not have the flexibility and freedom that would have been attributed to an independent contractor by contracting out the work he was engaged to do.

37.  Thirdly, the applicant denied[11] the respondent’s suggestion to the Labour Department that the applicant and the respondent jointly supplied the tools the applicant used. The applicant stated that apart from a pair of workmen’s gloves that he brought with him when he worked for the respondent, all the tools were provided by the respondent. As an employee, the applicant stated that he only earned daily wages, and did not need to bear any financial overheads.

38.  Fourthly, the applicant also denied[12] Mr Wong’s suggestion that the money that the respondent had paid him was contract fees. He was adamant that it was for payment of wages.

C.5　How was the respondent’s identity established

39.  The applicant stated that since Brother Tu only mentioned “Wong Tsai” as the employer, he only came to know the respondent’s full name, which is more than just “Wong Tsai”, from the invoice documents that bore the respondent’s name during his work at the Accident Site. However, before he met the Accident, he had not paid attention to the exact name of the respondent.  It was only after the Accident that the applicant, based on the telephone number, 60886044, and the website address, “876.com”, that the applicant had seen on the waste skips at the Accident Site, was he able to establish the full name of the respondent after his son conducted an internet search for him by using the said information (which search the applicant produced as “Attachment 2”[13] to the SupWS).

D.　EVALUATION OF THE APPLICANT’S EVIDENCE

D.1　Effect of the respondent’s failure to call witnesses

40.  The applicant is required to prove, on the balance of probabilities, he was the employee of the respondent even though the respondent did not call any witnesses to rebut the applicant’s evidence. Nonetheless, the respondent’s failure to call any witnesses to testify is not without consequences.  Mr Lau, referring to the Court of Appeal decision of Li Sau Keung v Maxcredit Engineering Limited & Anor [2004] 1 HKC 434, urged this court to draw adverse inference against the respondent in the absence of any witnesses that it could have called to rebut the applicant’s evidence.

41.  In Li Sau Keung ([2004] 1 HKC 434 at 443-444), her Ladyship Le Pichon JA, when discussing the effect of a defendant not calling evidence, referred to a passage from the judgment of Newton and Norris JJ in O’Donnell v Reichard [1975] VR 916 at 929 cited in Cavendish Funding Ltd v Henry Spencer & Sons Ltd [1998] 6 EG 146 (at 148-149) as follows:

“It is sufficient to say that in our opinion for the purposes of the present case the law may be stated to be that where a person without explanation fails to call as a witness a person who he might reasonably be expected to call, if that person’s evidence would be favourable to him, then, although the jury may not treat as evidence what they may as a matter of speculation think that that person would have said if he had been called as a witness, nevertheless it is open to the jury to infer that that person’s evidence would not have helped that party’s case; if the jury draw that inference then they may properly take it into account against the party in question for two purposes, namely:
(a) in deciding whether to accept any particular evidence, which has in fact been given, either for or against that party, and which relates to a matter with respect to which the person not called as a witness could have spoken; …”.

42.  According to the above passage, when a party, without explanation, fails to call a witness who might reasonably be expected to call to give evidence, a court is entitled to draw an adverse inference against that party that the person’s evidence would not have helped that party in relation to any particular evidence that has been given for or against that party.

43.  This legal principle is not disputed, and applies to the present case.

44.  In this case, the applicant’s evidence that the respondent was his employer was unequivocal.  According to the 2nd Record, the respondent, before the proceedings, had been interviewed by the Labour Department in relation to the Accident, and made various allegations against the applicant (see Section C.4 above).  Furthermore, Mr Wong had also prepared a witness statement for the purpose of opposing the applicant’s allegation that the respondent was the applicant’s employer.

45.  Yet, without explanation, the respondent did not call Mr Wong, let alone Brother Tu, Wong Senior and Jackal, who had been alleged by the applicant to have been closely connected with the employment.  Applying the above- stated legal principle, this court is, in my view, perfectly entitled to infer that had these persons been called, their evidence would unlikely rebut the applicant’s allegations made against them.  I shall so infer.

46.  In the premises, the applicant’s assertions against the respondent stand unrebutted. When determining whether the applicant can prove, on the balance of probabilities, that the respondent was his employer on the date of Accident, this court only needs to examine the applicant’s assertions alone. 

47.  Before I conclude the discussion on this subject on the drawing of adverse influence, I should also make it clear that I reject Mr Tam’s argument that I should apply the same principle by drawing an adverse inference against the applicant in not calling Brother Tu, the Two Workers and Kwan to be cross-examined.

48.  Whilst there is no property in a witness, I agree with Mr Lau’s reply submission that the applicant has no duty to call any witnesses for the respondent to cross-examine. In any event, the circumstances under which a court should draw adverse inference do not apply to the applicant’s situation. This is not a case that the respondent has adduced evidence against the applicant with the latter having failed to call any witness to testify against the respondent.  Plainly, the converse is the truth. Hence, the evidence of those persons that Mr Tam referred to, if called by the applicant, will only go to corroboration. That being the case, whether the applicant wishes to call witnesses to corroborate his case, is a matter, as Mr Lau rightly suggested, entirely for the applicant.  I therefore find Mr Tam’s argument wholly misconceived, and reject it.

49.  When evaluating the applicant’s credibility, I should adopt  the undisputed guidelines for the assessment of a witness’ credibility discussed in Hui Cheung Fai & Anor v Daiwa Development Ltd & Ors[14] (at [78] and [79]), cited by Mr Tam, by having regard to the overall impression of the applicant. More importantly, I only need, in the absence of any rebuttal evidence to discredit the applicant’s evidence,  to take into account, among other things, first, the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events; and second, the consistency of the applicant’s evidence with undisputed or indisputable evidence, and the internal consistency of his evidence, which is tested by a comparison between his oral testimony, the two witness statements and   the 1st, 2nd and 3rd Records.

D.2　Criticisms of the applicant’s credibility

50.  Mr Tam advanced two broad contentions in suggesting that the applicant’s evidence was not credible. First, the “Invoice” is inconsistent with the applicant’s assertion of being an employee. Second, the applicant is unable to give a satisfactory explanation for the alleged inconsistencies between the applicant’s oral testimony on one part and his witness statements and the answers set out in the Records of Interviews on the other.

D.2.1　The “Invoice” is inconsistent with the applicant’s alleged employment

51.  It was contended that the applicant’s use of the word “invoice” on the Former Firm’s notepaper alone is, on its face, inconsistent with the existence of an employment relationship.  Other features on the “Invoice”, Mr Tam stated, tended to show that it was not a genuine record of wages.

52.  One of the features that Mr Tam referred to was the information that the applicant recorded in the Column for “摘要” (“summary”) (see para 25(2) above).   Mr Tam contended that were the Invoice a true record of wages as the applicant alleged, the information set out in the said column would not have been required. A “normal person” (which I believe Mr Tam to have meant to be a “reasonable employee”), Mr Tam suggested, would not have made such a record.

53.  In the event, Mr Tam stated, the applicant could not give any credible explanation for inputting the information for the “summary” Column on the “Invoice” when he stated under cross-examination that Brother Tu required such information to show it to the “employer/boss” (“因為圖哥要知做過咩寫返俾老細睇”). Mr Tam asked this court to disbelieve this explanation for it had not been mentioned in any of the applicant’s previous statements. All that Brother Tu had allegedly instructed the applicant to do, according to the SupWS, was the making of a record of the work days on a piece of paper (“你求其搵張紙寫低啲工友做左幾多工，做個紀錄，然後交俾我出糧就得”).

54.  Mr Tam further contended that since the applicant had given various inconsistent statements to explain why he had used the term “invoice” to describe a wage record by the use of a notepaper of the Former Firm, the applicant should not be believed.  

55.  Mr Tam stated that one of the applicant’s explanations was that the making of the “Invoice” was in accordance with the respondent’s instructions otherwise it would not pay the applicant the wages : 1st Record, Ans. (21)[15].

56.  Yet, the applicant later stated that he did so because Jackal asked him to in the beginning of March 2014, otherwise the respondent would not pay him : 2nd Record, Ans. (7)[16].

57.  These statements in the 1st and 2nd Records are, Mr Tam contended, inconsistent with his later explanation in the 3rd Record when he then said that he had written it on 26 March 2014: 3rd Record, Ans.(21).[17]

58.  However, what the applicant had stated in the Records of Interviews are different to what was contained in his the SupWS in which it was averred that he was told by Brother Tu to make a record for the payment of wages[18].

59.  It is Mr Tam’s contention that the above versions of explanations are at best self-serving, and at worst self-contradictory.  Mr Tam suggested that the likely truth was probably that the applicant was not engaged as an employee but in the capacity of the sole proprietor of the Former Firm albeit that it had already ceased business.

60.  Additionally, the fact that the applicant had admitted under cross-examination that he was the head (呀頭) of Kwan and Jackal and Wong Senior gave work instructions not to Kwan directly but through the applicant, Mr Tam argued, suggests that the applicant was engaged as an independent contractor rather than as an employee.

D.2.2　The inherent inconsistencies of evidence

61.  Mr Tam next argued that the applicant’s evidence should be rejected on account of the numerous inconsistencies between the applicant’s oral testimony and the written representations – by which I understand him to mean the Records of Interviews and the witness statements, which statements are in any event unreliable, as they had been prepared by his legal representatives.

62.  The objections to the applicant’s evidence Mr Tam raised in his closing submission are rather loose and scattered.  They can be summarized into two grounds below.

63.  First, the applicant’s evidence on the identity of the alleged employer.  Mr Tam contended that the applicant, as evidenced by the different answers that he gave under cross-examination in the first and second days of trial, had clearly made up the evidence on the employer’s identity as he went along.  In the first day of trial, the applicant, Mr Tam stated, agreed with Mr Tam’s suggestion that because he had no information on the identity of his boss, he could not exclude the possibility that he was employed by another employer other than the respondent. However, when he stated the next day that he knew from the beginning that his boss was “Wong Tsai” (“王仔”), Mr Tam contended that the applicant had obviously shifted his evidence.

64.  Overall, the applicant’s evidence on the identity of the respondent, according to Mr Tam, is unreliable.  It was contended that the applicant is not able to rely on the exhibits, Exh. “A2” and Exh. “A3”, photoes of the waste skips and cargoes, to prove that the said waste skips belonged to the respondent.  Contrary to the applicant’s assertion that they linked them to the respondent, Mr Tam suggested that none of the photoes shown in these exhibits shows the respondent’s name.

65.  Second, the applicant’s evidence about the lack of a written employment agreement, Mr Tam contended, is contradicted by the applicant’s own  response set out in the 3rd Record[19], in which the applicant had referred to an agreement on daily wage and working hours.

D.3　Discussion

66.  The only witness in this trial was the applicant, whose evidence is not rebutted by the respondent. I have observed the applicant’s demeanour as he testified, and tested his evidence against his previous statements that include his witness statements and the Records of Interviews.  Mr Tam’s remark that the applicant is not a perfect witness is fair in view of the inconsistencies and contradictions that I have also noted in some of his evidence.  Nonetheless, after having carefully observed the applicant at trial in the course of two days, and considered his explanations for the contradictions and inconsistencies, I have found the applicant, on the whole, an honest witness, doing his best to tell the court the truth though at times rather clumsily, which I believe is probably due to his limited education (of up to Primary 5).

67.  First and the foremost, I do not accept Mr Tam’s criticism that I should reject the applicant’s evidence stating in his witness statements on the ground that they were prepared by his legal representatives. This submission is devoid of any common sense, and must be rejected.

D.3.1　The applicant’s evidence on the identity of the respondent is consistent and corroborative

68.  I do not accept Mr Tam’s contention that the applicant changed his evidence on the identity of the employer but am satisfied that the applicant’s credibility is unshaken despite Mr Tam’s lengthy cross-examination.

69.  Mr Tam’s criticism about the applicant’s alleged different answers given in the two days’ of trial, in my finding, is wholly unjustified. I find that the applicant’s evidence is consistent in all respects. Based on the applicant’s evidence, it is clear that he established identity (or the full name) of the respondent in three different stages (see Section C.5 above).  Stage one, the employer’s name was known as “Wong Tsai” (which is in fact a short-version name of the respondent). Stage two, the applicant became aware of the name which was a limited company by looking at the company documents and invoices at the Accident Site. Stage three, the applicant, for the purpose of litigation, established the full name of the respondent by conducting an internet search on the telephone number and a website address.

70.  The applicant’s evidence that he could not rule out a possibility that the identity of his employer could have been somebody else other than “Wong Tsai” in my view merely reflects the applicant’s state of knowledge at stage one.  Thus, when the applicant’s evidence is examined in the proper context, I am unable to find any contradiction.  Mr Tam’s cherry-picking approach is respectfully rejected.   

71.  Mr Tam’s argument that the documents that the applicant relied on are not corroborative, in my view, cannot stand in light of the cogency of the evidence. Contrary to Mr Tam’s contention, I find that the documents that the applicant adduced (“Attachment 2” and exhibits, Exh.“A2” and Exh.“A3”) are capable of corroborating the applicant’s assertion that the waste skips that he repaired in the course of his employment belonged to the respondent.

72.  Pertinently, it is important to bear in mind the provenance of the photoes shown in Exhs. “A2” and “A3” and the circumstances in which they were adduced at trial.  Unlike “Attachment 2”, which was prepared for the purpose of litigation, the photoes of Exhs. “A2” and “A3” were only incidentally mentioned by the applicant without any prompting in the course of the applicant’s testimony at the re-examination by counsel towards the end of the trial when the applicant was trying to explain why he was able to remember the telephone number of the respondent.  He said the mobile number “60886044” shown on the waste skip was in fact painted by him after he had finished the repair work.

73.  Had Mr Tam undertaken a closer examination of the photoes in these two exhibits, I believe that he could have seen that these exhibits in fact throw light on the identity of the respondent. Whilst I tend to agree with Mr Tam that two of the photos of Exh. “A2” showing only an unmarked and unpainted waste skip do not seem to have much probative value, it is however necessary to mention the third photo that shows a partial view of a blue painted waste skip overlaid with 6 numbers (“886044”) in white paint.

74.  Coincidentally, the said group of 6 numbers completely match with the last 6 numbers of the 8-digit telephone, “60886044” (which is the same telephone number that the applied used for establishing the identity of the respondent: para 39 above), revealed in the photo of the lorry in Exh. “A3”.  

75.  More importantly, the internet address (“876.com.hk”) and the vehicle number (“876”) shown on the lorry in the photo of Exh. “A3” are the same as those shown in the lorries that are visible in the coloured photocopy of “Attachment 2”, which document the applicant disclosed in the SupWS to establish the identity of the respondent.

76.  In the circumstances, when the documents disclosed in “Attachment 2”, Exhs “A2” and “A3”, are considered as a whole rather than in isolation, they, in my judgment, cogently prove that the applicant worked for none other than the respondent for whom the applicant repaired its waste skips.

D.3.2　The applicant was not engaged as a contractor but as an employee

D.3.2.1　The applicant’s explanation for the making of the “Invoice” to record wages is reasonably credible

77.  It cannot be gainsaid that the word “invoice” is not a coherent description of a wage record, which the applicant had averred that he intended to make. Neither was the use of the notepaper of the Former Firm anomalous of a usual wage record notwithstanding that the Former Firm already ceased business.  In the premises, this court should critically examine the applicant’s evidence when considering whether the explanation he gave for the making of the “Invoice” is reasonably credible and acceptable.

78.  It is trite that a court is not bound by the words on a document. The true legal relationship between the parties should be determined by the court: see Chan Kwok Kin v Mok Kwan Hing & Anor[20] at [20] and [21].

79.  Thus, I agree with Mr Lau that words on the “Invoice” are themselves not determinative of the true nature of the legal relationship between him and the respondent.  Having regard to the lack of rebuttal evidence, I only need to consider whether the applicant’s explanations for the making of the “Invoice” as the applicant’s wage record are credible.

80.  I find the applicant’s explanation on the circumstances as to how the “Invoice” came about credible. I accept his explanation that, the applicant, as Brother Tu had told him, was required to prepare a wage record for the payment of wages. I find that it is inherently credible that the use of the left over notepaper of the Former Firm that was closed was random. In any event, since the Former Firm at that time had already ceased business, it no long had any legal status to conduct business in its name. Hence, its notepaper, in my view, might have been unsatisfactorily misleading but the Former Firm no longer had any entity capable of creating a legal relationship. Thus, Mr Tam’s contention that the issuance of the “Invoice” in the name of the Former Firm was suggestive of the applicant providing services in the capacity of an independent contractor in the name of the Former Firm, in my view, cannot stand and is thus rejected.

81.  Given the applicant’s limited education, I’d be inclined to believe the applicant’s explanation that his use of the word “invoice” was a misnomer for wages. I accept his explanation given under cross-examination that he only realized that the choice of the word was inappropriate (“我現在發覺用詞不當”). Whilst the applicant was carrying out his trade in the name of the Former Firm, the applicant, as the sole-proprietor, would have likely in the past issued invoices in the name of the Former Firm.  It is therefore likely that the applicant might have, out of old habit, done the same on this occasion for the February wages.  

82.  I also believe the applicant’s explanation that he had recorded in the “Invoice” the types of work carried out by the Two Workers, Kwan and himself because the applicant had been told by Brother Tu that the respondent required such information.

83.  More importantly, I find that the all the information the applicant had written on the “Invoice” was akin to a wage record rather than a contractual invoice.  Notwithstanding that the applicant had used the pre-set invoice format to make the record, the information that he had recorded in fact was not what was described under each column.  By way of illustration, dates (instead of the name of the site) were recorded under the Column for the “name of the site”; the amount of daily wage of $1,200 (instead of the quotation price) was written under the Column for “quotation price”.

84.  For the reasons stated above, I’m inclined to find that the “Invoice” was a genuine record of wages for the wages in February.  I do not find that the applicant’s use of the notepaper of the Former Firm and the word “invoice” on the Invoice undermines the applicant’s case that he was the respondent’s employee.

85.  In considering the credibility of the applicant’s explanation, I have also examined some of the inconsistencies contained in the answers of the Records of Interviews with his subsequent evidence. The applicant has clarified (see footnote 2) some of the inconsistencies.  As to some, I find them quite minor, and are likely due to the lapse of memory or the applicant having been confused (see footnote 5, for example). These, in my judgment, do not materially undermine the applicant’s credibility.

86.  I find Mr Tam’s allegation about the applicant’s inconsistent explanation for the making of the “Invoice” unsubstantiated and based on his wrong reading of the evidence. To properly understand the applicant’s explanation, it is necessary to start the analysis by noting that the applicant had issued two separate documents respectively for the wages for the months of February and March (see paras 23 & 31 above). Mr Tam failed to appreciate this important evidence, hence, the unwarranted criticism.  

87.  First, when the applicant stated in the Records of Interviews that an invoice was prepared in accordance with the respondent’s instructions otherwise the respondent would refuse payment of wages, it is abundantly clear, when read in context, that he was not referring to the “Invoice”, but to the Second Invoice.[21]

88.  The Second Invoice has probably escaped the attention of both Mr Lau and Mr Tam as it was not produced at trial. This has probably led Mr Tam mistakenly believing during cross-examination of the applicant that these answers in the Records of Interviews concerning the Invoice when it fact they did not.

89.  When these answers are read in context, it is plain, in my view, that they were in relation to the Second Invoice in relation to the wages for the month of March. Evidently, when the applicant stated in the 2nd Record (Ans.(7)) that Jackal asked him to prepare an invoice in the beginning of March, he could not have referred to the Invoice as by that time he had, according to his evidence (see paras 23 & 27), finished writing the “Invoice” (on 1 March 2014) and given it to Jackal (the next day on 1 March).

90.  In my finding, due to Mr Tam’s misreading of the answers in the Records of Interviews, he has also confused the applicant during the cross-examination. As a result, the applicant seemed to have also forgotten about the Second Invoice, and gave very confusing evidence to the questions that were asked on a wrong premise.

91.  In my analysis of the answers of the Records of Interviews and the applicant’s evidence, I’m inclined to accept that the applicant’s two explanations are consistent.  The explanation (in the SupWS: at para 3) that it was prepared in accordance with Brother Tu’s instructions is referable to the “Invoice”.  The explanation that Jackal had instructed him to prepare an invoice otherwise the respondent would not pay him wages (Ans. 21 of the 1 st Record and Ans 7 of the 2 nd Record) is in relation to the Second Invoice for the wages in March.

92.  Finally, I also do not find that the applicant’s evidence given under the cross-examination that he regarded himself as the “head” (呀頭) of Kwan undermines the applicant’s credibility that he was engaged by the respondent as its employee. Mr Tam’s suggestion that such answer implicated the applicant as the contractor, was made, in my view, totally out of context.

93.  In order to understand why the applicant had given such answer by regarding himself as the “head” (呀頭), one needs to also consider the clarification he made to this court that when he said “head”, he did not mean it to be contractor (“呀頭不是判頭”). It was stated that the reason why he regarded himself as the “head” was because the Two Workers and Kwan were both introduced to the respondent by him and that Jackal and Wong Senior did not know Kwan. 

94.  Based on the circumstances as how the Two Workers, and later Kwan and himself worked as the formers’ replacement workers, I find that it is not unreasonable for the applicant to have undertaken the task of receiving wages on behalf of himself as well as the others and to have regarded himself as the “head”.

95.  I do not find that the applicant’s self-perceived role as the “head” of the job inconsistent with the applicant being the employee as he asserted.  The applicant is undisputedly a very experienced welder with over 40 years of experience in this field.  Apart from being a skilled welder, he would have been familiar with the trade practice and acquainted with other welders whom the applicant would introduce to work if such work was available.  I do not find that the role the applicant had undertaken was anything other than an employee, particularly after having taken into account the unrebutted evidence that the leave days were determined by Wong Senior of the respondent and that work tools were provided by the respondent. Pertinently, also, the “Invoice” for wage payment that the applicant had prepared shows that the applicant was not different to either the Two Workers or Kwan, each one of them having earned a daily wage of $1,200.

D.3.3　The alleged inconsistent statements as to whether there was any agreement of employment

96.  I should also discuss Mr Tam’s final allegation.  It was alleged that the applicant’s evidence that there was no agreement having been made with Wong Senior is contradicted by Ans. (22) of the 3rd Record concerning the daily wage, working hours and the payment date. In my judgment, this allegation has been unfairly made. As a matter of fact, I find the applicant’s evidence in this regard, whether in the 3rd Record or in his oral testimony, substantially clear and consistent.  The applicant has unequivocally stated (see Section C.2 above) that there was no written agreement when he commenced his employment with the respondent.  Some of the terms were made orally between Brother Tu and himself, while some were by implication through trade practice (such as working hours and the payment date)

97.  Mr Tam’s said allegation is thus also rejected.

D.3.4　Conclusion of the findings

98.  From the above analysis, I find that the applicant had proven on the balance of probabilities that he was employed by the respondent on the Accident date.

99.  I find as a fact that:

(1)  The applicant became the employee of the respondent along with Kwan as from 27 February 2014 after the Two Workers left.  The terms of the employment were agreed partly by oral agreement between Brother Tu on behalf of the respondent and himself on 20 February 2014, partly by conduct when Wong Senior did not suggest any changes when he started on 27 February, and also by implication through established trade practice.

(2)  The applicant was not an independent contractor.  His leave days were subject to the approval of Wong Senior and the tools were supplied by the respondent.

(3)  Exh. “A1” is capable of corroborating the applicant’s case that the respondent was the employer, who still owes the applicant outstanding wages for March.

(4)  The respondent’s identity was first known to the applicant as “Wong Tsai”. The applicant only became aware of the full name of the respondent after he started working.

(5)  “Attachment 2”, Exhs. “A2” and “A3” are corroborative documentary evidence showing that the waste skips that the applicant was employed to repair belonged to the respondent.

100.  In conclusion, the answer to Issue (1) is in the affirmative.  The respondent is liable to pay the applicant compensation, which I will assess below.

E.　QUANTUM: WHAT IS THE APPROPRIATE PERCENTAGE FOR LOSS OF EARNING CAPACITY

101.  The applicant was assessed by the MAB (the Medical Assessment Board of the Labour Department). After the applicant’s objection to the initial assessment, the MAB on 29 July 2015 issued a Certificate of Review of Assessment by the prescribed Form 9 (“Form 9”).  The review assessment was done on 15 July 2015 after the expiry of sick leave on 4 February 2015. 

102.  The applicant’s injury recorded in the Form 9 is stated as, “Fracture of L2 resulting in back pain, lower limb weakness and reduced control in bladder”.  The duration of sick leave was assessed as from 7 Match 2014 to 4 February 2015, and the loss of earning capacity at 6 percent.

103.  The applicant was not satisfied with the said assessment and appealed against it.  For the purpose of the appeal, the applicant was granted leave to engage an orthopaedic specialist, Dr Johnson Lam Chi Keung (“Dr Lam”).  As the respondent has chosen not to engage any expert, Dr Lam is therefore the sole expert in this case. In his report (“Report”) dated 17 October 2016, Dr Lam opines that for the applicant’s L2 fracture, the loss of earning capacity is 12 percent.

104.  Based on Dr Lam’s opinion, Mr Lau urges this court to adopt 12 percent as the applicant’s loss of earning capacity.  On the other hand, Mr Tam contended that the 12 percent was exaggerated and this court should instead adopt the 6 percent as assessed by the MAB.

E.1　The legal principles

105.  First, the proper approach for the hearing of an appeal against the MAB is authoritatively stated by the Court of Appeal in Tsang Kwong Tong v Tennille Decoration & Design Ltd & Ors[22] (at [39] & [47]) that the court should start afresh, and judge an assessment by testing the validity of the MAB’s conclusions against the total available evidence.

106.  Secondly, in assessing the percentage of loss of earning capacity, medical opinion is useful, but it is for the court to come to its own conclusion[23].   

107.  Apart from the above principles, I ought to further take into account that Dr Lam is the solo expert in this case when considering the weight to be attached to his opinion. A more vigorous assessment should be adopted.

E.2　Dr Lam’s opinion

108.  Dr Lam examined the applicant on 13 October 2016, almost 2 and ½ years after the Accident.  Dr Lam reviewed the documents that he was provided with, which included (i) various medical reports, medical notes and medical certificates from the government hospital where the applicant was treated; (ii) the radiology report and a set of MRI scan dated 3 March 2015 from a hospital in Mainland China; and (iii) the assessment certificates of Form 7 and Form 9 issued by the MAB.

109.  Dr Lam also took a total of 4 radiographs of the applicant’s thoracic and lumber spines.  The X-ray of the lumber spine reveals “healed compression fractures at L2 and L4 vertebrae. The degree of compression/collapse was much more severe at L2 compared with L4… The degree of compression/collapse was severe (about 38%) at L2...”[24].

110.  The applicant’s injury that was caused by the Accident, according to Dr Lam’s diagnosis is “compression fracture L2”.   In Dr Lam’s opinion, the compression at L4 shown in the lower lumbar spine already existed before the Accident, which might have been partly due to degenerative changes and partly caused by an earlier accident that the applicant met 6 months before the Accident.

111.  Dr Lam opines that, in view of the applicant’s residual pain and the physical impairment caused by stiffness and the structural alteration to the spine, the applicant is unable to return to his pre-accident job that required heavy physical demands on his back.  Dr Lam was of the opinion that the applicant’s post -Accident employment as a supervisor in a construction site that does not require heavy lifting is suitable for him.

112.  Based on the “Guides to the Evaluation of Permanent Impairment, 5 th /6 th Edition, American Medical Association”, and Table 15-3 “Criteria for Rating Impairment Due to Lumbar Spine Injury”, Dr Lam is of the opinion that DRE (diagnosis-related estimate) Lumbar Category III 10%-13% Impairment of the Whole Person should be an applicable criterion for assessing the applicant’s injury at L2.  Accordingly, it is Dr Lam’s opinion that the applicant’s “L2 fracture should carry 12 % whole person impairment and 12 % loss of earning capacity”[25].

E.3　The court’s assessment

113.  Since Dr Lam is the solo expert in this case, I have carefully considered his evidence adduced by the Report.  The Report is detailed and thorough containing Dr Lam’s review of all the relevant medical reports and his findings taken at the examination.  Dr Lam’s diagnosis of the applicant’s L2 fracture injury is supported by the medical reports of the government hospital and the injury assessed by the MAB. I accept his diagnosis that the applicant suffered a fractured L2, resulting, as evidenced by the x-ray record, in compression of about 38% (see para 109 above).

114.  Absent challenge to the appropriateness of the use of the said Guides as the assessment criteria, I accept that the DRE set out in the said Guides is an appropriate method for determining spinal impairment.  According to the said Table 15-3, Category III applies to, among others, factures with 25-50% compression of one vertebral body.  In the instant case, the percentage of compression is found to be 38%. I am thus satisfied as to the correctness of Dr Lam’s opinion that Category III should be applicable. Based on the objective evidence adduced in the Report and the findings made by Dr Lam, I find that the applicant’s spinal injury was severe as reflected from the degree of compression at L2. I further accept Dr Lam’s opinion that the applicant, due to the residual symptoms, is unable to resume any pre-Accident job that requires heavy lifting. In the circumstances, I accept Dr Lam’s opinion that 12 percent properly reflects the applicant’s degree of impairment and the loss of earning capacity.

115.  In conclusion, I allow the applicant’s appeal against the Form 9 assessment and substitute the MAB’s 6 percent with 12 percent.

F.　QUANTUM

116.  In the circumstances, the calculations set out in Mr Lau’s closing submission should be adopted, which are set out below:

                   Section 9:  $145,152 (i.e. $16,800 x 72 x 12%)

                   Section 10:  $152,320 (i.e. $16,800/30 x 340 days x 4/5)

                   Section 10A:  $2,130

                   ========================================

                   Total:  $299,602

117.  The respondent therefore shall pay compensation in the total sum of $299,602.

G.　CONCLUSION AND ORDER

118.  Judgment is entered against the respondent. I grant an award in the total sum of $299,602 with interest at half of the judgment rate from the date of the Accident to the date of judgment, thereafter at judgment rate until full payment.

119.  There shall be a costs order nisi that the respondent do pay the costs of these proceedings, with certificate for counsel, to be taxed if not agreed.   The applicant’s own costs are to be taxed in accordance with the Legal Aid Regulations. 

120.  Any application for the variation of the above nisi order should be by summons within 14 days of the handing down of this judgment, failing which, the nisi order shall become absolute.