CHAN HO YUEN v. MULTI CIRCUIT BOARD (CHINA) LTD

DCEC 549/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 549 OF 2008

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IN THE MATTER OF AN APPLICATION BETWEEN

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JUDGMENT ON LIABILITY

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1.  This is a tragic case. Two young men were involved in a car accident in the Mainland with one dead and the other one seriously injured.

2.  These are claims for employees' compensation. Mr. Chan Ho Yuen (“Mr. Chan”) and Mr. Chan Chi Kai (“the Deceased”) were the employees working for the Respondent at the material time.  On 5 February 2008, Mr. Chan and the Deceased attended the annual dinner of the Respondent's factory in Shenzhen (“the Annual Dinner”).  The Annual Dinner finished at around 9:00 pm.  After the Dinner, instead of joining the other colleagues to come back to Hong Kong, they paid a visit to a karaoke parlour (“the Karaoke Parlour”) with a colleague Mr. Lee Yiu Leung (“Mr. Lee”).  They left the Karaoke Parlour at around midnight, and Mr. Lee drove Mr. Chan and the Deceased in his car (“the Car”) to the Shenzhen border.  On the way, the Car crashed into a barrier at the Shajing section of the Guang-Shen Highway.  Mr. Chan had suffered serious injuries and his left leg was amputated at the scene, and the Deceased died in the accident.

3.  Mr. Chan is the Applicant in DCEC No. 549 of 2008 claiming for employees' compensation against the Respondent.  The dependants of the Deceased are making the same claim against the Respondent in DCEC No. 1527 of 2008.

4.  In both Applications, the Respondent denies that the accident occurred in the course of the employment.  By the order made by myself on 24 September 2009, both Applications would have a split trial as to liability and quantum and the trial on liability of both Applications shall be heard together.  This is the trial on liability of these 2 Applications.

The undisputed facts

5.  At the trial, Mr. Chan, Mr. Lee and Ms. Anna To, the latter being the then Senior Sales Manager of the Respondent (“Ms. To”), testify on behalf of the Applicants' case, while Mr. Fung Chi Kin who was the then General Manager of the Respondent's factory in the Mainland (“Mr. Fung”), and Mr. Chu Hin Kwan Wilson who was the then Chief Executive Officer of the Respondent (“Mr. Chu”) testify on behalf of the Respondent's case.

6.  Save as the purpose of the gathering in the Karaoke Parlour and some other related matters, there is actually not much dispute between the parties about the facts of the present case.  Before I resolve the factual differences, I will first set out the undisputed facts.

7.  The Respondent was in the circuit boards business.  The Respondent had an office in Kwun Tong in Hong Kong while the production line was in the Mainland.  The Respondent used to have 2 factories in the Mainland with one in Shenzhen and the other one in Dongguan.  However, the operation of the Dongguan's production line ceased in late 2007.  At the time of the accident, the Respondent had about 500 to 600 Mainland workers working in the factory in Shenzhen (“the Factory”).

8.  The Respondent had a total of about 10 odd employees working in the Hong Kong office (“the Office”) including Mr. Chan and the Deceased who were working in the Sales Department.

9.  It was the custom of the Respondent to organise an annual dinner on the eve of every Lunar Chinese New Year.  In 2008, the Annual Dinner was held in Ju Hao Hotel in the Songgang District (“the Hotel”) on 5 February 2008, which was one day before the Lunar New Year's eve.  The Lunar New Year holiday of the Respondent was from 6 to 12 February 2008. 

10.  There is a dispute as to whether it was compulsory for the Respondent's employees in the Office to attend the annual dinners, but in practice, unless a particular staff was sick or was on leave, all the staff members of the Office would attend the annual dinners.  If a particular employee chose not to join the annual dinner, he or she could stay in the Office and work, but it rarely happened.  The annual dinners were mainly organised by the staff members of the Factory in the Mainland, and the Respondent would pay for dinners and the travelling expenses of the staff members of the Office who attended the dinners.  About 500 Mainland workers attended the Annual Dinner in February 2008.

11.  On 5 February 2008, Mr. Chu, his wife and some of the staff members of the Office including Mr. Chan and the Deceased departed from Hong Kong to attend the Annual Dinner in the Respondent's 7-seater vehicle (“the 7-seater Vehicle”) driven by Mr. Chu.  Before arriving at the Hotel, the 7-seater Vehicle made a stop in the Respondent's factory in Dongguan, and the group stayed in the factory for about an hour.

12.  For the remaining staff members of the Office who attended the Annual Dinner, they took the cross-border bus in Kwun Tong.  After arriving at the Huanggang Customs Port, a 7-seater vehicle of the Factory then took them to the Hotel.  Similar transportation arrangements were made in the previous years.  Save as two employees with one on vacation leave and the other one on sick leave, all the staff members in the Office attended the Annual Dinner.

13.  The Annual Dinner was scheduled to start at 6:30 pm and to end at about 8:45 pm.  The Factory had 2 vehicles (“the Factory Vehicles”): one was a 7-seater vehicle and the other one was a 12-seater vehicle.  The arrangement was that all the staff members of the Office would travel back to Hong Kong, or at least to the border, after the Annual Dinner either in the 7-seater Vehicle or in the 2 Factory Vehicles.  As a total of 3 vehicles were made available that evening, there was more than adequate capacity to take all the staff members back to Hong Kong.  The Respondent did not allow the drivers of the Factory Vehicles to consume alcohol in the Annual Dinner.

14.  Before the completion of the lucky draw in the Annual Dinner, most of the staff members of the Office were prepared to leave. Just at that particular moment, Mr. Chan and the Deceased came to Mr. Chu and told him that they were going to stay behind.  There is some dispute between the parties as to who were present in the relevant conversation and its contents. After the conversation, Mr. Chu did not object for Mr. Chan and the Deceased to stay behind.

15.  Mr. Lee then drove the Car and took Mr. Chan and the Deceased to the Karaoke Parlour which was about half-an-hour's drive away from the Hotel.

16.  After leaving the Karaoke Parlour at about 12:30 am, Mr. Lee drove Mr. Chan and the Deceased in the Car to the Huanggang Customs Port, and the accident occurred at about 12:52 am at the Shajing section of the Guang-Shen Highway.  By looking at the map, I am satisfied that the return journey from the Hotel to the Customs Port and the return journey from the Karaoke Parlour to the Customs Port would have passed through the same spot in the Guang-Shen Highway in which the accident occurred.

17.  After the accident, the Mainland Police found that the alcohol contents in the blood samples of Mr. Lee, Mr. Chan and the Deceased were 18.9mg/100ml, 52.7mg/100ml and 229.6mg/100ml respectively.  Mr. Lee was detained by the Mainland Police for about 13 months starting from April 2008.  There is also an order made by a Mainland court ordering Mr. Lee to pay compensation in the sum of about RMB¥ 800,000 to the Deceased's family.

18.  Mr. Lee was originally the head of the Respondent's factory in Dongguan.  After the closing of the production line in Dongguan, Mr. Lee was demoted and became the Purchasing Manager of the Respondent's Factory in Shenzhen.  Although Mr. Lee was strictly higher in rank, Mr. Lee was not the supervisor of Mr. Chan and the Deceased.  By that time, the supervisors of Mr. Chan and the Deceased were Mr. Castor Tang and Ms. To respectively.

19.  In order to facilitate the smooth operation of the production line, the Respondent had some regular liaison meetings attended by the relevant personnel from the Factory, the Purchasing Department and the Sales Department.  To attend these meetings, Mr. Chan and the Deceased had to travel to the Mainland once or twice a week.

20.  Although it was not in writing, there was a certain practice for the travelling arrangement of the staff members of the Office attending business trips in the Mainland.  The Factory had a number of Factory Vehicles for use by the staff members of the Office.  If the staff members had to go for business trips, they would arrange for the Factory Vehicle to pick them up at the Customs Port.  After completing the work, the Factory Vehicle would then take them back to the border.  In the event that all the Factory Vehicles were not available, they would take the appropriate public transport, mostly taxi for safety reason, and the Respondent would reimburse them for the expenses concerned.  The Respondent also had the 7-seater Vehicle which carried a cross-border licence plate.  If Mr. Chu was driving the 7-seater Vehicle to the Factory, he might also take some of the staff members with him.

21.  If the staff members of the Office had to stay overnight for the business trips, they could stay in the staff quarters, which had 2 to 3 beds, near to the Factory.  As cleaning work was required, prior arrangement had to be made for the staff members to stay in the quarters.

22.  Although Mr. Lee is a Hong Kong citizen, he was working for the Respondent's Factory in Shenzhen and so he had to stay there most of his working time.  Mr. Lee bought the Car in the Mainland about one year prior to the accident.  The Car only carried a Mainland licence plate and so he could not drive the Car back to Hong Kong.  After completing a week's work, Mr. Lee would usually drive the Car to the border and park it in a space near the Customs Port.  He would then cross the border and come back to Hong Kong for the weekend.  In the beginning of the week, he would cross the border and drive the Car from the Customs Port to the Factory.  It was the practice of the Respondent to reimburse Mr. Lee for the toll fees relating to these trips but not the parking fees.  If required, Mr. Lee might use the Car for the business of the Respondent, for example to carry the Respondent's employees or even business clients to the border, and the Car had been used for such purposes at least 10 times.

The disputed facts

23.  As I see it, the main areas of the factual dispute are as follows:

(i)   the purpose of the gathering in the Karaoke Parlour that evening;

(ii)   the working relationship between Mr. Lee, Mr. Chan and the Deceased, which in turn affected whether Mr. Chan and the Deceased were “compelled” to attend the gathering in the Karaoke Parlour; and

(iii)   soberness of Mr. Lee, Mr. Chan and the Deceased near the end of the Annual Dinner that evening.

All these factual issues are inter-related and I propose to deal with them together.

24.  It is common ground that there was some turmoil in the Respondent at the material time.  The business of the Respondent had dropped significantly, and the owner of the Respondent's parent company had sent another person to take care of the production side of the Respondent, leaving Mr. Chu to be in charge only of the sales and marketing aspects of the business.

25.  Despite such background, Mr. Chan and Mr. Lee give two very different accounts about the purpose of the gathering in the Karaoke Parlour.

(i)   Mr. Chan's evidence

26.  According to Mr. Chan, near the end of the Annual Dinner, Mr. Chan and the Deceased planned to take the 7-seater Vehicle driven by Mr. Chu to go back to Hong Kong.  However, because Chinese New Year was approaching at that time and there was a long intervening holiday, in order to avoid confusion in the production line, “Supervisor Lee” (ie. Mr. Lee) had asked them to stay behind to discuss matters relating to the production schedule.  The Deceased therefore approached Mr. Chu and informed the latter about their proposed meeting.  After the Annual Dinner, Mr. Lee drove Mr. Chan and the Deceased to the Karaoke Parlour for such business discussion.

27.  As Mr. Lee was the former head of the factory in Dongguan and Mr. Chan considered himself only a junior staff joining the Respondent in March 2006, Mr. Chan felt obliged to comply with Mr. Lee's instruction.  Further, there was some turmoil in the Respondent and Mr. Chan did not want to lose his job by that time.  In such case, he did not want to say “no” to Supervisor Lee who was a more senior staff in the Respondent, and he therefore agreed to join the business meeting in the Karaoke Parlour.  During cross-examination, Mr. Chan admits that if Mr. Lee had ever told him that going to the Karaoke Parlour was for entertainment only, he would have turned down the invitation.

28.  Mr. Chan had not drunk a lot in the Annual Dinner. Although he had to go round the tables and to make toasts to various colleagues, Mr. Chan used some non-alcoholic drink for the toasts and pretended it to be alcoholic drink.  By reason of such common trick, he did not need to drink so much in the Annual Dinner.

29.  After arriving at the Karaoke Parlour at about 9:30 pm, Mr. Lee told them that the business of the Respondent was very bad and there would be a huge adjustment in the Respondent's business strategy and management.  There could also be a great change in the personnel as well.  To cope with such changes, Mr. Lee hoped that the cooperation between the sales team and the production team could be enhanced.  Further, they discussed matters such as budgeting plans, clients' instructions and prices of the production materials.  They stayed in the Karaoke Parlour for about 2 hours, and Mr. Chan did not pay for the bill of the Karaoke Parlour that evening.

30.  During cross-examination, Mr. Chan is asked about why they need to have a meeting in view of the closing of the production line in coming long Lunar New Year holiday, and why they had to pick a karaoke parlour for such meeting.  Mr. Chan explains that being a sales person, he need to know whether the Factory could make the delivery on time.  Although there were regular meetings in the Factory to discuss the production schedule, there were sometimes simply too many staff members attending this sort of meetings, and so it was quite necessary for a smaller group to come together to discuss more specific matters outside these meetings.  When further questions are put to him, Mr. Chan says that it was sometimes necessary for them to hold these discussions in private to avoid the opprobrium of their respective supervisors.  Mr. Chan also says that in the Mainland, it was usual for them to discuss work-related matters in karaoke bars and restaurants.  Further, most places in the Mainland were already closed in view of the coming New Year holiday and so it was difficult to find other venues for their meeting.

31.  The result of the blood tests showed that the Deceased had been drinking heavily that evening.  In cross-examination, Mr. Chan is asked about how the Deceased could discuss business matters when he was so drunk, Mr. Chan simply says that the business discussion that evening was mainly between Mr. Lee and himself.

(ii)   Mr. Lee's evidence

32.  In his witness statement, Mr. Lee seemed to give an account which supports Mr. Chan's case and that Mr. Lee had specifically arranged a meeting in the Karaoke Parlour after the Annual Dinner to discuss business matters.  However in his oral testimony, his evidence about the purpose of the gathering is very different.

33.  According to Mr. Lee, near the end of the Annual Dinner, someone made a suggestion for them to stay behind for further entertainment as the night was still young.  Mr. Chan, Mr. Lee and the Deceased therefore agreed to go to the Karaoke Parlour for entertainment.  In other words, the spontaneous idea of visiting the Karaoke Parlour did not originate from himself.  As the gathering was not a pre-planned one, there was no fixed agenda for the discussion that evening.

34.  Mr. Lee had also given a number of statements to the Mainland Police after the accident.  According to these statements, the three of them went to the Karaoke Parlour for drinks and singing after the Annual Dinner.

35.  In another statement given to the loss adjustors dated 8 March 2008, Mr. Lee stated that the purpose of the gathering was for private entertainment and it was not a pre-planned function.  The venue was chosen by Mr. Chan himself.  He also mentioned that they had tried to engage some karaoke hostesses to sing with them.  However as the Lunar New Year holiday was approaching, there were not many hostesses still working that evening.  Further as he was not the supervisor of Mr. Chan and the Deceased, he had not instructed nor put any pressure on them to go to the Karaoke Parlour with him.  At the trial, Mr. Lee confirms that the contents of his statement to the loss adjustors are the truth.

36.  During their stay in the Karaoke Parlour, they talked about both work-related and personal matters.  In respect of the former, they talked about the recent turmoil in the Respondent and the trend in the pricing of the raw materials for the production line.  He also gave some advice to Mr. Chan and the Deceased as to how to secure their jobs in the Respondent. Although work-related matters were the main subjects of their conversations, Mr. Lee maintains that they went to the Karaoke Parlour for entertainment only.

37.  Mr. Lee recalls that he did not pay for the bill of the Karaoke Parlour.  If the meeting was for business purpose, he would have paid the bill and claimed reimbursement from the Respondent.

38.  As Mr. Lee had to drive, he did not drink a lot that evening.  He had to go back to Hong Kong that night.

39.  Before the accident, Mr. Lee had been working for the Respondent for about 14 years, and his employment was terminated by the Respondent after the accident.

40.  According to Mr. Lee, he admits responsibility to pay compensation to the Deceased's family but he does not have the means to do so.   When he is asked as to whether he would do anything to help Mr. Chan and the Deceased's dependants to get compensation, Mr. Lee replies that he only wants to tell the truth.

(iii)    Mr. Chu's evidence

41.  Mr. Chu testifies on behalf of the Respondent's case.  According to him, Mr. Lee, Mr. Chan and the Deceased had drunk a lot during the Annual Dinner.  Their faces were red and they were excited.  Near the end of the Dinner, Mr. Chan and the Deceased came over and told him that they were going to stay behind after the Dinner.  They had not mentioned that they were staying behind to discuss business matters.  Had they done so, Mr. Chu would have found out more about the meeting as there was cost implication involved.  Further as they were so drunk, Mr. Chu did not consider them suitable to discuss business matters under such condition.  As Mr. Chan and the Deceased were adults, he did not object for them to stay behind.

42.  In his observation, Mr. Lee, Mr. Chan and the Deceased were also friends themselves.

43.  As a matter of courtesy, Mr. Chu had consumed some alcohol in the Annual Dinner.  However, the quantity was small, maybe 1 to 2 glasses of alcoholic drink for the whole evening.

44.  According to Mr. Chu, Mr. Lee, Mr. Chan and the Deceased could not make any major decisions regarding their work.  Such kind of decisions need to be made by their supervisors.  In the opinion of Mr. Chu, it was unlikely for the staff members of the Sales Department to have any direct discussion with those of the Purchasing Department.  Firstly, there was a special staff responsible for the liaison and the follow-up work between the Factory and the sales team about the orders of the customers.  Secondly, there was a special computer programme to calculate the costs of the raw materials.  There were also staff members responsible for quoting the prices for the customers, and the staff members of the Sales Department could not determine the prices themselves.  In such circumstances, it was quite unnecessary for the members of the sales team to approach the Purchasing Department for the quotation of prices.

45.  Despite the turmoil in the Respondent, there was in fact expansion in the Sales Department.  According to Mr. Chu, both Mr. Chan and the Deceased were hardworking employees.

46.  The oral testimony of Ms. To and Mr. Fung does not add very much to the evidence already mentioned above.

(iv)   Findings on the disputed factual issues

47.  Having carefully considered the evidence, I find that: (i) the decision to go to the Karaoke Parlour was made on the spur of the moment; (ii) attending the Karaoke Parlour was for private and entertainment purposes only, and there was no specific agenda for the discussion in the gathering that evening; and (iii) Mr. Lee had not instructed Mr. Chan and the Deceased to go to the Karaoke Parlour with him and there was no pressure whatsoever for them to join Mr. Lee that evening.  As I see it, it is quite unnecessary for me to find whether Mr. Lee, Mr. Chan and the Deceased had drunk a lot during the Annual Dinner, as their soberness near the end of the Annual Dinner is quite irrelevant for the court in determining the liability issue in the present case.  In any event, I accept that they had drunk considerably and were quite excited near the end of the Annual Dinner, otherwise they would not have stayed behind for further entertainment that evening.

48.  In reaching the said conclusion, I find that the evidence of Mr. Lee is much more creditable.  Firstly, Mr. Lee's account about the purpose of the gathering that evening is supported by the more contemporaneous statements given by Mr. Lee to the Mainland authority and the loss adjustors shortly after the accident, the first statement being the one given to the Mainland Police only about 2 hours after the accident.  It is suggested by the Applicants' counsel in both Applications that Mr. Lee had fabricated his evidence in the previous statements. However, if Mr. Lee wished to exculpate himself from the criminal investigation relating to the identity of the driver at the time of the accident, lying about the purpose of his visit to the Karaoke Parlour would serve no useful purpose.  Hence, I accept that the contemporaneous documents contain a true account about the purpose of the karaoke visit.

49.  Secondly, Mr. Lee's version of events, as compared with that of Mr. Chan, does make much more sense.  The Annual Dinner was held on the last working day of the Lunar calendar year and the long holiday was due to start on the following day.  In such circumstances, there was simply no urgency for Mr. Lee to call for a special meeting after the Annual Dinner and late in the evening to discuss business matters.  In particular, it is common ground that: (i) there were regular liaison meetings in the Factory for the discussion on such sort of matters; (ii) all major decisions relating to the production line and the purchasing of raw materials need to be made by more senior staff members; and (iii) there were special staff members responsible for the quotation of prices and the liaison work between the production and the sales teams.  Further, by reason of the power struggle in the Respondent, Mr. Chu had asked the staff members of the sales teams to confirm all the communications with the production team in writing. In such circumstances, I cannot understand why they need to have an urgent meeting to discuss matters such as production schedule and they could only have the chance to confirm the discussion in writing after a long intervening holiday.  Hence, the gathering was more like a private social function for entertainment only.

50.  Thirdly, Mr. Lee, Mr. Chan and the Deceased had tried to engage Karaoke hostesses to accompany them in the Karaoke Parlour that evening.  If they had not done so, they would have been able to know that most of the Karaoke hostesses were not working that night in view of the coming holiday.  Mr. Chan himself also does not dispute such fact.  In my judgment, if the gathering was a special meeting to discuss business matters, there was simply no point to engage Karaoke hostesses in the first place, and the fact that such attempt was made shows that the gathering was much more of a personal nature.

51.  Fourthly, the blood tests conducted after the accident show that at least the Deceased had been drinking very heavily that evening.  If the gathering was a special meeting called by “Supervisor Lee” to discuss work-related matters, I do not believe that the Deceased would have been drinking so heavily that evening.

52.  Fifthly, if the gathering was a business meeting, then the choice of venue for the meeting was also odd.  If three of them were not planning to stay behind for some entertainment, they should have been keen to go home as soon as possible.  Although it might be the business culture in the Mainland to have business meetings in restaurants or karaoke parlours, I cannot understand why Mr. Lee, Mr. Chan and the Deceased could not have just stayed behind in the Hotel, even if there was no restaurant or coffee shop in the Hotel, for some further discussion, instead of taking the trouble of driving for half an hour to another venue for the discussion.  According to Mr. Chan, the purpose of the meeting was to discuss the production schedule after the New Year holiday with a view to avoid the confusion arising from the closure of the production line during the long holiday.  There was no urgency for the discussion on the other matters.  In such circumstances, whatever business discussion they might have that evening, which I do not accept it to be the case, the discussion should not have been a lengthy one.

53.  Sixthly, I have no reason to doubt Mr. Lee's evidence that he had not paid the bill of the Karaoke Parlour that evening.  If the gathering was for business purpose, I would expect Mr. Lee to have paid the bill which was not the case here.

54.  In a number of statements given to the Mainland Police from February to April 2008 and to the loss adjustors dated 8 March 2008, Mr. Lee claimed that the Deceased was the driver of the Car at the time of the accident.  According to these statements, Mr. Lee was the driver initially.  However as he himself was rather drunk and the Deceased indicated that he wanted to drive, he let the Deceased to drive the Car.  Mr. Lee accepts that such allegation is incorrect.  As confirmed by the result of the forensic examination conducted by the Mainland Police, Mr. Lee was the driver of the Car at the time of the accident.  Does such inconsistency affect the creditability of Mr. Lee's evidence?

55.  According to my observation, Mr. Lee wanted to exculpate himself from the criminal liability arising from the accident, in particular he might have to be detained in a foreign jurisdiction in the case of a conviction of a criminal charge, and that was why he denied that he was the driver at the material time.  Despite his attempt to evade criminal liability, I do not find that his account about the purpose of the gathering in the Karaoke Parlour was false.  In my judgment, if he intended to exculpate himself from criminal investigation, lying about the purpose of his visit to the Karaoke Parlour would serve no useful purpose.  On the contrary, had he told a lie and informed the Mainland Police that the gathering was a business meeting, it would help to exculpate himself by giving a picture that he was a responsible supervisor and the participants of the gathering had not been drinking so much that evening.  Yet Mr. Lee maintained that the gathering was for entertainment only.  Hence in my judgment, Mr. Lee's attempt to exculpate himself does not in any way affect the creditability of his evidence about the purpose of the gathering in the Karaoke Parlour.  Further, there is no incentive for Mr. Lee to lie in this court as this would not alter any of the criminal sanction or civil damages already awarded by the court in the Mainland against him due to the accident.

56.  After observing Mr. Lee in the witness box for some time, I actually find him to be a reliable witness. As he was the driver of the Car at the time of the accident, he has a strong sense of guilt against both Mr. Chan and the Deceased. He had destroyed the future of these two young men.  Blaming himself for the accident, I find that he has a very strong urge to tell the truth.  Further, as his account of events does make a lot of sense and is supported by the contents of his more contemporaneous statements, I accept his evidence about the purpose of the gathering as the truth.

57.  I agree that the contents of Mr. Lee's written witness statement made for the purpose of the trial seem to support Mr. Chan's case about the purpose of the gathering.  However as such witness statement was prepared at a much later stage with the assistance of Mr. Chan's legal advisers, I would certainly prefer to accept his earlier version of events given in the statements shortly after the accident.  Further, there are verbatim similarities between Mr. Chan's statement given to the Mainland Police on 22 May 2008 (see: part of the answer to question 3) and Mr. Lee's witness statement at the trial (see: paragraph 3).  I have reason to believe that the person who drafted Mr. Lee's witness statement just simply copied part of the earlier statement of Mr. Chan with a view to support Mr. Chan's claim.  These were certainly not words coming from Mr. Lee himself.  Hence, I have grave reservation about the reliability of Mr. Lee's written witness statement.

58.  According to witness statement of Mr. Chu, Mr. Chan and the Deceased came to him near the end of the Annual Dinner to inform him that they were going to stay behind “for some entertainment”, and he did urge them to go back together to Hong Kong with him after being informed of their plan of staying behind.  In the submission of Mr Yeung, counsel for Mr. Chan, such account was extremely implausible because it would leave a wrong impression to Mr. Chu, in particular the Respondent was in some kind of turmoil at the relevant time and both Mr. Chan and the Deceased were keen to secure their jobs in the Respondent.

59.  There is certainly some confusion in Mr. Chu's evidence in this regard.  In his oral testimony, Mr. Chu says that Mr. Chan and the Deceased had not told him the specific purpose for them staying behind, and he had not expressly urged them to go back to Hong Kong with him.  Despite such confusion in the evidence, I do accept that Mr. Chu is a reliable witness and what he tells the court in his oral testimony is the truth.  Obviously, Mr. Chu had left the Respondent unhappily in January 2009 and so there is no reason for him to lie in this court for the benefit of the Respondent's case.  Further, Mr. Chu's evidence is not, in my judgment, very relevant for the determination of the liability issue in the present case.  In fact, what Mr. Lee first said about the purpose of the gathering in the Karaoke Parlour is much more relevant.

60.  Despite the sympathy I have with Mr. Chan about his injuries, I do not find his evidence convincing based on the reasons given above.  Further, there is also one major inconsistency in his evidence.  According to the contents of his supplemental witness statement dated 6 October 2009, Mr. Chan stated that he personally went up to Mr. Chu near the end of the Annual Dinner and told Mr. Chu that he would stay behind to talk to Mr. Lee.  However in his oral testimony, Mr. Chan claims that only the Deceased went up to inform Mr. Chu about their plan to stay behind after the Annual Dinner.  This is an important piece of evidence as it relates to the purpose of the gathering that evening, and I cannot quite understand why Mr. Chan has made such a mistake here.  Despite the fact that he might be a hardworking employee, such inconsistency certainly undermines the creditability of his evidence.

61.  In his oral testimony, Mr. Chan seems to suggest that he did not have any direct communication with Mr. Lee about the purpose of gathering, and he was only informed by the Deceased that Mr. Lee wanted to have a business meeting that evening.  In other words, he was under some sort of belief that the gathering was a business one.  However, such important allegation has not appeared in any of Mr. Chan's previous statements.  This account of events, which cannot be refuted by the Deceased, is unusually convenient, and so I have grave doubt about the truthfulness of such allegation.

62.  In cross-examination, Mr. Chan has been asked as to why it was necessary to have a business meeting urgently in that evening when there were regular liaison meetings for the discussion on matters such as production schedule.  After being pressed for some logical reasons, Mr. Chan says for the first time that he and Mr. Lee need to communicate in private to avoid the opprobrium of their respective superiors.  However, such kind of business matters were not scandalous to the Respondent and there was simply no need for them to hold such discussion in private.  Further, as there was a standing instruction to Mr. Chan and the Deceased to record all the communications with the production team in writing, I cannot understand why they still wanted to have such kind of secret discussion.  Were they going to record the discussion in writing?

63.  As I see it, the secrecy of the conversation seems to support Mr. Lee's evidence that the gathering was in fact a private social function.  During the conversation, Mr. Lee might have given some advice to Mr. Chan and the Deceased as to how to secure their jobs at the time of turmoil.  They might also have touched upon some gossips in the Respondent.  Obviously, they wanted to keep such discussion in private, but that does not turn the gathering into a business meeting.

64.  I therefore find that, despite some work-related matters were the subjects of the conversations in the gathering, the purpose of the gathering in the Karaoke Parlour was for entertainment only and Mr. Lee had not instructed Mr. Chan and the Deceased to go to the Karaoke Parlour with him.  As agreed by Mr. Chan, if the gathering was for entertainment purpose, there was no pressure whatsoever for the Deceased and him to join Mr. Lee that evening.  The arrangement was also made extemporaneous.  I therefore proceed to determine the liability issue based on these facts, but before I do so, I will first deal with the law relating to cross-border travelling cases.

The law

65.  S. 5(1) of the Employees' Compensation Ordinance, Cap. 282 (“the Ordinance”) provides that:

“Subject to subsections (2) and (3), if in any employment, personal injury by accident arising out of and in the course of the employment is caused to an employee, his employer shall be liable to pay compensation in accordance with this Ordinance.”

66.  Under s. 30B of the Ordinance, an employee injured outside Hong Kong shall be entitled to compensation under the Ordinance where the contract of employment is entered into in Hong Kong with an employer who is a person carrying on business in Hong Kong.

67.  S. 5(4)(g) of the Ordinance further provides that:

“an accident to an employee shall be deemed to arise out of and in the course of his employment if it happens to the employee while he is, with the express or implied permission of his employer, travelling by any means of transport for the purposes of and in connection with his employment between Hong Kong and any place outside Hong Kong or between any place outside Hong Kong and any other such place.”

68.  In England, the leading authority on whether an employee is acting in the course of his employment whilst travelling to or from a place of work is Smith v Stages [1989] AC 928.  In Smith, the negligent driver and the injured passenger were based in Staffordshire in West Midlands.  They were instructed by their employers to go to Pembroke in the southwest of Wales to carry out a week's work which was expected to start at 8:00 am on Tuesday 23 August.  They travelled there on Monday 22 August, for which they were paid a day's wages and they were also paid a sum equivalent to the return rail fare.  The employers did not stipulate how they were to travel and they went in the negligent driver's car. In order to complete the work by the following Monday morning on 29 August, they worked for 13 hours on Saturday, all day on Sunday and from 9:00 pm on Sunday night until 8:30 am on the following morning.  They were paid for eight hours' travelling time for the return journey and were required to report for work in Staffordshire on Wednesday morning (i.e. 31 August).  In fact, the injured passenger and the negligent driver set off immediately in the negligent driver's car.  Later that morning, the car was in an accident and the injured passenger suffered serious head injuries.

69.  The trial judge found that the negligent driver was negligent.  However, as the negligent driver was not driving in the course of his employment, the claim against his employers was dismissed.  The Court of Appeal allowed the appeal and held that the negligent driver was driving in the course of employment, a decision which was upheld by the House of Lords.

70.  Lord Lowry, with whom the other Law Lords agreed, formulated a “paramount rule” as follows:

“an employee travelling on the highway will be acting in the course of his employment if, any only if, he is at the material time going about his employer's business. One must not confuse the duty to turn up for one's work with the concept of already being ‘on duty' while travelling to it.” [at. p. 955G]

Lord Lowry then went on to illustrate the application of this rule by formulating the following 6 propositions:

“1. An employee travelling from his ordinary residence to his regular place of work, whatever the means of transport and even if it is provided by the employer, is not on duty and is not acting in the course of his employment, but, if he is obliged by his contract of service to use the employer's transport, he will normally, in the absence if an express condition to the contrary, be regarded as acting in the course of his employment while doing do.

2. Travelling in the employer's time between workplaces (one of which may be the regular workplace) or in the course of a peripatetic occupation, whether accompanied by goods or tools or simply in order to reach a succession of workplaces (as an inspector of gas metres might do), will be in the course of the employment.

3. Receipt of wages (though not receipt of a travelling allowance) will indicate that the employee is travelling in the employer's time and for his benefit and is acting in the course of his employment, and in such a case the fact that the employee may have discretion as to the mode and time of travelling will not take the journey out of the course of his employment.

4. An employee travelling in the employer's time from his ordinary residence to a workplace other than his regular workplace or in the course of a peripatetic occupation or to the scene of an emergency (such as a fire, an accident or a mechanical breakdown of plant) will be acting in the course of his employment.

5. A deviation from or interruption of a journey undertaken in the course of employment (unless the deviation or interruption is merely incidental to the journey) will for the time being (which may include an overnight interruption) take the employee out of the course of his employment.

6. Return journeys are to be treated on the same footing as outward journeys.

All the foregoing propositions are subject to any express arrangements between the employer and the employee or those representing his interests.  They are not, I would add, intended to define the position of salaried employees, with regard to whom the touchstone of payment made in the employer's time is not generally significant.” [at pp. 955H-956F]

71.  Smith was considered by the Hong Kong Court of Appeal in Hsu Shu Chiao v Lung Cheong Toys Ltd. [2002] 1 HKC 479.  In that case, an employee was engaged by a Hong Kong company to work in Dongguan during the week with accommodation provided.  The employer provided transportation for that employee on Monday morning to take him from Shenzhen Railway Station to Dongguan, and in the afternoon on Saturday to take him from Dongguan to Shenzhen to catch the train to Hong Kong.  If that employee worked late and missed the employer's bus, he would arrange his own transport to Shenzhen and be reimbursed the cost by the employer.  On the day in question, he worked overtime on a Saturday and hired a taxi to go from Dongguan to Shenzhen to meet his girlfriend, but was killed in a road accident in the suburbs of Shenzhen.

72.  In the claim for employees' compensation, the Court of Appeal held that the deceased employee was killed in the course of his employment since the accident occurred while the deceased employee was travelling for the purpose of and in connection with his employment between a place outside Hong Kong and any other such place.

73.  In the judgment of the Court of Appeal, Cheung JA said the following:

“27. … … … In my view, upon arriving in Shenzhen, his presence in the Mainland was for all practical purpose on account of the employment and on the employer's time. … … …

28. In Smith v Stages, Lord Goff, on the facts of that case, found that an employee was required to make the journey in order to make himself available for work ie he was employed to make the journey, likewise for his return journey. I would also respectfully adopt such an approach here and hold that [the deceased employee] was employed to make the journey in order to reach and leave his work station in Donggaun. [The deceased employee] was, of course, not paid for the time spent on the journey, but this cannot be a decisive factor for a salaried worker in considering whether he is in the course of employment: see Smith v Stage.” [at p. 486D-G]

74.  In commenting on the provisions in s. 5(4)(g), Cheung JA said:

“37. This section extends the course of employment to an employee who travels outside Hong Kong so long as the travel is with the permission of the employer and for the purposes of and in connection with his employment. The phrase ‘for the purposes of and in connection with his employment' clearly covers situations not considered to be ‘in the course of employment', otherwise there is no need to use these words. These words must be wider than ‘in the course of employment'. They must be intended to cover situations like, for example, the present case where an employee may have difficulties in establishing his journey to the overseas destiny to be ‘in the course of employment' in view of the stricture imposed by the decided cases.

38. I would respectfully adopt the purposive approach of interpretation said by this court in Check Chor Ching v Wik Far East [1991] 2 HKLR 224 and Tan Hua Ning v Tam Wah Sung [1999] 3 HKC 490. In Tan Hua Ning this court further held that it was for the employee to prove that at the time of the accident he was travelling ‘for the purposes of and in connection with this employment'. Further, so long as he was travelling for that purpose, it does not matter if the travel entails another or other purposes as well. … … …” [at pp. 488G-489B]

75.  One of the issues that the Court of Appeal had to tackle is whether a cross-border employee does remain continuously in the course of employment from the moment he crosses the border to the Mainland until the moment he returns to Hong Kong.  In this regard, the Court of Appeal found that the case was analogous to that of Paterson Costain & Press (Overseas) [1979] 2 Lloyd's Rep. 204.  In Paterson, the employee was required by his contract to work and live in Iran.  The employee left for a holiday in Kuwait, but he was injured in Iran on the return journey back to his place of work. The English Court of Appeal held that upon the employee's return to Iran, he was to be considered in the particular circumstances of the case to be in the course of employment, and so the accident did occur in the course of his employment.  According to the dicta of Lord Denning M.R., when the employee got off the aircraft in Iran, he was “virtually thenceforward in the continuous employment of [his employer]” (at p. 206).

76.  In Hsu Shu Chiao, Cheung JA found that the situation of the deceased employee in that case was analogous to that of the employee in Paterson, and the learned judge therefore applied the case in support of his decision.

77.  In Hsu Shu Chiao, it was argued that the deceased employee had deviated from the journey as he was to meet his girlfriend in a hotel in Shenzhen that night.  Such argument was rejected by the Court of Appeal.  It was held that it made no difference that the deceased employee had arranged to meet his girlfriend because the taxi route did not deviate from the normal route taken by the employer's bus.  According to the Court of Appeal, the focus should not be what the deceased employee intended to do that night, but on the fact that Shenzhen was the place in the Mainland where the deceased employee's course of employment began and ended.  He remained in the course of employment whilst en route to Shenzhen until he left Shenzhen for Hong Kong.

78.  However, the Court of Appeal recognised that there are limits to the wide proposition:

“31. Likewise, there must be a limit to [the deceased employee's] course of employment, eg a visit to the cinema at night while he was in Dongguan. As Ormrod LJ observed, a little commonsense is required in such a case. In Smith v Stage, Lord Goff stated that how one distinguishes the travelling cases in which a man is acting in the course of his employment from those in which he does not, depend on the circumstances of each case. In this case, [the deceased's employee] was entitled by his contract to go from Dongguan to Shenzhen on Saturday after work. His journey from Donggun to Shenzhen must be within the course of his employment. A return journey from work is recognised to be on the same footing as an journey to work.” [at p. 487E-F]

79.  Another local decision involving cross-border employment, though not a travelling case, is Li Hoi Shuen v Man Ming Engineering Trading Co. Ltd. [2006] 1 HKLRD 84.  In this case, the employee was employed to work as an air-conditioning technician in the city of Jieying in the Mainland, where he supervised short-term labourers from out of the province to work on air-conditioning projects.  The employee was either provided with hotel accommodation or rented his own accommodation for which his employer reimbursed him.  In August 2000, the employee entered into a tenancy to rent a three-storey building in Jieying as a warehouse for storing company equipment.  In early April 2001, the employer sent the employee to work on a particular project in Jieying and the employee recruited 2 out of province workers to assist him.  Although the employer suggested the employee to rent a hotel, the latter decided to reside in the warehouse with the 2 co-workers to lower the employer's costs.  The employer knew about such arrangement.  On 22 April 2001, the 2 co-workers were unhappy with the employee's criticism of their work and they beat the employee to death whilst he was asleep.

80.  The father of the deceased employee brought an action for negligence against the employer and one of the issues was whether the deceased employee was murdered in the course of his employment.  Deputy Judge A. To, as he then was, answered such question in the negative, but the learned judge held that the employer was in breach of its duty of care to provide a safe accommodation for the deceased employee.

81.  The learned judge said the following in respect of the dicta of Cheung JA in Hsu Shu Chiao:

“33. ... ... ... It is implicit from this passage [in Hsu Shu Chiao] that a cross-border employee does not remain continuously in the course of employment from the moment he crosses the border to the Mainland until the moment he returns to Hong Kong. ... ... ... If a short visit to the cinema at night, ie outside the normal duty hours, constitutes a break in the course of employment, there is no reason why breaks involving longer periods of absence from duty cannot constitute breaks in the course of employment. There can be other breaks in the course of employment of a cross-border employee, for example, when he visits other places of entertainment at night, or when he pays visits to his Mainland relatives or takes pleasure trips within the Mainland during holidays. If these can constitute breaks in the course of employment, there is no justification for the view that when an employee clocks off work he is still in the course of employment merely because he is in the Mainland. I think the scenario Cheung JA had in mind in para. 27 of his judgment was that a cross-border employee ceases to be in the course of employment when he engages in his own affairs after clocking off work but resumes to be in the course of employment when he embarks on his homeward journey in the Mainland.

34. I think what was decided in Hsu Shu Chiao ... ... ... was that when considering cases of a cross-border employee travelling for the purposes of and in connection with employment between a place outside Hong Kong and any other such places, the court must bear in mind the new social dimension which takes account of cross-border employment situation. Whether such travelling is in the course of employment is a question of fact depending on all the circumstances of the particular case. The case has not laid down any new test to be applied in answering that question. The test remains whether at the material time the employment continues to run its course. ... ... ...

35.       In my view, whether an employee is in the course of employment is a question of fact.  The test is simply whether at the material time the employment continues to run its course.  Prima facie, an employee is in the course of employment during his duty hours and ceases to be in the course of employment when his duty hours are over or when he clocks off work until he resumes duty on the following day.  The situation may be more complicated in the case of an employee on overseas duty or a cross-border employee.  But, the test whether such an employee is in the course of employment after his duty hours is the same.  This question may be answered by considering whether the employee has the freedom to go where he pleases and do what he pleases, whether the employer is concerned with how the employee disported himself during the off-duty hours or whether he was required to go and stay at a particular place in the interim period for the employer's purpose such as on standby duty or on call. ... ... ...” [at pp. 102B-103C]

82.  Although Li Hoi Shuen was a case concerning a claim for common law negligence, the dicta of the learned judge on what falls within the course of employment are, in my judgment, also relevant for the court in deciding whether an accident happened in the course of employment for the purpose of a claim for employees' compensation under the Ordinance.

Legal analysis

83.  Having set out the law, I now turn to analyse the facts of the present case.  As I see it, the Respondent's arguments are based on two levels.  Firstly, as it was not compulsory for the staff members of the Hong Kong Office to attend the Annual Dinner held in Shenzhen and that attending the Annual Dinner was not incidental to the employment of Mr. Chan and the Deceased, the journey to and back from Shenzhen for the purpose of attending the Annual Dinner was not in the course of their employment.  Secondly, even if attending the Annual Dinner was by itself within the course of employment, by not taking the transportation arranged by the Respondent for going back to the border and embarking upon a separate journey for entertainment in the Karaoke Parlour, there was a break in the course of employment of Mr. Chan and the Deceased or there was a deviation from the return journey, and as a result the Respondent is not liable to pay employees' compensation to them.  I would deal with these arguments in turn.

(i)   Was attending the Annual Dinner incidental to the employment of Mr. Chan and the Deceased?

84.  In support of his submission that attending the Annual Dinner was not incidental to the employment of Mr. Chan and the Deceased, Mr. Li, counsel for the Respondent, has cited the case of R v National Insurance Commissioner, ex parte Michael [1977] 2 All ER 420 with an attempt to compare the Annual Dinner in the present case with the sports activity in that particular case.

85.  In Michael, the English Court of Appeal had to consider whether a police officer selected to play for his force in a match against another police force while he was off duty, and who sustained leg injury during the match, sustained the injury in the course of his employment. The officer was expected by his superiors to use his skill in football for the benefit of the police force, but was not compelled to do so.  Playing might help his promotion prospects, and if he did not play those prospects might be hindered.  The Court of Appeal held that, although the officer's superiors expected him to play in the football team, playing in the team was not part of his work as a police officer and was not incidental to that work.  Hence, it was no part of the officer's employment to participate in the match.

86.  Despite such authority, I reject Mr. Li's argument for the following reasons.  Firstly, it is clear that Mr. Chan and the Deceased went to the Respondent's factory in Dongguan for business before they departed to the Hotel for the Annual Dinner.  The factory visit was certainly part of the duties of Mr. Chan and the Deceased, and so the trip from the Respondent's Hong Kong Office in Kwun Tong to the factory in Dongguan was a travel from one work place to another and should be considered as falling within the course of employment.

87.  Secondly, it was the policy of the Respondent that if a staff member did not attend the Annual Dinner, he had to stay in the Office to work.  In the case that the employee was attending the Annual Dinner, the Respondent would pay for the cost of the dinner and reimburse the employee of the transportation cost for the journey between the border and the Office or his home.  Hence in such circumstances, attending the Annual Dinner or staying in the Office to work were both recognised by the Respondent as authorised modes of work, and so both of them should be treated as part of the work of Mr. Chan and the Deceased.

88.  Thirdly, the facts in Michael are quite distinguishable from those in the present case.  In Michael, the duty of the injured police constable was to maintain law and order.  In such circumstances, it is quite impossible to say that playing football with other institutions was part of his duty to enforce law and order.  But in the present case, it is common ground that the Annual Dinner, though it was a social function, provided a good opportunity for the Respondent's staff members in the Office to meet and socialize with the people who worked in the Factory.  Better communications and working relationships between and amongst the Respondent's employees could be achieved.  The purpose of the Annual Dinner was also for employee appreciation and moral boosting, and so the Annual Dinner was clearly of benefit to the Respondent.  In such circumstances, I accept that the attendance by Mr. Chan and the Deceased at the Annual Dinner was something incidental to their work.

89.  Mr. Yeung, counsel for Mr. Chan, has also helpfully referred me to a number of decisions made by the various tribunals adjudging employees' compensation claims in Canada, including Workers' Compensation Appeals Tribunal Decision No. 298/92 [1992] CanLII 5734 (ON W.S.I.A.T.), Workers' Compensation Appeals Tribunal Decision No. 264/94 [1994] CanLII 7821 (ON W.S.I.A.T.) and Workers' Compensation Appeals Tribunal Decision No. 295/08 [2008] CanLII 1499 (ON W.S.I.A.T.).  In all of these cases, there was either a dinner, picnic or barbeque event organised by the employer for the benefit of the employees and to foster better communications and working relationships between and amongst employees.  Based on the workers' compensation law which had similar provisions as s. 5(1) of the Ordinance, the tribunals held that all the employees suffered the injuries in the course of the employment at the time of the relevant accidents.  According to these decisions, it did not matter that the function was a social event or took place after ordinary working hours.  What were important were that: (1) the function benefitted the work carried out by the injured workers and hence the employer; and (ii) the function or activity was under the control of the employer.

90.  I would adopt the same approach.  Further, although it was not strictly compulsory for the staff members of the Office to attend the Annual Dinner, there was some pressure for them to do so in order to show their loyalty to the Respondent.  Coupled with the facts that the social activities in the Annual Dinner would benefit the work carried out by Mr. Chan and the Deceased and hence the Respondent and the Annual Dinner was under the control of the Respondent, I have no doubt in my mind that attending the Annual Dinner itself was incidental to the employment of Mr. Chan and the Deceased, and that the journey to and from the venue in Shenzhen should be treated as falling within the course of their employment.

(ii)   Was there a break in the course of employment or a deviation from the return journey?

91.  However, the problem in the present case is that Mr. Chan and the Deceased decided not to take the transport provided by the Respondent to go back to Hong Kong after the Annual Dinner and chose to stay behind for further entertainment in the Karaoke Parlour.  In such circumstances, did it constitute a break in the course of employment or a deviation from the return journey?

92.  In my judgment, the answer must be yes.  As I have mentioned above, I have already found that: (i) the purpose of the visit to the Karaoke Parlour was for private entertainment; (ii) the decision to visit the Karaoke Parlour was made extemporaneous without any specific agenda in mind; and (iii) Mr. Lee had not instructed Mr. Chan and the Deceased to go to the Karaoke Parlour with him.   Based on such findings, it was certainly a break in the course of employment for Mr. Chan and the Deceased to visit such place of entertainment after the Annual Dinner.  As set out in the dicta of Cheung JA in Hsu Shi Chiao and Deputy Judge To in Li Hoi Shuen, even if Mr. Chan and the Deceased were required to work in the Mainland, a visit to the cinema or other places of entertainment at night would be a break in the course of employment.  Hence, the Respondent is not liable to pay any employees' compensation to the Applicants in respect of the accident which occurred later in that evening.

93.  As I see it, there are a number of special features in the present case which make it so different from the facts of the previous cases.  Firstly, unlike many cross-border employment cases where the employers just reimbursed the employees of the costs of travelling on public transport, the Respondent actually provided its own transport for use by Mr. Chan and the Deceased for the return journey back to the border after the Annual Dinner.  The evidence also shows that the employees were not free to take any modes of transport they liked.  Only if the Factory Vehicles were not available for use, the employees should then take other appropriate modes of transport.

94.  Secondly, unlike the Hsu Shi Chiao case where the deceased employee had to “deviate” from his planned journey because of his overtime work, the deviation in the present case had nothing to do with the work of Mr. Chan and the Deceased or in connection with a purpose which benefitted the Respondent.

95.  Thirdly, the deviation from the planned journey had considerably increased the risk of the return journey.  Instead of taking the Factory Vehicles driven by alcohol-free drivers (the 7-seater Vehicle driven by Mr. Chu would take the other staff members who were living in the Hong Kong Island), Mr. Chan and the Deceased were travelling in the Car driven by Mr. Lee who had been consuming alcohol both in the Annual Dinner and in the Karaoke Parlour.  Although the blood tests show that the alcohol level of Mr. Lee was relatively low as compared with those of Mr. Chan and the Deceased, one cannot ignore the fact that he had been consuming alcohol the whole evening.  Further, the time interval between the planned journey and the deviated journey is also a relevant factor.  Mr. Lee might be tired when he was driving in the early hours of the morning.  Further, the street might not be safe and the risk of encountering robbery or other kinds of criminal activities would be much higher after midnight.  All these factors would gravely increase the risk of the return journey.

96.  The Respondent provided the Factory Vehicles driven by alcohol-free drivers to take the employees to the border, it shows that the Respondent was concerned about the safety of the employees who had to travel back to Hong Kong after the Annual Dinner.  However, Mr. Chan and the Deceased decided to embark upon a separate journey to the Karaoke Parlour.  Without knowing when and how they would travel back to the border, the Respondent simply had no control over the safety of the “return journey”.  In such circumstances, there is no reason why the journey from the Karaoke Parlour to the border should fall within the course of employment of both Mr. Chan and the Deceased.

97.  In support of the claims, Mr. Yeung also seeks to rely on the artificial extension of the meaning of “the course of the employment” as laid down in s. 5(4)(g) of the Ordinance, which provides that an accident is deemed to fall within the course of the employment if it happens to the employee while he is, with the express or implied permission of his employer, travelling by any means of transport for the purposes of and in connection with his employment between Hong Kong and any place outside Hong Kong.  Despite such provision, Mr. Yeung concedes that if the mode of transport taken by the employee is one expressly or impliedly rejected by the employer, then any accident during the journey is not in the course of employment. However, Mr. Yeung submits that so long as the journey to and return from a place outside Hong Kong is with the express or implied permission of the employer, the means of transport taken by the employee is irrelevant.  Further, as there is no evidence to show that travelling back to Hong Kong in the Car was not expressly or impliedly not permitted by the Respondent, Mr. Yeung says that the Applicants can rely on s. 5(4)(g).

98.  I disagree.  According to my construction of s. 5(4)(g), the employee can travel on any means of transport.  However for that to be covered by the section, the employer must expressly or impliedly permit that mode of transport.  In most of the cases where the employer does not provide his own transport and just reimburses the employee of the transportation cost, then whatever means of transport taken by the employee, the court can readily accept that there is implied permission on the part of the employer.  However, the situation is very different if the employer provides his own transport for the employee concerned.  If the employee does not take the transport provided by the employer, the court must examine the facts to see whether there is implied permission on the part of the employer for the employee to take other alternative mode of transport.

99.  For the normal business trips to the Mainland, the Respondent's practice was that an employee should only take other mode of transport if the Factory Vehicles were not available.   Hence even in normal trips, it is very hard for the court to accept that there was a blanket permission on the part of the Respondent for the employees to take any means of transport.  Further, one should focus on the arrangement that evening. Specific transport was provided to Mr. Chan and the Deceased for the journey, and such mode of transport was relatively safe as the Factory Vehicles were driven by alcohol-free drivers.  If they decided not to take such transport, the Respondent simply had no knowledge on what kind of alternative transport that would ultimately be taken by them and the Respondent did not have any control over the safety of the alternative transport.  In such circumstances, I cannot accept that the Respondent had given implied permission for Mr. Chan and the Deceased to travel in the Car driven by Mr. Lee as part of the return journey of such cross-border trip.

100.  Mr. Yeung also submits that as Mr. Lee had been authorised, either expressly or impliedly, to use the Car for matters in connection with the business of the Respondent, the Respondent had given implied permission for Mr. Chan and the Deceased to travel in Mr. Lee's Car for the return journey.  I also reject such argument.  It was one thing, if the Factory Vehicles were not available or just for the sake of convenience, for Mr. Lee to drive his colleagues to the border after work, it was quite another matter for Mr. Lee to drive his colleagues to a karaoke parlour or a night club for entertainment late in the night.  The latter purpose had nothing to do with the business of the Respondent, and it cannot be said that the travelling was for the purposes or in connection with the employment within the meaning of s. 5(4)(g).  Hence even if the Respondent reimbursed Mr. Lee for the toll fees for the weekly journey between the border and the Factory, which was nothing more than just an employee's benefit, the court still has to look at the purpose of a particular journey to see whether the Respondent had given express or implied permission for certain particular employees to travel in Mr. Lee's Car.

101.  Assuming for the purpose of argument that Mr. Chu knew that Mr. Lee, Mr. Chan and the Deceased were going to stay behind for some entertainment, which I do not accept it to be the case, Mr. Chu was not made aware of what entertainment they would participate in, nor was Mr. Chu aware of when, or how, the three of them would return to Hong Kong.  To say that the Respondent had expressly or impliedly given permission for Mr. Chan and the Deceased to travel in Mr. Lee's Car, under any time or any condition, for the return journey of the trip cannot simply be right.

102.  In cross-examination, Mr. Chu is being asked if he knew that Mr. Chan and the Deceased would travel back to the border after the gathering in Mr. Lee's Car, whether he would object to such arrangement. Mr. Chu replies in the negative.  But in my judgment, such answer cannot advance the Applicants' case any further.  Mr. Chan and the Deceased had informed Mr. Chu that they were going to stay behind.  Mr. Chu had no objection, but that does not mean that the social gathering would, by reason of such indication of Mr. Chu, become an event in the course of the employment. As confirmed by Mr. Chu in his evidence, in his eyes, there was already a break in the employment when Mr. Chan and the Deceased stayed behind for their private business, and so Mr. Chu could not prescribe the mode of transport for their return journey.  In fact, what Mr. Chan and the Deceased did after work was not a matter of concern to him.

103.  A further argument is advanced on behalf of the Applicants' claims.  Assuming that there was a deviation from the course of their employment by paying a visit to the Karaoke Parlour, once they embarked upon the travelling back to Hong Kong, they resumed to be in the course of employment.  Further, the accident occurred at the Shajing section of the Guang-Shen Highway, had Mr. Chan and the Deceased taken the transport provided by the Respondent to go to the border, it would have passed through the same route, and hence according to the Applicants, there was no deviation in the return journey.  In other words, provided that the homeward trip remains necessary and is on the same route, it does not matter how long the break in the course of employment lasts.

104.  In support of his submission, Mr. Yeung is also relying on a hypothetical scenario.  An employee attends a conference on behalf of his employer in London and flies there with the return air ticket bought by his employer.  After the conference, he stays behind for 1 or 2 days for his private business.  He then embarks upon his return journey to Hong Kong on the same airline and during the flight, he meets an accident.  In such case, Mr. Yeung says that the accident still falls within the course of his employment.

105.  However, I do not accept that such argument can benefit the Applicants' case.  In considering whether there is a deviation in the journey or the so-called “the same route argument”, the court would certainly consider a number of factors, for example: (i) whether the employee has refused to take the transport provided by the employer or the mode of transport prescribed by the employer; (ii) the time gap between the planned journey and the deviated journey; (iii) whether the deviation has affected the risk of the return journey or has altered the nature of the return journey; (iv) whether the deviation from the planned journey is caused by the employer or the work performing by the employee at the material time; and (v) whether the employer knows about the details of the deviated journey.  The list is not exhaustive.

106.  To go back to the hypothetical scenario.  To stay behind for 1 or 2 days in London may just mean that the employee takes the next flight back to Hong Kong.  The time interval between the planned journey and the deviated journey is small, and the risk of the return journey is more or less the same.  As the ticket is purchased by the employer, the employer probably knows about the details of the return journey.  In such circumstances, there is some room to say that the return journey still falls within the course of the employment.  However, if the employee stays behind for further one week or even a month, the situation may not be that clear.  To take another example, the employer provides a private jet for the employee to attend the conference in London.  Just before the private jet departs from London, the employee informs his employer that he is going to stay behind for some private matters. In view of the coming holiday, the employee does not tell his employer how and when the employee would return to Hong Kong.  Assuming the employee takes a commercial flight 3 or 4 days later back to Hong Kong and meets an accident in the course of the flight, does it fall within the course of the employment? The answer is probably in the negative.

107.  To illustrate my point, I want to rely on another hypothetical scenario.  A Hong Kong employee is required to work in Dongguan in the Mainland, and the employer does not provide any transport for him to go back to Hong Kong.  After finishing his work, he is supposed to take the 9:00 pm public bus back to the border.  However, he decides to buy something for himself in a nearby convenient store and takes the 9:30 pm bus instead.  He then meets an accident in the return bus journey.  In such circumstances, I would say that the accident still falls within the course of employment.  Obviously, such decision is based on the following considerations: (i) the employer does not provide any transport for the employee to go back to the border; (ii) the time gap between the planned journey and the actual journey is small; and (iii) taking 9:30 pm bus does not significantly increase the risk of the return journey.

108.  I then introduce some variations in the scenario.  The first one is that the employer provides a bus for the employee to leave at 9:00 pm.  In order to buy something for himself in the nearby convenient store, the employee declines to take the company bus to the border. Without telling the employer of his plan, he takes the 9:30 pm public bus to the border and meets an accident in the return bus journey.  The second one is that no transport is provided by the employer.  Instead of taking the 9:00 pm public bus to the border, he goes for shopping in a nearby store for a few hours.  He then takes the 1:00 am public bus to the border.  There is a bus robbery and the employee is killed.  The third one is that, instead of taking the 9:00 pm public bus to the border, the employee decides to stay behind and to play golf with his friends for a few days.  He then returns to Hong Kong 5 days later by taking the same 9:00 pm bus.  He then meets an accident in the return journey.  In these three varied scenarios, assuming that the actual return journey is on the same route of the planned journey, do the accidents fall within the course of the employment?

109.  In my judgment, the answer would probably be no for all three scenarios.  In the first case, the employee does not take the transport provided by the employer, and the employer is not aware as to how and when the employee would return to Hong Kong.  In the second case, the deviation increases the risk of the return journey considerably.  A delay of a few hours may be significant in the circumstances of the case, as the street may not be safe after midnight in certain places in the Mainland.  The third case is that there is a significant time gap between the planned journey and the deviated journey.

110.  In our present case, Mr. Chan and the Deceased did not take the transport provided by the Respondent in travelling to the border.  They also did not inform the Respondent as to how and when they would travel back to Hong Kong.  Further, by not taking the Factory Vehicles back to the border and travelling in the Car driven by Mr. Lee, who had consumed alcohol for some time, in the early hours of the morning, this significantly increased the risk of the return journey, and the Respondent simply had no control over the safety of the alternative transport taken by Mr. Chan and the Deceased.  In such circumstances, even if the accident happened on the same route of the planned return journey, the accident still fell outside the course of the employment. 

111.  Although I do find that the purpose of the visit to the Karaoke Parlour was for private entertainment only, I accept the evidence of Mr. Lee that most of the conversations that evening were related to their work.  In particular, there was some kind of turmoil in the Respondent and Mr. Chan and the Deceased might have asked for some advice as to how to secure their jobs.  However, that by itself did not make the gathering something incidental to the employment of Mr. Chan and the Deceased.  It is quite common for office workers to go for a drink in the “happy hour” in a pub after work.  Because of their relationship, one can expect that most of the topics of the conversations in the pub are work-related.  They may discuss something like personnel problems or their prospects for promotion.  They may also discuss how to solve a particular problem encountered in the course of their work.  But that does not make the gathering in the pub an event in the course of the employment.  On the other hand, it is possible for the employer to arrange a breakfast meeting to discuss certain business matters.  After discussing the business matters, the participants of the meeting may spend a lot of time chatting on other personal matters.  Nevertheless, this is still an event in the course of the employment.  In my judgment, the purpose of the event and whether there is some kind of compulsion for the employees to attend the event are the most important considerations, not the actual contents of the discussion.  Hence although something general relating to their work were discussed in the gathering, that did not make the visit to the Karaoke Parlour something incidental to the employment of Mr. Chan and the Deceased.

112.  Further, despite given ample opportunities in the cross-examination, both Mr. Chan and Mr. Lee are not able to elaborate upon the details of the discussion in the gathering that evening.  In such circumstances, such discussion could only have been of a very general nature, for example, about the recent turmoil in the Respondent, rather than anything specific such as the details of the delivery schedule of a particular order.  This also supports that the gathering was in fact a private social function.

113.  Subsequent to the accident, the Respondent submitted three Forms 2 (Notice by Employer of the Death of an Employee or of an Accident to an Employee Resulting in Death or Incapacity) in respect of Mr. Chan, the Deceased and Mr. Lee to the Labour Department as required by the provisions in the Ordinance.  In all these forms signed by Mr. Chu dated 14 February 2008, the Respondent stated that the accident occurred in the course of their work.  The Applicants therefore rely on such “admission” to support their claims for employees' compensation.

114.  According to Mr. Chu, all the forms were filled in by the Respondent's Accounts Manager Ms. Ann Kwok.  Ms. Kwok explained to him that the attendance of Mr. Chan, the Deceased and Mr. Lee at the Annual Dinner was part of their employment and they had the accident during the return journey, and so she considered that the accident occurred in the course of their employment.  Mr. Chu then signed on the forms.

115.  However, whether the court should attach any weight to the admission in a Form 2 depends very much on the facts of each individual case.  If the dispute about liability is very much a factual issue, then such kind of admission can assist the court to resolve the factual differences between the parties.  But the situation is very different if the dispute is a legal one.  Whilst Ms. Kwok was right in saying that attending the Annual Dinner was part of the employment, whether there was a break in the course of employment when the said employees did not take the transport provided by the Respondent back to the border and paid a visit to the Karaoke Parlour is a difficult issue of law.  As both Mr. Chu and Ms. Kwok were not legally-qualified persons, I do not think that the court should attach any weight to the so-called “admission” contained in the Forms 2.

116.  In reaching the conclusion that the accident did not fall within the course of the employment, it is not necessary for me to consider the other decisions relied upon by Mr. Li, including Fong Fung Ying v Attorney General [1991] 2 HKLR 133, Po Kwong Mui v Cheoy Lee Shipyards Ltd. [1993] HKDCLR 1, Kong Hon Hung v Yuen Hing (China) Transportation Ltd., unreported, DCEC No.150/1998 (decision of HH Judge Carlson on 5 January 2001), Chan Yau Wei v Chuen Kee Seafood Restaurant Group Ltd., unreported, DCEC No. 111/2001 (decision of Deputy Judge J Lam, as he then was, on 29 May 2004) and Xu Huaxian v Chan Hok Lik formerly t/a Wai Kon Sin Yu & Anr., unreported, DCEC No. 922/2006 (decision of Deputy Judge S.T. Poon, as he then was, on 28 May 2007).  The accidents in all these cases occurred within Hong Kong, and so they are not so relevant in the present context when the court has to deal with a cross-border travelling case.

The new social dimension

117.  In Hsu Shu Chiao, Cheung JA made the observation that the court should take into account “the new social dimension” in cross-border employment cases in construing the statutory provisions in the Ordinance:

“26. It has to be borne in mind that many of the travelling cases decided in the past were in the context of a local environment of an employee travelling to and from his work. The courts were not concerned with cross-border travelling required by an employee in order to reach his place of work, such as many Hong Kong residents are doing these days. In deciding this case, there is no escape from this new social dimension, which takes account of the nature of a modern employment relationship and the practical consideration that, while a person injured on a public road in Hong Kong may be covered by compulsory third party insurance, there is no certainty that the same protection is afforded to him in another jurisdiction. The question of insurance coverage is, of course, not the basis in which a case is to be decided. But this backdrop of a new social environment is how one should consider the case when applying the words of a statute first introduced in Hong Kong in 1953 which in turn was based on the English Workmen's Compensation Acts introduced in some bygone era. … … … The cases decided in the past are to be used as guidance to the approach to be adopted, rather than as providing an answer in a particular case.” [at pp. 485G-486B]

118.  In Li Hoi Shuen, counsel for the deceased employee sought to rely on the said dicta of Cheung JA to establish the proposition that in the light of the new social dimension, an employee engaged in cross-border employment is in the course of employment from the moment he crosses the border until he returns to the jurisdiction.  Such argument was rejected by Deputy Judge To.  The learned judge took the view that the said dicta of Cheung JA does not have “the effect of changing the law as to what falls within the course of employment and what falls outside” (see: paragraph 33 of the judgment).  Further, even Cheung JA agreed that there would be a limit to the course of employment if, for example, the employee pays a visit to cinema at night, and so the dicta do not support the wide proposition advanced on behalf of the deceased employee.

119.  For myself, I agree with Cheung JA that the court should take into account the new social dimension in cross-border employment cases in deciding what falls within the course of employment and what falls outside.  Apart from the issue of third party motor insurance, employees working outside Hong Kong may face all sorts of different problems. It may be the business culture in other places that a sales employee has to entertain the clients of his employer in karaoke parlours or even night-clubs, and they can only discuss business matters in such kind of social gatherings. Practicably and for the benefit of his work, the employee does not have a choice and he has to attend such kind of social gatherings.  There may also be cases where the employer just asks the employee to take whatever public transport that is most convenient, and the employer is not concerned about the safety of the transportation concerned.  In such circumstances, I agree that the court should, for the protection of the employee, give a liberal interpretation as to what is incidental to the course of employment and what is not.

120.  But the present case is very different.  The visit to the Karaoke Parlour was purely a social gathering.  The plan was made extemporaneous, and there was no pressure whatsoever for Mr. Chan and the Deceased to attend the gathering.  For the safety of the employees of the Hong Kong Office, the Respondent had arranged the Factory Vehicles driven by alcohol-free drivers to take them to the border, and yet Mr. Chan and the Deceased did not take the transport provided and embarked upon a separate journey for a social gathering.  In my judgment, even taking into account the consideration of the new social dimension and all our sympathy with Mr. Chan and the Deceased, it is simply impossible for the court to extend the protection under the Ordinance to cover their claims.

121.  Based on the aforesaid, despite all the sympathy I have with Mr. Chan and the Deceased, I do not find that the car accident occurred in the course of their employment with the Respondent.  I therefore dismiss the claims in both Applications.  I also make an order nisi that the costs of the respective Applications be to the Respondent with certificate for counsel, which shall be made absolute 14 days after the date of the handing down of this Judgment.

122.  Finally, I must express my gratitude to all the counsel for the assistance that they have rendered to this court.