LI ZHONG v. TO CHI KO AND OTHERS

DCEC 595/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 595 OF 2008

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IN THE MATTER OF AN APPLICATION

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DECISION

1.  Li, the Applicant, claims employees’ compensation against To, the 1^st Respondent, Hung, the 2^nd Respondent and Richman Properties, the 3^rd Respondent.  They were sued as the employer or employers of Li.  The alleged injury at work at their house on 29 August 2007.

2.  Li applied for specific discovery of documents against Hung and Richman Properties.  The hearing was before me on 6 February 2009.  I handed down my decision on 9 February 2009 whereby the application was dismissed with costs in any event (the Decision).  Li now applies for leave to appeal.

Leave to appeal

3.  The question of whether leave to appeal is required arose when Li’s solicitors sought to file the application.  Mr Lam described that Li applied for leave out of prudence.  Ms Cindy Sin for Hung and Richman Properties was apparently content to argue the application on the basis that leave is required.  Notwithstanding that, I believe I should not leave it at that.  After all, Mr Lam did make helpful submissions on this question.

4.  Section 23 of the Employees’ Compensation Ordinance, Cap.282 (ECO) provides that:

“(1) Subject to the provisions of this section and of section 13, an appeal shall lie to the Court of Appeal from any order of the Court.

(2)   Except with the leave of the Court or of the Court of Appeal (which shall not be granted unless in the opinion of the Court of Appeal some substantial question of law is involved in the appeal) no appeal shall lie if the amount in dispute is less than $1,000.” (emphasis added)

5.  However, section 63 of the District Court Ordinance, Cap.336 (DCO) provides that:

“(1) Subject to subsection (3), an appeal can, with leave of the judge or the Court of Appeal, be made to the Court of Appeal from every judgment, order or decision of a judge in any civil cause or matter.” (emphasis added)

6.  By virtue of section 21(1) of the ECO:

“(1) Save as is provided in this Ordinance and any rules made thereunder, the District Court shall, upon or in connection with any question to be investigated or determined thereunder, have all the powers and jurisdictions exercisable by the District Court in or in connection with civil actions in such Court in the like manner as if the Court had by the District Court Ordinance (Cap.336) been empowered to determine all claims for compensation under this Ordinance whatever the amount involved and the law, rules and practice relating to such civil actions and to the enforcement of judgments and orders of the Court shall mutatis mutandis apply.” (emphasis added)

7.  There is an apparent conflict between section 23 of the ECO and section 63 of the DCO.

8.  The only case where this question was really decided was譚耀輝 v Aberdeen Marina Holdings Ltd, CACV 167/2005 (3/11/2005).  The question there was whether leave to appeal against an order as to costs of a summons in an employees’ compensation case is required.  The court of appeal was faced with an apparent conflict between section 23 of the ECO and section 14(3)(e) of the High Court Ordinance, Cap.4 (HCO).  Section 14(3)(e) provides that no appeal shall lie without the leave of the court from an order made with the parties’ consent or relating only to costs which are by law left to the court’s discretion.  Literally, section 14(3)(e) is wide enough to cover any court and tribunal.

9.  In concluding that leave was required in 譚耀輝, Le Pichon, JA said (at para.8):

“It is possible to reconcile the two seemingly conflicting provisions by construing the words “any order of the Court” in section 23 of the ECO as referring to orders made under the substantive provisions of the ECO whether awarding compensation or determining questions of law arising out of the ECO but not costs orders which fall under “ the law, rules and practice” of the District Court in or in connection with civil actions in that court which by virtue of the provisions of section 21(1) of the ECO apply to compensation claims.  Section 23(2) supports such a reading.  The words within parenthesis tend to indicate that “any order of the court” would not include costs orders since a costs order would not involve substantive questions of law but the exercise of the judge’s discretion.” (emphasis added)

10.  The ECO does not provide for any application for specific discovery in the employees’ compensation proceedings.  It follows that such an application and an order made therein could only be made under the rules and practice of this court that were made applicable by virtue of section 21(1).  An appeal from such an order will be governed by section 63 of the DCO rather than section 23 of the ECO.  Leave to appeal is thus required.

11.  It would appear that similar concern about the requirement of leave should arise mainly in respect of orders made in interlocutory applications.  In line with the above reasoning, it would appear that in employees’ compensation cases, one should be concerned about whether the order or decision is made under the provisions of the ECO or by resorting to the rules and practice of the District Court in any civil actions (which are made applicable by section 21), whenever intending to lodge an appeal from the order.

12.  Mr Lam suggested that for instance, an order made in an application to compel the employer to produce the insurance policy under section 44A of the ECO is subject to appeal under section 23 and therefore without leave.  It would also appear that orders of the court under various specific provisions of the Employees’ Compensation (Rules of Court) Rules, for instance, sections 22 to 24 regarding joinder, being orders not made under the rules of the District Court as in any civil actions, are also subject to appeal under section 23 without leave.

13.  For the purpose of this application, it perhaps suffices for me to agree with Mr Lam that leave is required in the present case.

Principles

14.  Both parties referred to the principles in Smith v Cosworth Casting Processes Ltd [1997] 1 WLR 1538 and Ma Bik Yung v Ko Chuen, HCMP 4303/1999 (8 September 1999).  The question is whether the intended appeal has a realistic prospect of success or whether it raises an issue where the law requires clarifying in the interest of the public.

15.  With effect from 2 April 2009, section 63A of the DCO provides that leave to appeal shall not be granted unless the appeal has a reasonable prospect of success; or there is some other reason in the interests of justice why the appeal should be heard.

16.  The present application was taken out prior to and heard after the taking effect of the above provision.  But I do not consider that applying either test will lead to a different conclusion in the present application.

Merits

17.  The principles and my considerations in the application for specific discovery were stated in the Decision.  I do not repeat here.  Of the 4 documents specifically requested, I ruled that 2 of them could hardly be relevant (paras.9-12 of the Decision).  I do not think that the appeal is intended to reverse that.

18.  The remaining 2 classes of documents in question are the registers of the shareholders and directors (from 2006 up to the present) of the BVI company, Vanco.  Vanco is a corporate shareholder and director of another company which in turn is a corporate shareholder and director of Richman Properties.  Richard Properties is the registered owner of the house in question.

19.  The draft notice of appeal attached to the summons proposes 5 grounds of appeal.  In so many words, they really relate to my consideration of the relevance of the remaining 2 classes of documents being sought and whether discretion should have been exercised in favour of an order.

20.  Mr Lam seemed to suggest that my decision was not in line with my acceptance during hearing that these documents are relevant.  He also suggested that I have limited the issue of relevance without full regard to the Peruvian Quano test of relevance.

21.  It is unfortunate that my exchange with parties, perhaps in the course of which playing devil’s advocate too, with a view to testing the arguments would be viewed as my conclusion.  I believe it is clear if one considers the transcript of the hearing as a whole rather than any part of it in isolation (see e.g., pages 15D-16D; 16Q-17G; 22O-23E; 24H-N; 27P-28H).  The very fact was that I reserved my decision at the end of the hearing.

22.  Notwithstanding the submissions of Mr Lam during this hearing, I still do not see the issue that he has in mind could be anything other than the credibility of Hung and therefore Richman Properties in saying that they do not know Li (para.16 of the Decision).

23.  I do not argue against the logical thinking that if they are contradicted by a name like To in the documents, which Mr Lam hopes to find, Hung and Richmond Properties may be lying about not knowing To.  But Mr Lam submitted that this is relevant because this relates to the major issue of whether there was any employment relationship between Li and Hung and Richman Properties.  I can only understand the logic proposed to mean that if they are contradicted, then they in fact know To, then they are incredible and therefore they have no or no credible answer to Li’s allegation about the employer-employee relationship with them.  I cannot agree.

24.  Even if the documents sought are relevant in the above way, the court still has to consider if the specific discovery ought to be ordered.  This is the court’s discretion under O.24, r.8.  The question is whether the specific discovery is necessary for the fair disposal of the cause or matter or for saving costs.  I exercised the discretion against an order for the reasons stated the Decision (at para.18).  I am not convinced that the appellate court would lightly interfere with the exercise of the discretion in the circumstances of this case.

Conclusion

25.  I therefore refuse the application for leave to appeal.  Costs of this application be to Hung and Richman Properties in any event to be taxed, if not agreed, with certificate for counsel.  Li’s own costs be subject to legal aid taxation.