YIM CHUN FAI v. CHAN KWOK KEUNG t/a K K CHAN DECORATION & ENGINEERING CO

DCEC417/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES COMPENSATION CASE NO. 417 OF 2007

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Judgment

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Background

1. The issue in this trial is liability.  The Applicant is aged 67.  This claim arose as a result of an alleged fracture of the top rung of a wooden ladder and of a plank on which the Applicant Mr YIM (“Yim”) was standing while he was dismantlinig parts of a cement ceiling inside the change room of a temple 省善真堂 (“the Temple”) in Kowloon Tong in the afternoon of the 9th April 2006, with Yim falling onto the ground fracturing his left calcaneum (heel).  He was hospitalised for 4 days, thereafter needing a walking stick, physiotherapy, and treatment from the mainland and a bone-setter between January and April 2007, and from a private orthopoedic surgeon Dr Ko in late April 2007. 

2. In relation to residual disability, Yim says he now walks with a slight limp, is unable to walk for more than 30 minutes without suffering from intense pain, can no longer climb a ladder, and basically unable to find replacement work because of his age.  He claims against the Respondent pursuant to the usual headings of s.9, s.10 and s.10A of the Employees Compensation Ordinance Cap.282.  Permanent loss of earning capacity has been agreed by the parties at 15%, the period of sick leave under s.10 has been agreed at 24 months, and s.10A expenses have been agreed at $7,114.00. The parties have agreed, provided there is liability, that the only figure to be determined by the Court is the amount of pre-accident monthly income, and this will determine the ultimate amounts of compensation under s.9 and s.10. 

3. Yim says he was at all times Respondent Chan’s “day employee at $500 per day”, working on average 6 days a week.  Chan, on the other hand, says that Yim was only an independent contractor working for him when required, and at prices per job, and so there cannot be any compensation under the Ordinance.

Applicant’s case

4. Yim adopted his witness statement as testimony in-chief, adding the following:

(a)  Chan had been employing him mainly as a cement dismantler since 2002,

(b)  Chan would telephone him with instructions as to date, work location, and nature of work for each project, including this one about which Chan instructed him 5 days before the accident,

(c)  Chan would come around towards the end of each working day to check on progress and the quality of work,

(d)  Chan paid him a daily wage of $500, and his income was $13,000 per month,

(e)  payments were in cash, usually made on the 15th and 30th of each month, but he had not banked any part of his wages,

(f)   he would sign on a receipt for payment, which Chan would retain, but he himself had no copy,

(g)  Chan had kept a record of his ID card and address,

(h)  Chan provided him with all the equipment for his work, which Chan would bring to the work sites in the back of his car, and workers would take whatever was needed.  As to the ladders on the date of the accident, Yim had taken from the Temple’s storeroom, but he was not sure whether they belonged to the Temple or to Chan,

(i)  As to the day of the accident being a Sunday, he said Chan had only asked whether he would be working so as to keep a record, but had not prohibited him from working that day.

Under cross-examination, he said:

(j)   He had never been given any statutory holidays, or any annual leave days,

(k)  He had never been credited with MPF, nor had he asked Chan about it,

(l)   He had never been to Chan’s company address, nor does he know whether Chan had a secretary or supervisors (or foremen) working under him,

(m) He had never taken any sick leave, or been told about sick leave,

(n)  He had never “punched any card” (work arrival and departure records),

(o)  The several people he had heard of, who had been working for or with Chan, he barely knew about them other than the fact that they were Chan’s sub-contractors, i.e. they were not colleagues or co-employees by Chan,

(p)  Despite saying he had been earning $13,000 x 12 months = $156,000 a year, he had never paid any income tax.  As to whether he had declared income for tax purposes, under the Court’s warning against self-incrimination he refused to answer this question,

(q)  He had never received any bonuses from Chan, nor had Chan ever hosted any Chinese New Year banquets for any workers,

(r)  Despite saying he had been working for Chan for 4 years, other than this Temple, the rest of the time he was working at one other temple called Yuan Xuan Xue Yuan (圓玄學院), but the project or projects there had not lasted the whole of the 4 years, yet he was unable to say which other places Chan had employed him to work.  It was only after repeated questioning that he gave one other place “in Yaumatei” but he could not say what address.  When reminded that he had earlier said he was working at圓玄學院for 3 months, he said Chan had sent him to Yaumatei as a one-off job, and that was with a man called “Ming Zai (明仔)”, but as to where he alighted to the place to work, and which street it was, he could not give any answer.

(s)  Regarding his assertion that Chan as his employer had provided him with all equipment, including ladders, when the photographs showed that the ladder or ladders used by Yim had painted on them the Temple’s name of “省善真堂”, not the Respondent Chan’s name, Yim was unable to explain.  Furthermore, Yim agreed that after the accident, he had left a bag of tools in the room, which his son subsequently came to take back for him, and at least the electric drill had belonged to him, not to Chan.  While he said some of the tools inside the tools bag had belonged to Chan, he could not say which or what equipment.

Respondent’s case

5. Chan adopted his witness statement as evidence, and said:

(a)  Yim had only worked on part of his (Chan’s) projects 3 times, and they were since April 2004, including the present one. 

(b) On the question of equipment, he said that at all times Yim was an independent contractor who provided himself with all equipment.  After the accident, Ms Chiu of the Temple’s office rang him to say that a stranger had come to take Yim’s tools back, asking him (Chan) what to do, and Chan gave permission because the tools had belonged to Yim.

(c)  As to Yim’s project in dismantling the ceiling of the change room, the Temple had contacted him (Chan), and he was going to engage independent contractor 明仔 to do the work, but before he had contacted明仔, Yim had telephoned him asking whether there was any work available, and so on the day before the accident he took Yim to the change room to inspect the ceiling, and Yim quoted him $2,000 which he thought was reasonable.

(d)  The ladder from which Yim had fallen belonged to the Temple省善真堂as shown in the photographs at Bundle pages 112, 113 and 115, being one of those although he was not present at the time and so he could not point to which one.

(e)  His was and still is a one-man business, registered at his home address, engaging no staff, not even a secretary.  Whenever he received a project he would contact his subcontractors, each being responsible for one type of work, e.g. cement, wood work, painting, water, electricity, and demolishing (flooring and ceiling). He had engaged Yim to do dismantling work 3 times including this time.  Yim was no different in capacity from any other of his subcontractors.

(f)   He had always paid his subcontractors in cash, and kept final receipts for larger amounts only.  For Yim, as he was elderly and the amounts were small, he had not asked him to sign for any receipts.  He said for the refurbishing and decorating business, it was normal to only work “on trust”, because if any subcontractor was unsatisfactory he would not give any more work to him.

(g) After the accident he went to visit Yim in hospital.  Yim had asked him whether he had insurance, and when he replied in the negative, Yim had said “Give me $50,000 and be done with it”, but he felt there was no basis for such a demand and so he did not agree with that suggestion.

(h)  He has never bought any workers compensation insurance, nor paid any MPF for anybody (except for himself), because all his projects he had subcontracted out, he had never had any employee, and he had expected subcontractors to have bought their own insurance policies.

6. RW2 Ms Chiu and RW3 Ms Lam were staff of the Temple.  They testified to events immediately after the accident, e.g. what they and Yim had said to each other, as will be mentioned in §10 and §12 below. Yim did not claim he had fallen from a broken rung or plank, but that he had slipped from a ladder.  In addition, both RW2 and RW3 said the change room was very small and the ceiling quite low, and so the implication was that it could not have accommodated two ladders and a plank on top as alleged by Yim, that there was only one ladder in the change room immediately after the accident, that there was no wooden plank, and that the ladder was not damaged anywhere.  RW2 said Yim’s left foot was without a shoe, the shoe being quite a distance away.  RW2 said Yim’s left shoe was flat at the heel, indicating he had been “half wearing it only (“踩踭”)”.   RW3 said Yim had both shoes on his feet, but both were only half worn on Yim’s feet.

7. The definition of an “employee” is found in s.2 of the Ordinance.  Certainly Yim was working “for” Chan, but whether Chan was his “employer” is what I have to decide.

8. The question of Chan’s prohibition against Yim working on the day in question is a mere red herring, because s.5(4)(b) makes any prohibition irrelevant as to whether Yim was an employee.

Assessment of evidence

9. Yim’s assertions in relation to his number of working days per week, and hence per month and per year, and his alleged reasonable income, were unsupported by any documentation.  I find this curious because in the normal course of events, seeing Yim was not an illegal worker, if he had been a normal employee, there must be at least some documents to evidence his employee status.  If he had purposely avoided documentations in order to evade income tax, this makes him a dishonest and incredible witness.  If Yim had been paid regularly as an employee as he asserts, (a) he has no such records, (b) he would not likely have been keen to work on a Sunday, (c) he has never “punched cards” to show arrival and departure times, (d) he had no MPF contribution from Chan, and he has not, even up to today, made any complaint to the authorities, (e) he has not, even up to today, complained to the Labour Department about Chan not granting him any statutory holidays.  Although he says he had days on which he was off work, the argument goes both ways, because if he was an independent contractor not having work on certain days, he would also be off work; the problem for him is, if he had been a normal employee his days off would not have been irregular and statutory holidays ignored, and finally, (f) he has not, even up to today, complained to the Labour Department about Chan not having bought workers compensation insurance for his protection.

10. I also find it curious that if Yim had been an employee, he would not have had, or not have known, any other colleagues who were allegedly his co-employees.  On the contrary, the other people he knew who were working “for” Chan were all independent subcontractors.  For Chan to have different independent subcontractors responsible for different types of work, but to have just one, namely Yim, as an employee, I find unconvincing.  I find the Respondent’s version much more probable as representing the truth, namely, as for the instant work project, it was Yim who had initiated the enquiry by telephoning Chan, Chan having originally intended to give the work to “明仔” (an independent contractor), but as Yim had telephoned him asking for work first, he had decided to engage Yim.  Still on the subject of this particular project, the manner in which Yim has claimed the ladders had been placed, and why the horizontal plank should have fallen when, even if one rung had fractured, it was not still held by at least the other rung on the same ladder, makes Yim’s thesis improbable.  Further, female supervisor Ms Chiu says that Yim’s immediate description of his fall to her was from “a slip from the 3rd or 4th rung”, not because a rung had fractured or a wooden plank had fractured.  The fact that Yim’s left canvas shoe should have fallen off is also curious on Yim’s version, but could be explained by Ms Chiu’s immediate accusation to Yim that “the heel of the shoe had been worn flat, plus the shoe had not been fully worn” (Cantonese slang says “踩踭” situation with the shoe’s heel trod under the heel of the foot.  I find no motive why Ms Chiu should have taken sides for Chan in this subtle way.

11. When Yim was asked where else Chan had employed him to work throughout the long period of 4 years, Yim could not answer, and only when pressed repeatedly did he give a vague reply as mentioned in paragraph 4(r) above.  It was not his case that he had worked continuously, 6 days a week for 4 years, only at 圓玄學院.  Accordingly, if Yim had truly worked in the manner he claimed, he must have been able to give an answer much more satisfactory than this.

12. Furthermore, Yim said he had fallen from the broken top rung of the ladder when the plank broke, but the ceiling was only 10 feet high, the ladders were 7 feet, and his body height was over 5 feet.  To then say he was standing on the plank is unconvincing because his body would have been incredibly bent instead of being straight for this type of work.  The alternative explanation, as Ms Chiu said, “he said he had slipped and fallen while climbing on the 3rd or 4th rung”, is much more likely.  And furthermore, although he claimed that his equipment had been supplied by Chan, he nevertheless agreed that at least one electric drill and some other, e.g. a hammer, were indeed his own tools.  The issue about the ladders I have already addressed.  Yim claimed he had taken “all tools” from Chan via the boot of Chan’s car before he commenced work each time, but when asked what car that was, he could not answer, not even the colour of the car. 

13. As to Chan, the worst factor against him was the fact that he had filled a Form 2 which was for an employer to report an injury or death sustained by an employee, as the title states.  His explanation was: (a) It was mailed by the Labour Department for him to provide details about the accident, and he felt obliged to supply information and co-operate with the authorities, especially with details about his own company, which boxes in the Form he has filled in, but he had not realised the present legal implication of the Form, (b) where the boxes (for example boxes A, C, D, F) contained the words “employee”, all of these he has left blank because he did not have any employee, and therefore had no details to supply, and (c) the MPF office had told him about the requirement to contribute for employees, that he knew it was a criminal offence if he did not contribute, but that he had never paid MPF for anyone (other than for himself) because he had no employee.

14. With the existence of the Form 2, under normal circumstances I would have found against Chan in the crucial issue of this trial.  However, with the features as stated in the above paragraph, especially in item “(b)” above, and when it is not disputed that his education level was only to 2nd year high school in the mainland some 35 years ago (he is now 49 years old), his “ability to understand official matters is limited” as he put it, and the nature of his work not needing university education or legal analytic skills, in this particular case I accept his explanation as to why he had filled in the Form 2 for the Labour Department, even though the title of the Form refers to employees compensation.  The whole of the evidence in this trial, and the quality of his testimony, enable me to accept his explanation.  The fact that he had filled in a Form 2, even if fully which he had not, does not make him bound by any admissions: see LAU Kwok-chiu  v  Senfield Ltd trading as Tsui Wah Restaurant HCPI 245/2006 at paragraph 42 of the judgment.

Findings

15. I have seen and heard all the witnesses in court.  Yim was evasive, and more often than not he was hesitant or completely unable to reply when faced with awkward questions, e.g. about the height of the ladders and the ceiling. The quality of Respondent Chan’s testimony, on the other hand, was far more impressive, far more convincing, far more credible, and far more reliable. 

16. I have examined the indicators when determining whether Yim was an employee.  These are set out in summary form in Chitty on Contracts (27th edition) Vol.II page 703.  From the whole of the evidence and for reasons of credibility, I have no dificulty finding that ApplicantYim was not an employee of Chan as defined in s.2 of the Ordinance.  I find that in relation to this matter, Chan had subcontracted the relevant work to Yim, but had not employed Yim in the capacity of an employee.

17. Accordingly I find Respondent Chan not liable under the Ordinance.

Costs

18. Costs of this action are awarded to the Respondent, to be taxed if not agreed.