CHEN RUIHONG AND ANOTHER v. HOI SHING HONG INVESTMENT LTD AND ANOTHER

DCEC 498/2021

[2022] HKDC 1474

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 498 OF 2021

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IN THE MATTER OF AN APPLICATION BETWEEN

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J U D G M E N T

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Introduction

1.  This is an assessment of compensation claim under sections 6 and 6A of the Employees’ Compensation Ordinance, Cap 282 (“ECO”) in respect of the subject fatal accident occurred on 24 October 2019 and apportionment of the compensation under section 6A of the ECO.

Background

2.  According to the Amended Application refiled on 26 October 2022, the deceased was employed by the 1^st respondent (R1) as a barge worker on the date of the accident. When he was handling goods at a barge moored near the loading area of no.8 Pier, Stonecutter Island, his head was struck by a heavy load of goods causing his death.

3.  This Application was taken out by Madam Chen, the wife of the deceased, for herself and on behalf of other eligible family members on 9 March 2021.

4.  As R1 has failed to comply with the “unless order” dated 18 November 2021 made by His Honour Judge Harold Leong to file and serve any Answer, interlocutory judgment on liability was entered against R1 on 9 February 2022, leaving compensation to be assessed. Besides, R1 did not file any List of Earnings and List of Documents, nor adduce any witness statements. Mr Choy for R1 attended the trial with no instructions to make any submissions or conduct any examination of witnesses on behalf of R1.

5.  There is no policy of insurance known to be in force at the time of the accident that covered the deceased as a barge worker. On 28 September 2022, Her Honour Judge Levy granted leave to the Employees Compensation Assistance Fund Board to join as the 2^nd respondent (“R2”) in these proceedings to contest quantum.

Legal Principles

6.  The only issue of this case is about the amount of earnings of the deceased and the relevant statutory provisions on calculating earnings are sections 11(1) & (2) of ECO:

“(1) Subject to this section, for the purposes of this Ordinance the monthly earnings of an employee at the time of the accident shall be the earnings:

(a) for the month immediately preceding the date of the accident; or

(b) computed in such manner as is best calculated to give the rates per month at which the employee was being remunerated during the previous 12 months if he has been so long employed by the same employer, but, if not, then for any lesser period during which he has been employed by the same employer,

whichever calculation is more favourable to the employee.”

(2) Where by reason of the shortness of the time during which an employee has been in the employment of his employer or of the casual nature of the employment, or of the terms of employment, it is impracticable to compute the rate of remuneration of such employee at the date of the accident, regard may be had to the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of similar earning capacity in the same grade employed at the same work by the same employer, or if there is no such person so employed, by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district.”

7.  According to the majority view of the Court of Appeal in Or Wing Ming v Ho Bing Chi ([2008] 4 HKLRD 337, 341-342, 346-348 at §§4-8, 38-46), the term “any lesser period” under section 11(1)(b) includes a period of less than one month. Section 11(1)(b) may apply irrespective of the shortness of the period of employment, be it less than one month, as long as there is sufficient evidence to support a computation of monthly wage.

8.  The date of birth of the deceased on 13 April 1979 is not in dispute. Thus, he was 40 years of age on the date of the fatal accident. According to s.6(1)(b) ECO:

“in the case of an employee of or over 40 years of age but under 56 years of age at the time of accident, a lump sum equal to 60 months’ earnings or 60 times the amount specified in the second column of the Sixth Schedule shown opposite section 6(1)(b) specified in the first column of that Schedule, whichever is the less”

9.  As of the date of the accident, the amount specified in the second column of the Sixth Schedule for s.6(1)(b) was HK$30,530.00 (26/4/2019 version of ECO).

10.  According to s.6(5) ECO:

“Where death results from the injury, reimbursement of the reasonable expenses of the funeral of the deceased employee and the reasonable expenses of medical attendance on the deceased employee, not exceeding in all the sum of the amount specified in the second column of the Sixth Schedule shown opposite section 6(5) specified in the first column of that Schedule, shall be paid by the employer to any person who has paid the expenses.”

11.  As of the date of the accident, the amount specified in the second column of the Sixth Schedule for s.6(5) was HK$87,330.00 (26/4/2019 version of ECO).

12.  There are two witnesses in this trial, namely Madam Chen (陈瑞红), wife of the deceased and Mr To (陶紀均), a colleague of the deceased. Besides, there are certain documentary evidence of which the admissibility is in dispute. Such evidence was produced at trial provisionally on de bene esse basis.

To’s Evidence

13.  The Applicant’s counsel has summarised To’s evidence as follows:

(a) According to To, the deceased was employed as a rigger by R1 in September 2019 but he did not hold a valid certificate of training for carrying out cargo handling work on board vessel, ie the so-called “marine blue card”.

(b) As clarified by To in the hearing, riggers (i.e., 勾仔) might work either on land or on the barge. Their work nature on land or on the barge is the same and their duties and work hours are also identical. The only difference is that for those working on land, they did not need to hold a “marine blue card”, but they had to take charge of the additional duty of checking cargo numbers (i.e. 睇頭). Those without a “marine blue card” can get on the barge if they were not conducting rigging works. At all material times, the deceased was assigned to work as勾仔 and睇頭. To was assigned as 勾仔.

(c) The deceased worked on the deck of the same barge as To did on the day of the accident. To saw the deceased lying inside the hold of the barge immediately after the accident. To further explained under cross-examination that he was in fact the first worker who attended the deceased after the accident. He did not give any police statement because R1 requested all workers to leave the barge immediately after the accident, and only by nomination assigned a few workers of its own choice to give evidence later.

(d) To was told by Fai that the deceased’s daily wage is HK$4,000.00. He further said that in fact every one earned HK$4,000.00, as shown in the note from the WhatsApp group. He believed Fai told him that the deceased was also paid HK$4,000.00 per day to show that he did not earn any hidden commission by eating up part of the deceased’s income, given the three of them knew each other.

(e) To was also asked whether he had seen the deceased being paid. He affirmed in the positive. He said all the workers would be paid at the same time in cash at the end of the working session. They would usually sit together in the manner of a small meeting and that he had personally saw the deceased received his daily wage in cash.

(f) He was asked further whether he had seen the deceased counting the cash. He said all the workers (including himself) would immediately count the cash and would presumably voice out if the sum was wrong. The deceased who usually sit next to him also did the same (count the cash upon receipt). He confirmed he did saw it.

(g) He was further asked how many times he had seen the deceased paid his daily wage. He said whenever they worked on the same barge, they would be paid together. He recalled about 8 to10 times.

(h) To alleged that he also earned HK$4,000.00 daily and worked for 20 odd days per month, earning HK$80,000.00 to HK$90,000.00 monthly, or up to HK$110,000.00 to HK$120,000.00 when he worked almost every day during peak seasons.

14.  According to To’s witness statement, his knowledge of the deceased’s daily wages was hearsay only. To stated that he was told by Ah Fai (the contractor who employed the deceased) that the daily wages of the deceased was HK$4,000.00. When To gave evidence in court, he said for the first time that he actually saw Ah Fai pay the deceased’s wages in cash after work and they counted the cash together. He added that he saw the deceased receiving wages and counting the money for more than 10 times. It is rather inconceivable that he would omit handing out of wages to the deceased in his own statement if he has seen such incidents for so many times. Therefore, I reject his evidence that he did witness Ah Fai paying the deceased in cash.

15.  As regards To’s hearsay evidence of the amount of the deceased’s wages, it is odd and unusual for a contractor to disclose the amount of wages of the deceased to other co-workers. In the circumstances, I find such hearsay evidence unreliable and reject To’s evidence in this regard.

Madam Chen’s Evidence

16.  The Applicant’s counsel summarised Madam Chen’s evidence as per her witness statement as follows:

(a) She came to Hong Kong from Mainland China after she was married to the deceased in or about 2016, living with the deceased’s parents at the flat owned by the deceased’s father. The deceased had worked in the maritime industry in mainland China before they were married, and worked as a construction worker in Hong Kong thereafter. Since September 2019, the deceased worked in the maritime industry again.

(b) The deceased earned about HK$1,400.00 per day and worked about 25 days per month when he worked as a construction worker. His earnings increased after he worked in the maritime industry in September 2019.

(c) The deceased was the only breadwinner of the family. He paid for household expenses at about HK$13,455.00 monthly, the Madam Chen’s expenses at about HK$5,000.00 monthly, the daughter’s expenses at about HK$1,800.00 monthly, his parents’ expenses at about HK$3,000.00 monthly, and red packets to his parents totalling about HK$4,000.00 per year. His financial provisions to the family were thus about HK$23,588.33 per month, not including his own expenses yet.

(d) After the accident, Madam Chen was told by Fei Jai (later confirmed to be contractor Mok Yue Fai or “Ah Fai”) that the deceased earned a daily wage of HK$4,000.00.

(e) She had also been told by To that To’s daily wage was HK$4,000.00, and that his monthly earnings were ranging from about HK$80,000.00 to HK$120,000.00.

17.  Madam Chen stated in her own statement that she was not very clear about the deceased’s monthly earnings (“我其實不太清楚死者每月收入”). She only learnt from Ah Fai (the contractor) and To that her late husband’s daily wages were HK$4,000.00. Besides, she also deduced the deceased’s monthly income from the total household expenditure that it would be not less than HK$23,588.33 per month.

18.  However, Madam Chen was unable to produce the following documents for inspection pursuant to the specific discovery order of Her Honour Judge Levy made on 28 September 2022, including:

(a) copy employment contracts and work records of the deceased;

(b) copy Tax Returns and Notices of Assessment of Salary Tax/Profit Tax of the deceased for the fiscal years 2018/2019 and 2019/2020;

(c) copy MPF statements of the deceased for the period of one year prior to the date of accident up to the date of the accident;

(d) copy bank passbook(s) / statement(s) of all bank account(s) held in the sole name of the deceased and in the joint names with others for the period of one year before the alleged accident up to the date of the accident;

(e) copy deceased’s valid certificate to work on a vessel

19.  Madam Chen’s evidence of her late husband’s daily wages being HK$4,000.00 is contradicted by her statement to the police dated 7 July 2020 in which she stated that the monthly income of her late husband was HK$20,000.00 on average. When Madam Chen was cross-examined on such discrepancy, her explanation was that she did say “HK$20,000.00 to HK$30,000.00” but the police officer just wrote down HK$20,000.00 instead and refused to amend the figure to “HK$20,000.00 to HK$30,000.00” after the statement was completed. Madam Chen further explained that she was referring to the earnings of his late husband’s previous occupation as a construction worker, not the job with R1. She also explained in court that she was still much disturbed by the demise of her late husband when she was giving the statement to the police. She added that she was in deep grievance in the first two years after the accident and she would burst into tears whenever she talked about his death.

20.  If Madam Chen did tell the police that her late husband was earning HK$20,000.00-HK$30,000.00 each month in his previous job of construction worker, such amount is nonetheless inconsistent with her own statement dated 1 August 2022 given for these proceedings in which she stated the deceased’s then daily wages were HK$1,400.00 and he was working 25 days each month, ie amounting to HK$35,000.00 a month.

21.  When reading her statement to the police in the context, it is rather difficult to accept Madam Chen’s evidence that she only referred to the level of earnings of her late husband’s previous job, as she was all along giving information about the job with R1 in the paragraph immediately preceding the mention of average monthly income of HK$20,000.00.

22.  Besides, Madam Chen’s evidence of the income of her late husband’s previous job of construction worker is inconsistent with objective evidence. According to the deceased former employers’ “Employer’s Return of Remuneration and Pensions for the Year from 1 April 2018 to 31 March 2019” by Cheung Ming Engineering Company, his total wages were HK$145,710.00. Another former employer Genuine Treasure Access and Scaffolding Limited has been employing the deceased from 30 October 2018 to 5 January 2019. Total wages in the sum of $5,355 were paid to the deceased. Adding up the total wages from the above two were HK$151,065.00 for the whole year, or around HK$12,589.00 per month. The above discrepancy seems to suggest that Madam Chen has attempted to exaggerate the past income level of her late husband.

23.  Ms Tjia, counsel for the Applicant submitted that the return from P & S ENG CO. LIMITED for the period from 1 April 2019 to 23 October 2019 totalling HK$202,800.00 corroborated Madam Chen’s evidence that her late husband’s previous monthly earnings as a construction worker was about HK$35,000.00.

24.  However, P & S was not an employer of the deceased. The subject form 56M is the “Notification of Remuneration Paid to Persons Other Than Employees”. Accordingly, the deceased was engaged in the capacity of a contractor and the sum of HK$202,800.00 appearing at item 7 was subcontracting fees, not wages paid to the deceased. Therefore, I disagree with Ms Tjia that such document was in support of the alleged monthly earnings of the deceased as a construction worker.

25.  Madam Chen testified in court that her late husband gave her HK$20,000.00 on 17 October 2019 after he began to work for R1, which doubled the sum he used to give her in the middle of the month. Although Madam Chen was not sure whether her late husband had worked for a full month in this new job with R1, To did say under cross-examination that the deceased began to work for R1 since early to mid-September 2019.

26.  Madam Chen did add in her recent supplemental statement dated 24 October 2022 that her late husband began to work for R1 since end of September 2019. However, she could not remember the exact date. That was the first time she mentioned the job began at the end of September. She mentioned her late husband began the job with R1 in “September” instead of “end of September” in her previous statement to the police dated 7 July 2020 and in her first statement taken by her solicitors dated 1 August 2022. Madam Chen has not explained how she was able to clarify the commencement day was at the end of September in her recent supplemental statement but she was unsure of the exact date. I prefer the evidence of To’s evidence in this regard.

27.  Therefore, by 17 October 2019 when the deceased gave Madam Chen the said sum of HK$20,000.00, he should have worked for R1 for at least one full month.

28.  According to Madam Chen’s statement to the police, her late husband was the sole breadwinner of the family and his income was stable, without financial difficulties, debts or any bad habits. In light of the absence of spending on bad habits and no evidence of saving habits of the deceased, it is reasonable to infer that the amount of income kept by the deceased for his personal spending would be moderate, probably around the same amount of Madam Chen’s personal monthly allowance of HK$5,000.00. It follows that the monthly earnings of the deceased consisting of the household money of HK$20,000.00 paid to Madam Chen on 17 October 2019 and his personal spending say HK$5,000.00 are consistent with the amount of earnings of HK$20,000.00 to HK$30,000.00 that Madam Chen told the police.

29.  Regarding the evidence of the deceased’s monthly earnings deduced from family expenditure, Madam Chen only listed the household expenditure in or around September 2019 in her two recent statements in 2022 without any supporting evidence. I do not accept her estimation as reliable and accurate.

Disputed Documents

30.  Items 37-39 and 41-49 of the Assessment Bundle are not agreed. In particular, the authenticity and admissibility of the following two items are contested by R2 and they are adduced provisionally at trial on de bene esse basis:

(a) Item 40[132]: “Copy of notebook record written by the deceased” and

(b) Item 51[175-180]: “Photos”.

31.  According to Madam Chen, both items 40 and 51 are photographs retrieved from the photo album of her late husband’s mobile phone. Some photographs were screenshots of a work related WhatsApp group in the phone. To confirmed that he had seen the same in the WhatsApp group.

32.  The most controversial documents are photographs of two handwritten notes at [132] and [179]. The handwritten note at [132] appears to set out the breakdown of wages of different types of workers and expenses totalling HK$174,800.00. The date of making this document was unknown, but the photograph of this document was sent to the WhatsApp group on 10 October 2019.

33.  The other handwritten note at [179] looks like a table of distribution of work including the deceased who was apparently assigned to work as a “勾仔” and “睇頭” for the barge “萬達”. The Applicant’s counsel regarded these handwritten notes as contemporaneous records corroborating the evidence given by the two witnesses in relation to the work and earnings of the deceased.

34.  The handwritings of these two notes seem to belong to two different persons. There is no evidence that the deceased was the author of any one of these notes. Although Madam Chen has testified as to how she captured the above photographs at [132] ＆ [179], and To has confirmed and explained some of their contents, the identities of the makers of these two pieces of notes and the purpose of writing these notes still remain unknown after all. I agree with the submissions of R2 that the note at [132] could also be a quotation or an invoice prepared by a contractor.

35.  In view of the vagueness of these disputed documents with low evidential value, though I allow all such disputed document be adduced as hearsay evidence, I give no weight on such documents. Thus, these documents do not assist the Applicant’s case any further and have no effect on my above analysis of the evidence given by the two witnesses.

36.  By the same token, I attach no weight on the unsigned Form 2 prepared by R1 without any evidence from the maker to verify its contents.

Compensation for Loss of Earnings under Section 6(1)

37.  There is no dispute that the deceased was 40 years of age at the time of the accident. According to section 6(1)(b) of the ECO, the amount of compensation payable to the members of the deceased’s family shall be a lump sum equal to 60 months’ earnings or 60 times the amount specified in the second column of the Sixth Schedule shown opposite section 6(1)(b) specified in the first column of that schedule, whichever is the less.

38.  As I have found that the monthly earnings of the deceased were HK$25,000.00, less than the statutory maximum of HK$30,530.00. The award of compensation under Section 6(1)(b) shall thus be calculated based on the lesser sum of HK$25,000.00 as follows:

HK$25,000.00 × 60 = HK$1,500,000.00

Compensation for Funeral Expenses under Section 6(5)

39.  According to section 6(5) of the ECO, reimbursement of reasonable expenses of the funeral of the deceased employee, not exceeding in all the sum of the amount specified in the second column of the Sixth Schedule shown opposite section 6(5) specified in the first column of that schedule, shall be paid by the employer to any person who has paid the expenses.

40.  The said amount specified in the corresponding column of the prevailing Sixth Schedule at the time of the accident stood at HK$87,330.00.

41.  The court has in the past allowed funeral expenses including costs for a tombstone, undertakers, funeral ceremonies and a resting place for the urn, air fares and hotel costs (Lee Wai Lien v Dragages et Travaux Publics and Penta-Ocean Construction Co Ltd t/a Dragages-Penta Joint Venture (a firm), HCPI 596/1999, unreported, 20/9/2000, at §§56-63).

42.  The funeral expenses paid by Madam Chen were well supported by receipts and not challenged by R2. I accept them as reasonably incurred. As the total amount claimed under this head has exceeded the statutory limit, an award in the sum of HK$87,330.00 is made accordingly.

Conclusion

43.  For the above reasons, the total compensation payable by R1 to the Applicant is assessed at HK$1,587,330.00 (HK$1,500,000 + HK$87,330.00) plus interest.

Apportionment

44.  The deceased was survived by Madam Chen, his daughter (aged 4 at present), his father and mother.

45.  According to section 6A of the ECO, the compensation shall be payable only to eligible members of the family and apportioned in the manner set out in the Seventh Schedule.

46.  Paragraph 6 of the Seventh Schedule of the ECO stipulates that 45% of the compensation shall be paid to the spouse, 45% of the compensation shall be paid to the child, and the remaining 10% thereof shall be paid to each of the parents in equal amounts.

47.  Since Madam Chen has paid the funeral expenses, the whole sum of compensation under section 6(5) shall be awarded to her alone.

48.  The award of compensation to each of the Applicants shall be apportioned as follows:

	Section 6(1)	Section 6(5)
Madam Chen	HK$675,000.00 (45%)	HK$87,330.00
Daughter (Cheng Ka Yam)	HK$675,000.00 (45%)	/
Father (Cheng Ho Kit)	HK$75,000.00 (5%)	/
Mother (Hung King Fa)	HK$75,000.00 (5%)	/
Total:	HK$1,500,000.00	HK$87,330.00

49.  As the daughter is a minor, the said sum of HK$675,000.00 awarded to her shall remain in court and be invested, applied or otherwise dealt with for her benefit at the Registrar’s absolute discretion, and such sum with interests accrued shall be paid out to her upon her attaining the age of 18 years old and upon her application for payment out with proof of attaining such age, or until further applications by Madam Chen or her guardians who are at liberty to apply for future payment out of the whole or part of said sum whether by summons or letter to the Registrar.

Interest

50.  The interest on the total sum of compensation is awarded at half judgment rate from the date of the accident (24 October 2019) to the date of judgment, and thereafter at the judgment rate until payment.

Costs

51.  There is no dispute that costs of the Applicant and R2 in this application shall be paid by R1. Such costs shall be taxed if not agreed with certificate for both counsel, and that the Applicant’s own costs to be taxed in accordance with the Legal Aid Regulations (Cap 91A).

52.  As regards the costs between the Applicant and R2, I agree with Ms Leong’s submissions that R2’s intervention is helpful in determining the issues in question without postponing or prolonging the proceedings. In the circumstances, there are no factors which warrant an order for R2 to pay the Applicant’s costs. Therefore, I make no order as to costs as between the Applicant and R2.

53.  The above costs order is made on nisi basis and it shall become absolute after 14 days from the date hereof, unless parties make any applications to vary it within such time.

54.  Lastly, I thank Ms Tjia and Ms Leong for their kind assistance rendered to this court.