TANG LAI KING（for herself and on behalf of the members of the family of KEUNG CHOI ON, deceased v. LEIGHTON CONTRACTORS (ASIA) LTD and GAMMON CONSTRUCTION LTD t/a LEIGHTON-GAMMON JOINT VENTURE (a firm) AND OTHERS

DCEC 2218/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 2218 OF 2014

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JUDGMENT

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INTRODUCTION

1.  On 9 December 2012, a fatal industrial accident happened at an open area storage place situated at DD 117, Lot No 1939, Middle Portion, Kung Um Road, Yuen Long, New Territories (“the Workplace”).  Mr Keung Choi On (“the Deceased”), aged 60, was working at the Workplace on that day.  While he was trying to rig some construction materials on the ground and hook them on to the jib of a crane, his head got hit by the jib and was trapped between the front-end of the jib and a close by concrete parapet.  He suffered serious head injuries. He died on the same day.

2.  This is the trial of the employees’ compensation claim made by Madam Tang Lai King, the Deceased’s widow, acting for herself and on behalf of their two children.

3.  The Deceased was a casual labourer and, like many others, worked from one site to another as and when there was work, receiving a daily wage. Therefore he could, in theory, be found working for different employers on different jobs on different days.  It is common ground that when the accident happened, the Deceased was an employee, as opposed to an independent contractor.  The issue, which is hotly contested in this action, is who his employer was on the day of the accident.  That in turn depends on what works he was doing or on which project he was working at that time.

4.  In her amended application, Madam Tang frames her case of employment against Mr Kan Chi Cham, trading as Tung Fat Construction Engineering, and Mr Hui Yick Sang Ungent, who are the 2^nd and 3^rd respondents respectively in this action.  (I shall refer to them as “Mr Kan” or “Tung Fat” and “Mr Hui” below.)  It is a three-pronged case. 

(1) First, the Deceased was the employee of Tung Fat;

(2) Secondly and alternatively, he was the employee of Mr Hui; or

(3) Thirdly and alternatively, he was jointly employed by Tung Fat and Mr Hui.

5.  The person whom the court finds to be the employer at the time of the accident would be liable under the Employees’ Compensation Ordinance, Cap 282 (“the Ordinance”).  Further, where the court finds that Mr Hui was the sole employer, Madam Tang claims that he was a sub-contractor of Tung Fat and that under section 24 of the Ordinance, the latter would also be liable to pay compensation.

6.  Madam Tang further sues the 1^st respondent, a joint venture known as “Leighton-Gammon Joint Venture”, which I shall refer to below as “the JV”.  She claims that it was the principal contractor of Tung Fat in respect of the work which the Deceased was carrying out at the time of the accident.  The claim against the JV is therefore also made under section 24.

7.  The 4^th respondent, Allied World Assurance Company Limited, was the JV’s insurer for employees’ compensation and they have had the same legal representation in these proceedings and they advance the same case in this action.  The JV insurer was granted leave to join in as a party.  Madam Tang does not claim against the insurer in this action.  For easy reference, where I refer to the stance of the JV below, it should be taken to refer to the stance of both the JV and its insurer.

8.  Mr Hui has not put in an appearance in these proceedings at all.  At the beginning of the trial, Ms Christina Lee, counsel for Madam Tang, sought to apply for default judgment against Mr Hui.  At the end of her opening submissions, given that the claims against the JV, Mr Kan and Mr Hui are arguably alternative and inconsistent, I directed that the application be stood over until after the end of the evidence and be restored at the instance of Madam Tang at closing if she so wished.  In the end, the application was not revived and hence Mr Hui’s liability is to be determined on the evidence.

FACTUAL BACKGROUND

9.  The factual disputes in this case are more complex than most other employees’ compensation cases.  This primarily stems from the fact (which is common ground) that apart from the Workplace, there was another site at which the Deceased was working intermittently during the three-month period prior to the accident.  On both sites, the Deceased had been working under the supervision of Mr Hui. 

10.  That site was the subject matter of a big project of MTR Corporation Limited known as “Express Railway Link Contract No. 810A - West Kowloon Terminus Station North”.  The JV was the main contractor.  Under a sub-contract between the JV and Tung Fat dated 18 October 2011, the JV sub-contracted the hoarding works to Tung Fat.  The project, the site and the sub-contract will be referred to below as “Project 810A”, “the West Kowloon Site” and “the Sub-Contract”.

11.  There is conflicting evidence as to what works were done at the Workplace; whether those works were related to the Sub-Contract and Project 810A at all and, if so, how they were related; the role of, and the relationship between, Mr Kan and Mr Hui in Project 810A; and the role of, and the relationship, between Mr Kan and Mr Hui in connection with the Workplace. 

12.  Madam Tang’s case is essentially that the works carried out at the Workplace formed part of the works under Project 810A, notwithstanding that they were done outside of the West Kowloon Site.  She further claims that Mr Kan had all along been in charge of the Workplace, including renting it and operating it, through Mr Hui.  Hence liability for Mr Hui and/or Mr Kan and the JV.

13.  On the other hand, Mr Kan’s case is that he had no involvement at all with the Workplace, Mr Hui was solely in charge of that site and the works carried out there were not works done pursuant to Project 810A.  Hence no liability for Mr Kan.

14.  As far as the JV is concerned, it similarly contends that it had nothing to do with the Workplace and the works done there were not executed pursuant to Project 810A.  Hence the JV cannot be held liable for those works as a principal contractor.

15.  Given the complexity of the background factual matrix, it is essential that one should stay focused on two key issues, which would ultimately determine the liability of the respondents in this action.  They are:-

(1) What work was the Deceased doing when the accident happened?

(2) Who was the Deceased’s employer in respect of such work?

16.  It should immediately be noted (and for that purpose I have italicised the relevant words in the preceding paragraph) that these two issues are confined to a specific moment in time, which is (naturally) the day of the accident because that is the time at which liability is to be attached to the Deceased’s employer and principal contractor, if any, under the Ordinance.

17.  But the two issues cannot be properly answered by merely looking at what happened and who was involved on that day in isolation.  The conflicting evidence as outlined in paragraph 11 above, which spans geographically from the West Kowloon Site to the Workplace and chronologically from the commencement of the Sub-Contract to the day of the accident (and possibly afterwards), will need to be assessed and weighed as a whole in order for the court to arrive at the answers.  It is therefore necessary to set out below at some length the parties’ respective cases. 

18.  Before that, however, I set out below the background facts which are either common ground or not in any serious dispute.

19.  The works under the Sub-Contract commenced in mid-December 2011 and were completed in about March 2012.   Subsequent to that, the JV continued to instruct Tung Fat to provide hoardings and other works for Project 810A by issuing what is known as “Instruction to Sub-Contractor” or “ISC” on a job by job basis. These ISC works continued until about a few months after the accident, ie, in early 2013.

20.  Tung Fat’s works comprised hoarding works and other miscellaneous works.  In respect of the former type of works, it included supplying, fabricating and erecting new hoardings at such locations on the West Kowloon Site as directed by the JV.  The JV would also give instructions to Tung Fat from time to time to re-locate, modify or dismantle existing hoardings.  The hoardings were mainly of two types – the 2.4m high hoardings and the 4.9m high hoardings.  In respect of the miscellaneous works, the nature varied and these works would include, eg, installing metal gates and dismantling existing metal structures etc.

21.  Whether the works were performed under the Sub-Contract or in pursuance of individual ISCs, Mr Kan worked closely together with Mr Hui.  The exact relationship between the two is in serious dispute.  Mr Kan says that he had further sub-contracted the works to Mr Hui and hence Mr Hui was his sub-contractor. According to the statements made by Mr Hui prior to this action, however, Mr Hui said that he was an employee of Mr Kan working as a foreman instead. 

22.  What is not in dispute, however, is that Mr Hui would appear to be the main person in charge of the actual execution of the hoarding and miscellaneous works.  He would source materials from suppliers, find and supervise workers and give them instructions to carry out the works.  However, the workers would normally be paid their wages by cheques issued by Mr Kan in the name of Tung Fat on a monthly basis. 

23.  The Deceased first worked on the West Kowloon Site in September 2012. According to the monthly attendance records kept by the JV which purport to show the time of all workers entering and leaving the West Kowloon Site on each day of the month (“the Site Entry Records”), the Deceased attended the site for one day in September, ten days in October and four days in November and he last attended the site on 15 November 2012.

24.  As to the Workplace, apart from the day of the accident, it is not entirely clear whether and how often the Deceased had attended that site and worked there. 

25.  Immediately after the accident, the Labour Department commenced an investigation.  From December 2012 to August 2013, a number of individuals, including (but not limited to) Mr Kan, Mr Hui and some of the Deceased’s co-workers, attended interviews with the Occupational Safety Officer of the Labour Department.  Written declarations were made by these individuals in the course of the investigation, pursuant to section 4(1)(e) of the Factories and Industrial Undertakings Ordinance, Cap 59 (“the FAIU Ordinance”).  As such, the declarants had signed them as declarations of truth of the matters stated in there.  These declarations are disclosed in these proceedings and referred to at trial.  The findings of the investigation were recorded in the Fatal Accident Report dated 7 June 2013.

26.  The co-workers who had made declarations in the investigation include:-

(1) Mr Xu Tu Fu;

(2) Mr Keung Kwok San; and

(3) Mr Lau Wing Cheung. 

27.  I set out below an account of how the accident happened, as found in the Fatal Accident Report.  I do not think that this account is controversial as far as this action is concerned.  In any event, given the position taken by both the JV and Mr Kan that they had nothing to do with the Workplace, they did not make any contrary submissions in this respect. 

28.  The Workplace was an open area.  A metal structure had been erected at the Workplace, which was used as a sheltered workshop (“the Metal Structure”). In the morning of 9 December 2012, a group of four workers, namely, the Deceased, Mr Xu, Mr Keung and Mr Lau, were clearing up the Workplace, including dismantling the Metal Structure, and removing the materials there to another site.  The division of labour was as follows.  Mr Xu would cut up the Metal Structure part by part whereas the Deceased and Mr Keung would rig the metal pieces which had been cut up, fasten them into bundles, and assist to load them on to the deck of a truck-mounted crane.  Mr Lau was the crane operator.  He would also transport the materials out of the Workplace.

29.  At around noon, Mr Hui came to the Workplace and took the workers out to lunch.  After lunch, only the Deceased and Mr Lau returned to carry on clearing up the Workplace. 

30.  When the accident happened, the Deceased was preparing to hang two bundles of metal pieces to the hook of the jib of the crane so that Mr Lau, who was controlling the crane, could load them on to the deck of the truck. According to Mr Lau, while he was extending the jib towards where the Deceased was, he suddenly became aware that the Deceased was trapped and he immediately retracted the jib.  He found that the Deceased’s head was struck by the jib head and was trapped between the front-end of the jib and a concrete parapet which was located just near where the Deceased was.

31.  The Deceased was sent to hospital for treatment and was later certified dead on the same day.

32.  As remarked above, who rented the Workplace, who was in charge there, what work was carried out there, in particular, at the Metal Structure, are all issues which are hotly contested at the trial and which have a direct bearing on the issue of liability.

33.  Following the Labour investigation, Mr Kan and Mr Lau were prosecuted under the FAIU Ordinance.  Mr Kan faced two charges, namely, that he had failed to provide and maintain a safe system of work for the lifting operation by a truck-mounted crane for the Deceased who was employed by him at the Workplace; and, further, that he had failed to provide the necessary information, instruction, training and supervision for the safety of the Deceased who was employed by him at the Workplace.  Mr Lau was charged with having failed to take reasonable care for the health and safety of the Deceased who might be affected by his acts or omissions at work.  Mr Lau was convicted.

34.  At Mr Kan’s trial, the prosecution called five witnesses, including Mr Hui, Mr Xu and Mr Keung.  Mr Kan chose not to testify himself.  One of the main points of contention was whether the Deceased was the employee of Mr Kan at the time of the accident, which was an element which the prosecution had to prove.

35.  In her reasons for the verdict, the magistrate found that there was no or inadequate evidence showing how the accident happened, especially given that Mr Lau, the only eye-witness of the accident, did not testify at the trial. Further, she considered that there was no or inadequate evidence showing that Mr Kan was the employer of the Deceased.  In her analysis of the evidence, there was a possibility that Mr Hui could have been the Deceased’s employer. It was also not possible for her to come to any finding as to the purpose of the Workplace, the identity of its proprietor and its relationship with Project 810A.  Accordingly, the prosecution had failed to prove beyond reasonable doubt that Mr Kan was the employer and how the accident took place.  Mr Kan was thus acquitted of both charges.

36.  I now proceed to set out the case of each party, with specific reference to the evidence adduced on the issues set out in paragraph 11 above.

Madam Tang’s case

37.  Madam Tang gave evidence at the trial.  Her testimony was straightforward.  She did not know much about the Deceased’s job save that he was a casual labourer because the Deceased seldom spoke to her about his work. Since mid-2012, through the introduction of Mr Keung, (whom Madam Tang described as the Deceased’s clansman (同鄉)), the Deceased got job instructions from Mr Hui from time to time.  However, she did not know where or at what site the Deceased had worked prior to the accident or by whom he was employed.  Neither did she know the relationship between Mr Kan, Mr Hui and the JV.

38.  On the day of the accident, she met Mr Lau at the hospital who briefly told her how the accident had happened.  In the evening, Mr Keung and Mr Hui also came to the hospital.  Mr Hui denied that he was the employer of the Deceased and called Mr Kan on the spot.  Madam Tang’s daughter spoke to Mr Kan on the phone.  He also denied that he was the employer of the Deceased.  A few days after the accident, Mr Keung gave a sum of $53,000 to Madam Tang, saying that it comprised wage arrears of $23,000 from Mr Kan and the balance of $30,000 was consolation money.

39.  Madam Tang called no other witness at the trial.  It is readily apparent that she was not able to, and did not seek to, adduce any direct or first-hand evidence on the key disputes in this action.  At trial, Ms Lee effectively advanced her case by relying on and drawing support from the declarations made in the Labour investigation and the evidence given at the magistracy proceedings.

40.  On the issues as outlined in paragraphs 11 and 15 above, Madam Tang’s case is essentially as follows.

41.  First, it was Mr Kan who had rented the Workplace in about November or December 2011 for the purpose of storing construction materials for the hoarding and other works under Project 810A and under some other project.  Some of the materials to be used at the West Kowloon Site would also be prepared there.  The Metal Structure was erected at the Workplace in about March 2012, which served as a rain shelter.  The purpose of the Metal Structure was to have some of the taller hoardings for Project 810A to be fabricated there and, upon completion, the hoardings would be transported from the Workplace to the West Kowloon Site.  The costs of building the Metal Structure were paid by Mr Kan. Further, on the day of the accident, apart from the green corrugated sheets which had formed the rooftop of the Metal Structure, all the other materials found on the truck at the Workplace were from the West Kowloon Site.

42.  In this regard, Ms Lee relied on statements made in the following Labour declarations:-

(1) Mr Hui’s declaration dated 17 December 2012 – see, in particular, the answers to questions 1, 22 and 25 regarding the use of the Metal Structure;

(2) Mr Hui’s declaration dated 6 June 2013 – see, in particular, the answers to questions 1 and 3 regarding the renting of the Workplace on an occasion in November or December 2011 where Mr Kan, Mr Hui, Mr Xu and the landlord were present.  See also the answers to questions 1 and 2 in Mr Xu’s declaration dated 14 June 2013 in which Mr Xu said the same;

(3) Mr Hui’s declaration dated 7 June 2013 and Mr Xu’s declaration dated 14 June 2013 (see the answer to question 5) regarding the payment of the monthly rent of the Workplace by Mr Kan;

(4) Mr Xu’s declaration dated 17 December 2012 in which Mr Xu referred to Tung Fat as the “occupier” of the Workplace; and

(5) Mr Keung’s declaration dated 6 March 2013 – see, in particular, the answer to question 4 in which Mr Keung stated that on at least three occasions, he transported those materials which were completed at the Workplace to the West Kowloon Site.  Upon arrival at the latter site, he would inspect whether there were any scratches to the materials and if so he would have to re-paint them.

43.  In this regard, Ms Lee further drew support from the oral evidence given by the above declarants at the magistracy proceedings to similar effect.

44.  Secondly, on the issue as to the identity of the Deceased’s employer in respect of the sub-contracting work under Project 810A, in her closing submission, Ms Lee narrowed down her three-pronged case to two alternatives, namely:-

(1) Mr Kan was the employer of the Deceased.

(2) Alternatively, Mr Kan and Mr Hui were working together as business partners and they jointly employed the Deceased.

45.  In support of the above case, Ms Lee referred to the fact that it was Mr Kan, trading as Tung Fat, who issued the pay cheques to the workers for Project 810A.

46.  Further, Ms Lee drew support from statements made in the following Labour declarations:-

(1) Mr Xu’s declaration dated 17 December 2012 in which he stated that he was employed by Tung Fat and that Mr Hui was the supervisor and, further, that each month Mr Kan would hand him his pay cheque in person;

(2) Mr Keung’s declaration dated 6 June 2013 to which he attached a copy of a receipt dated 28 December 2012 signed by him and addressed to Tung Fat, acknowledging the payment of five days’ wages under Project 810A for the month of December.  In his answer to question 9, Mr Keung explained that the receipt covered four days of work at the West Kowloon Site and half day of work at the Workplace, that is the day of the accident, but that Mr Kan paid him five days of wages in cash.

47.  There was similar evidence given by Mr Hui, Mr Xu and Mr Keung in the magistracy proceedings.

48.  Given that, on Madam Tang’s case, the works carried out at the Workplace were works for Project 810A, the workers who worked there would also be under the same employment arrangement as under Project 810A.  As far as this action is concerned, it seems that Madam Tang would be content with a finding of employment on either alternative, as set out in paragraph 44 above.

Mr Kan’s case

49.  On the first key issue, Mr Kan’s case is that he had nothing to do with the Workplace.  Mr Yan Kwok Wing, counsel for Mr Kan, emphasised in his written closing submissions that Mr Kan had no “knowledge, involvement, connection and/or control over the Workplace”.  Hence he had had no knowledge of what the Deceased was doing there when the accident happened.  Mr Kan denies that he had rented the Workplace, used it as a storage place for Project 810A or had workers fabricating hoardings or doing other works there for Project 810A.

50.  Accordingly, on the second key issue, in respect of whatever work the Deceased was doing on the day of the accident, Mr Kan could not be, and was not, his employer.

51.  The above essentially sums up Mr Kan’s position on liability.  But it is necessary to go into his case in more detail in the following two areas:-

(1) Mr Kan learnt from Mr Hui that the latter was in charge of and controlled the Workplace and used it for his own profit.  The Workplace was not used to carry out work for Project 810A.

(2) In respect of the hoarding and other works under Project 810A, Mr Kan had sub-contracted the works to Mr Hui and Mr Hui was the employer of the workers, including the Deceased.

52.  In respect of paragraph 51(1), on the day after the accident, Mr Kan went to the Workplace.  Mr Hui told him that he had rented the Workplace as a temporary storage for used or discarded materials collected from various sites.  The materials would later be sold for profit.  From what Mr Kan observed at the Workplace, there were some materials which “looked like” used or discarded materials from Project 810A but the majority of the materials, including corrugated sheets, H-beams and containers clearly did not come from the West Kowloon Site as these materials had never been used at that site.  In respect of those materials which “looked like” Project 810A materials, since they were used or discarded materials in any event and had been removed from the West Kowloon Site, they were owned by Mr Hui.

53.  In fact, about two weeks before the accident, in what appeared to be a casual conversation, Mr Hui told Mr Kan that he had rented the Workplace and had to vacate the place soon since the lease was about to expire.  But Mr Kan did not enquire further as the Workplace did not concern him.

54.  After the accident, Mr Hui told Mr Kan that he had arranged for a few workers, including the Deceased, to clear up the Workplace so as to give possession back to the landlord.

55.  On 9 December 2012, Mr Hui called Mr Kan at about 3pm telling him about the accident.  Mr Hui said that he had not arranged for any insurance for the Deceased and asked Mr Kan to do him a favour by reporting the accident to the JV as an accident under Project 810A.  Mr Kan turned down the request straightaway.

56.  Accordingly, Mr Kan says that he should not be liable to pay employees’ compensation since the accident did not take place at the West Kowloon Site and the works carried out by the Deceased at the time was not done pursuant to Project 810A at all.

57.  On the last point, Mr Kan gave evidence at trial to the effect that as far as he knew, all the works under Project 810A had been done on site, ie, at the West Kowloon Site.  He explained that it made much more sense for hoardings to be done on site for the following reasons:-

(1) The ground on which the hoardings were to be erected at the West Kowloon Site were not flat and the hoardings would need to be tailored to the varying ground level or condition.  Therefore fabricating the hoardings on another site was impractical.

(2) Neither would it make economic sense to have the hoardings fabricated off site as additional costs would be incurred for transporting them back to the West Kowloon Site for installation.

(3) Hoarding works are simple in nature and straightforward.  Hence there was no need to pre-fabricate off site.

58.  In respect of paragraph 51(2) above, Mr Kan’s case is that while under Project 810A, he was the sub-contractor of the hoarding and other miscellaneous works vis-à-vis the JV, he had further sub-contracted the works to Mr Hui.  Mr Kan was responsible for supervising and co-ordinating the works, liaising with the JV and dealing with accounting matters whereas Mr Hui was responsible for the actual execution of the works, including employing and supervising workers and sourcing materials.  Effectively, the scope of works under the Sub-Contract was the same as that under the sub-contracting between Mr Kan and Mr Hui. 

59.  Mr Kan said that the workers were all hired by Mr Hui.  In fact, Mr Kan did not know the workers very well.  He did not need to since he had sub-contracted the execution of the works to Mr Hui.

60.  The value of the Sub-Contract between the JV and Mr Kan was about $1,361,000.  Under the oral agreement between Mr Kan and Mr Hui, Mr Kan would receive ¼ of the value of the Sub-Contract, ie, around $340,000, and Mr Hui would receive ¾ of the value, ie, around $1,020,000, but the latter would have to bear the costs of the works, including workers’ wages and costs of the materials.  In other words, provided that the works were done to the satisfaction of the JV (and the JV paid according to the Sub-Contract), Mr Kan would make a net profit in the fixed sum of around $340,000.  On the contrary, since under the further sub-contracting arrangement, Mr Hui would bear the costs of the works, he might or might not make a profit on the project.  In other words, Mr Hui assumed the risk of loss in respect of the hoarding and other works under Project 810A.

61.  According to Mr Kan’s evidence, he first made acquaintance with Mr Hui back in 1999.  In March 2011, Mr Hui approached Mr Kan claiming that he had over 20 years’ experience in hoarding works and encouraged Mr Kan to bid for these works from Leighton as Mr Kan had a good relationship with them.  Mr Kan was not familiar with hoarding works as he was mainly engaged in renovation and fitting out projects.  However, Mr Hui suggested that Mr Kan could bid for hoarding projects in Tung Fat’s name from Leighton and Mr Hui would do the actual works.  Mr Hui could not bid for the works himself since he was a bankrupt person.  That is the reason, explained Mr Kan, why Tung Fat was formally the sub-contractor for hoarding works for Project 810A but the actual works were further sub-contracted to Mr Hui.

62.  As noted above, the works under the Sub-Contract was completed in about March 2012.  Subsequent to that, Tung Fat carried on executing the ISC works.

63.  In respect of these ISC works, Mr Kan entered into a further sub-contracting arrangement with Mr Hui, which is substantially the same as that applicable to the original Sub-Contract works.  Overall speaking, Mr Kan would receive ¼ of the total value of the ISC works whereas Mr Hui would receive a ¾ share but he had to bear all the labour, materials and other costs.  But the exact final amounts to be received by each of them could only be confirmed upon the completion of all the ISC works.  In the meantime, the finance arrangement between Mr Kan and Mr Hui is, broadly, as follows.

64.  Given that the JV would only pay for the works upon completion and certification, Mr Kan would, at least in respect of the first few ISC works, have to pay for the expenses as they arose, such as wages and costs of the materials, out of his own pocket first since Mr Hui did not have the money to pay for any of those. 

65.  Mr Kan would issue invoices to the JV usually on a monthly basis for works done up to that month.  Upon receiving payment from the JV, Mr Kan would reimburse himself for expenditures he had previously incurred.  Any surplus left would sometimes be carried over to the following month.  In other months, where there was substantial surplus left, Mr Kan would decide on a sum to be distributed to himself and Mr Hui in equal shares. 

66.  At trial, Mr Kan explained that such distribution was not made in a ¼ to ¾ ratio between himself and Mr Hui since he needed to ensure that sufficient funds were kept to meet any future expenditure while the ISC works were ongoing.  That is why the monthly breakdown recording the income and expenses under Project 810A and prepared by Mr Kan showed that the distributions to him and Mr Hui were always made in equal shares.  In any event, there would be a final accounting upon completion of all the ISC works so as to reflect the ¼ to ¾ ratio, as agreed between him and Mr Hui.

67.  To sum up, under both the Sub-Contract and the subsequent ISC works, Mr Hui was Mr Kan’s sub-contractor.  All the workers engaged by Mr Hui, including the Deceased, were employees of Mr Hui, notwithstanding that their wages were paid by cheques drawn by Mr Kan in the name of Tung Fat each month.

68.  On the payment of wages, Mr Kan explained that it had been agreed between him and Mr Hui that he would pay the wages directly to the workers. These wages as paid by Mr Kan would eventually be set off against Mr Hui’s entitlement under their sub-contracting arrangement. 

69.  Each month, Mr Kan would take a look at the amounts of the wages payable, as calculated and presented to him by Mr Hui.  But he would not be concerned with the detailed calculation.  He would write out the cheques accordingly if the amounts appeared to be generally reasonable.  Mr Kan explained that by paying the wages directly to the workers instead of paying through his sub-contractor, he could ensure that the workers were actually paid and he would not find himself in a situation where the workers might not receive their wages and complain to the JV if his sub-contractor absconded with the wages.

Mr Hui’s case

70.  Mr Hui was absent at the trial and therefore, strictly speaking, he does not have a case to speak of for the purpose of this action.

71.  However, the position which he took in the Labour investigation and at the magistracy trial was broadly as follows:-

(1) Under Project 810A, he was an employee of Mr Kan.  He acted as a foreman and was responsible for arranging for workers to carry out the hoardings and other miscellaneous works.

(2) The Workplace was another site of Mr Kan, who had rented the Workplace and paid the monthly rent of $3,000.

(3) As instructed by Mr Kan, Mr Hui had full responsibility of supervising the works which were done at the Workplace.

(4) The workers, including himself, the Deceased, Mr Keung and Mr Xu, were all employed by Mr Kan.

(5) The workers had been storing and fabricating hoardings for Project 810A at the Workplace.

The JV’s case

72.  The JV had not known of the existence of the Workplace prior to the accident.  In respect of the first key issue, Mr Samuel KY Chan, counsel for the JV and its insurer, stated their position in his closing submissions as follows:-

“...... upon a proper analysis of the evidence, and in particular the contemporaneous photographs taken by the [Labour Department] shortly after the accident, the only irresistible inference to be drawn is this: the Deceased was rigging dismantled parts of a rain shelter located at the Workplace under the instructions of R3 as an odd job worker and the work undertaken by him on the date of the accident was wholly unrelated to Project 810A.” (original emphasis)

73.  On the second key issue regarding the identity of the employer of the Deceased, Mr Chan stated that the JV did not wish to commit itself to any position although the JV would be inclined to accept Mr Kan’s version as the truth. 

74.  As to what works had been carried out at the Workplace previously, the JV challenges the reliability of the hearsay evidence relied on by Madam Tang and contends that she simply has demonstrated no evidential basis to say that the works done there had such connection with Project 810A that liability should be attached to the JV under the Ordinance.  I shall deal with the JV’s submissions on the hearsay evidence in the “Analysis” section below.

75.  The JV called two witnesses at trial:-

(1) Mr Jimmy Sum – he is employed by one of the JV partners as a quantity surveyor and has worked on Project 810A from 2011 to now, handling commercial matters.

(2) Mr Kenneth Chin – he is employed by one of the JV partners as a safety manager and has also worked on Project 810A since 2011.

76.  Mr Chin’s evidence is largely uncontroversial. 

77.  As for Mr Sum, he made two witness statements in these proceedings and was subject to lengthy and extensive cross-examination at the trial:-

(1) One of the main contentions made in Mr Sum’s first witness statement was that based on the ISCs issued by the JV and the invoices issued by Tung Fat around the time of the accident, Mr Sum believed that Tung Fat was not engaged in any hoarding works from November 2012 to February 2013.

(2) In his supplemental witness statement, Mr Sum confirmed that he made a mistake in his first statement because there was indeed an ISC relating to hoarding works which were completed in November 2012.  But the JV’s contention remained to be that there were no hoarding works at around the time of the accident, ie, 9 December 2012.

(3) Yet, during cross-examination, it transpired that Mr Sum’s supplemental witness statement was still inaccurate because Mr Sum had overlooked yet another ISC, namely ISC No 29.  He admitted that judging from the timing of that ISC and Tung Fat’s invoice in respect of work done up to 25 December 2012, he was not sure that there were no hoarding works carried out by Tung Fat in December 2012.

78.  Therefore, insofar as the JV seeks to rely on Mr Sum’s evidence to contradict Madam Tang’s case that hoarding works were in fact being done at the Workplace throughout 2012, it is evident that such evidence is inadequate.

THE ISSUES

79.  I have set out the two key issues which will be determinative of the liability of the respondents in paragraph 15 above:-

(1) The first issue regarding the Deceased’s work is a question of fact whereas the second issue regarding the identity of the Deceased’s employer is a mixed question of fact and law. 

(2) Therefore, even where I accept the factual case of either Madam Tang or Mr Kan (subject to any other factual finding) insofar as the issue of employer is concerned, I still need to consider as a matter of law, on those facts as found, who the employer was.  

80.  As remarked above, the two key issues are not to be answered in isolation.  The conflicting evidence as identified in paragraph 11 above will need to be resolved before the court can make a finding on the two key issues.

81.  Needless to say, in order to resolve the factual disputes, the evidence adduced by each party will need to be looked at and weighed carefully.  However one prominent feature which stands out in this action is that as far as Madam Tang’s case is concerned, it is primarily, if not exclusively, supported by hearsay evidence in the form of the declarations made in the Labour investigation and the oral evidence given in the magistracy proceedings. 

82.  There is no objection raised by any of the respondents as to the admissibility of such hearsay evidence.  What is in dispute is the weight that the court should give to it, if any.

83.  In the “Analysis” section which follows, I shall first examine the hearsay evidence relied upon by Madam Tang and determine how much weight, if any, should be accorded to it.  Next, I shall consider the evidence of Mr Kan, who was the key witness testifying at the trial, and determine the reliability and credibility of his evidence.

ANALYSIS

Madam Tang’s hearsay evidence

84.  Ms Lee referred to the Court of Appeal decision in Yu Nongxian v Ng Ka Wing [2007] 4 HKLRD 159.  That case also concerns a fatal industrial accident.  In her employees’ compensation claim, the widow of the deceased worker relied on hearsay evidence in the form of declarations made to the Labour Department and evidence given at the coroner’s inquest in order to establish the identity of the deceased’s employer.  (Just like in the present case, the person with the fullest knowledge on the issue – the deceased worker – was no longer available to speak.  The widow therefore had to resort to hearsay evidence instead.)

85.  The court says that whether such hearsay evidence should be admitted is regulated by section 47 of the Evidence Ordinance, Cap 8, and its weight is to be determined by section 49 – see paragraph 50 (at 170).  It was held in that case that, after taking into account the consideration under section 49, the widow had proved her case on the identity of employer on the balance of probabilities: see paragraphs 40 to 44 (at 169).

86.  It is necessary to set out section 49 in full below:-

“(1) In estimating the weight, if any, to be given to hearsay evidence in civil proceedings the court shall have regard to any circumstances from which any inference can reasonably be drawn as to the reliability or otherwise of the evidence.

(2) For the purposes of subsection (1), regard may be had, in particular, to the following-

(a) whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness;

(b) whether the original statement was made contemporaneously with the occurrence or existence of the matters stated;

(c) whether the evidence involves multiple hearsay;

(d) whether any person involved had any motive to conceal or misrepresent matters;

(e) whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose;

(f) whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight;

(g) whether or not the evidence adduced by the party is consistent with any evidence previously adduced by the party.”

87.  The task here is to determine whether any weight should be given to the hearsay evidence relied on by Madam Tang and, if so, what weight.  There are, in my view, a number of factors in favour of giving weight to the hearsay evidence and other factors against doing so.  I shall first set out the “for” factors.

88.  First, Madam Tang’s factual case, as supported by the hearsay evidence of Mr Hui, Mr Xu and Mr Keung, is by and large coherent and consistent and appears to be inherently probable and reasonably plausible.  Mr Hui and Mr Xu spoke about the renting of the Workplace and the payment of the monthly rent by Mr Kan.  Mr Hui and Mr Keung referred to the preparation or fabrication of hoardings at the Workplace for use in Project 810A at the West Kowloon Site. Mr Hui explained that the Metal Structure was erected for the fabrication of the taller hoardings under that project.  When their statements are read together, they present a coherent account of how Mr Kan, through Mr Hui, had operated the Workplace for the purpose of carrying out works under Project 810A.

89.  It ought to be noted that there is an apparent difference in the nature of Mr Hui’s evidence on the one hand and the evidence of Mr Xu and Mr Keung on the other:-

(1) Mr Hui had an active role in Project 810A and the Workplace.  He was therefore familiar with many aspects of the operation of both sites and was in a position to give an overall account in his declarations and at the magistracy trial.

(2) In contrast, the role of Mr Xu and Mr Keung was much less involved. They were merely casual labourers working on both sites.  They went to work at the sites as and when there were works and executed work as instructed.  As such, understandably, they would not have an overall knowledge of everything that went on at the sites. 

(3) Therefore Mr Xu’s evidence and Mr Keung’s evidence may at times look piecemeal but that should not, by itself, cast doubt on its credibility.  More specifically, that should not discount the value of their evidence insofar as when they were making statements on things in which they were personally engaged or things which they actually saw with their eyes.

(4) Each of the three individuals confirmed the connection of Mr Kan to the Workplace, on different factual aspects – Mr Hui on Mr Kan’s instruction to him regarding the operation of the Workplace; Mr Xu on the renting arrangement; and Mr Keung on Mr Kan’s payment of his wages for his works at both the West Kowloon Site and the Workplace in December 2012.

90.  And, for this reason, I consider that the proper (and better) approach when assessing the statements made by Mr Hui, Mr Xu and Mr Keung is to review them as a whole.  When looked at this way, one can immediately see a consistent and common theme running through their evidence.

91.  Mr Chan invited the court to give no or little weight to the hearsay evidence.  One of his objections is mounted against Mr Keung’s allegation that materials for Project 810A had been prepared at the Workplace before they were transported to the West Kowloon Site.  Mr Chan argued that this allegation has never been corroborated by either Mr Hui or Mr Xu, even though Mr Keung would normally get instructions from either of them at the Workplace.  For the reasons stated above, I do not think that the lack of corroborating evidence would weaken the evidential value of Mr Keung’s statement.  In any event, Mr Hui did say in general terms in his declarations that works were done at the Workplace for Project 810A.

92.  Secondly, the hearsay evidence is largely consistent with undisputed evidence which has emerged from the trial:-

(1) Mr Sum accepted in cross-examination that the works under the Sub-Contract or the ISCs could be executed either on site or off site.  There was no general prohibition against a sub-contractor bringing pre-fabricated works to the West Kowloon Site.

(2) The fact that Mr Sum had on occasions observed that Tung Fat’s workers had done welding works on the hoardings at the West Kowloon Site is neither here nor there.  Mr Sum did not (and could not) say or conclude from that observation that all hoardings were done on site.

(3) Mr Sum also confirmed in cross-examination that some of the materials, such as the white corrugated sheets, found at the Workplace could have come from the West Kowloon Site, although he added that these sheets were quite common.

(4) There is evidence from Mr Kan and Mr Sum that works on the taller hoardings (4.9m) were mainly done under the Sub-Contract, ie, prior to March 2012.  This does not, argued Mr Chan and Mr Yan, sit comfortably with Mr Hui’s statement that the Workshop which was erected in March 2012, ie, just after the completion of the Sub-Contract, was for the purpose of fabricating the taller hoardings.  However, as pointed out by Ms Lee in her closing submissions, works on 4.9m hoardings were still ongoing after March 2012, as shown in the invoice issued by Tung Fat for work done up to the end of October 2012 (see item A6). 

93.  Thirdly, as Ms Lee repeatedly pointed out at the trial, the declarations made in the Labour investigation are declarations of truth under statute.  The declarants were duty bound to tell the truth when interviewed by the Labour officer.  In the magistracy proceedings, Mr Hui, Mr Xu and Mr Keung gave evidence under oath.  Ms Lee submitted, and I agree, that this is factor in favour of giving weight to the hearsay evidence.

94.  Fourthly, a number of the declarations relied on by Madam Tang were made within a short time after the accident.  Some were made in December 2012.  In those cases, it can be taken that the declarants still retained a relatively fresh memory of the factual matters which they recounted in the declarations. In this regard, I would take into account the possibility that the evidence given at the magistracy trial may not be as accurate given that the trial took place much later, ie, in December 2013, which is one year after the accident.

95.  Having set out the matters above which I consider are in support of the hearsay evidence, I now proceed to consider the submissions made by Mr Chan and Mr Yan against the hearsay evidence.

96.  First, it was submitted that Mr Xu and Mr Keung might each have an ulterior motive when making their statements.  It was pointed out that Mr Xu had known Mr Hui for a long time (since they were kids) and that he apparently depended on Mr Hui for works.  Therefore, Mr Xu might have a motive to protect Mr Hui.  For Mr Keung, it was pointed out that he was a clansman of the Deceased and could have been eager to help his family.

97.  I have to say that I do not consider it appropriate to give too much weight to this submission.  This is largely speculation.  One can equally speculate that since both Mr Xu and Mr Keung had been on the payroll of Tung Fat around the time of the accident, they might also have a motive not to make any statement against Mr Kan so as not to offend him for fear of being passed over for work.  While I cannot rule out as a possibility that Mr Xu or Mr Keung might have an ulterior motive, in my view, this is not a strong factor against giving weight to their hearsay evidence.

98.  Secondly, Mr Chan submitted that Mr Hui’s allegations are self-serving whereas Mr Yan submitted that Mr Hui’s evidence must be read with caution as he had the motive to shift the blame to others, like Mr Kan.  I think this is a more valid submission than the one concerning Mr Xu and Mr Keung.  It is a factor which I should take into account when considering the reliability of Mr Hui’s evidence.  Further, as submitted by Mr Yan, this is compounded by the fact that Mr Hui, being a respondent, has elected not to appear in these proceedings to defend himself. 

99.  Thirdly, there is no explanation as to why Madam Tang did not call upon Mr Xu or Mr Keung to testify at trial in support of her case.  Their absence has deprived the JV and Mr Kan of the opportunity to cross-examine them or challenge their evidence.  In her closing submissions, Ms Lee commented as a general statement that it is usually difficult to find witnesses to come forward to testify in employees’ compensation cases.  That may be true. However, there is no direct or actual evidence adduced before the court to show the difficulty, if any, which Madam Tang had herself experienced in calling Mr Xu or Mr Keung to testify.  This is a factor which goes against giving weight to their hearsay evidence. 

100.  Fourthly, Mr Yan submitted that some of the statements made could well be speculation on the part of the makers.  As an example, Mr Xu claimed that he had been employed by Mr Kan.  Mr Yan’s complaint here is that Mr Xu as a casual worker could not be expected “to have sufficient information and personal knowledge” regarding “complicated issues” such as employment relationship. 

101.  To an extent, I agree with this submission.  As far as the employer issue is concerned, it is a mixed question of fact and law.  While Mr Xu might have his own idea of who his employer was, it needs to be borne in mind that that was only his subjective interpretation of the relationship and is not (legally) determinative of the employer issue.  Having said that, however, insofar as the makers of the statements spoke to matters of fact to which they had first-hand or personal knowledge, the objection made by Mr Yan does not apply.

102.  Lastly, there are other objections made by Mr Chan and Mr Yan in the course of their closing submissions.  For instance, Mr Yan contended that there are discrepancies within Mr Keung’s own evidence concerning how he was paid his wages for works done at the West Kowloon Site and at the Workplace (whether by cash or cheques).  He also argued that there is a change of evidence within Mr Hui’s statements concerning the Metal Structure.  Having gone through the relevant parts of the evidence, I am not satisfied that the matters referred to cast any serious doubt on the credibility of the statements.

103.  Overall speaking, having weighed the factors for and against the hearsay evidence, I am of the view that the evidence when considered as a whole is reliable and due weight should be given to it.

104.  I should perhaps add that it seems to me that the strongest objection lies with Mr Hui’s evidence - as outlined in paragraph 98 above.  In order to absolve himself of any personal liability arising out of the fatal accident, he did have an incentive to lie and shift the responsibility to Mr Kan.  Yet, when one looks at his evidence, especially in conjunction with the evidence of Mr Xu and Mr Keung, there is really nothing to suggest that he has in fact lied or given any misleading statement.  His evidence is not tainted with any inherent improbability or implausibility or marred by any significant inconsistency. As such, I find it to be reliable.

105.  I now turn to consider the evidence of Mr Kan.

Reliability and credibility of Mr Kan’s evidence

106.  Ms Lee submitted that Mr Kan was “a totally incredible witness”.  In my view, there are a number of matters which cast serious doubt on the reliability of Mr Kan’s evidence and his credibility as a witness.

107.  First, there is a significant and inexplicable discrepancy in his evidence concerning the materials he found to be present when he visited the Workplace on the day after the accident:-

(1) In his declaration made to the Labour officer on 11 January 2013, he unequivocally stated that some of the materials at the Workplace were used or discarded materials from the West Kowloon Site and they included corrugated sheets and H-beams.  He further claimed in the declaration that Mr Hui owned these materials, whether when they were on the West Kowloon Site or at the Workplace.

(2) This is to be contrasted with his witness statement filed in this action.  There, he stated that some of the materials at the Workplace “looked like” discarded materials from the West Kowloon Site but the majority of the materials there were clearly not related to Project 810A, which included corrugated sheets, H-beams, containers etc.

(3) This is to be further contrasted with the evidence he gave during cross-examination in which he confirmed that during his visit, the only items which bore any resemblance to anything from the West Kowloon Site were some U-channels of 70mm x 40mm.

108.  At the trial, Mr Kan explained that when he was making the statements in the Labour investigation, he was angry and upset.  In an earlier conversation with Mr Hui, Mr Kan felt that he had been framed and wronged by Mr Hui.  Mr Kan said that the wording in his Labour statements might not therefore be entirely accurate.  However, as submitted by Ms Lee, it is difficult to see why Mr Kan was still emotional during his interview with the Labour officer since that interview took place on 11 January 2013, which is one month after his alleged conversation with Mr Hui.

109.  Secondly, there are significant and (again) inexplicable differences between documents which Mr Kan submitted to the JV when the ISC works were ongoing in 2012 and copies of the same set of documents which Mr Kan produced as exhibits to his declaration to the Labour officer in the investigation (the latter, “the Labour copies”):-

(1) The documents concerned were five documents entitled “Employee’s Declaration” covering the period from May to December 2012.  These were standard form documents submitted by Tung Fat as sub-contractor to the JV on roughly a monthly basis under Project 810A.  The purpose was for Tung Fat to confirm to the JV that the workers on the project had received their wages for the period concerned.  It is Mr Sum’s evidence that the JV would release interim payment only after receiving these “Employee’s Declaration” in respect of the relevant period. 

(2) On the second page of the “Employee’s Declaration”, there was a table setting out the names of the site employees, the number of their working days on the site and their signatures confirming receipt of their wages.

(3) In these proceedings, the JV, by way of discovery, disclosed copies of five of these “Employee’s Declarations” covering the same period as that covered by the Labour copies (“the JV copies”).

(4) In three out of the five JV copies, there was an entry listing Mr Hui as one of the site employees and stating his wages for the covered period.  The wages ranged from $23,400 to $29,000.  These entries obviously go contrary to Mr Kan’s case in this action that Mr Hui did not work as his employee but was his sub-contractor instead.

(5) Worse still, when the JV copies are placed alongside the Labour copies, one can immediately see that those entries relating to Mr Hui as appearing in the JV copies were all covered up in the Labour copies such that on the face of those Labour copies, one cannot see any entry of or reference to Mr Hui at all.

110.  When these differences were pointed out to Mr Kan during cross-examination and he was asked for an explanation, it is plainly obvious that Mr Kan was having a real struggle to come up with an answer.  He attempted to make a number of explanations, which Ms Lee described as “each as unbelievable as the other”:-

(1) First, he said he might have made a mistake on the name.  The reference to Mr Hui in the documents should have been to his elder brother, Mr Hui Yick Kit, instead.  But he could not remember why there was such a mistake.

(2) He was then asked why, in order to correct the mistake, he deleted Mr Hui’s name altogether from the Labour copies, instead of just altering the name.  Mr Kan’s reply was somewhat incoherent but he managed at the end to say that according to Mr Hui, his elder brother owed him some money and Mr Hui requested his name be put down in place of his brother’s.  But that clearly did not answer the question at all.

(3) Mr Kan was then asked to explain why in one of the Labour copies, the bottom half of the page (including an entry of Mr Hui) was completely blanked out.  He said he could not remember but perhaps the bottom page contained something “meaningless”.

(4) Ms Lee then asked him point blank why he covered up Mr Hui’s name whenever it came up in the Labour copies.  He started by saying that he could not remember.  Then he came up with another surprising revelation that it was a suggestion by Mr Hui as Mr Hui was concerned not to let the JV know that Mr Kan and Mr Hui were making as much as 50% profit on the project. 

(5) The answer is not understood and does not make sense.  It was in the Labour copies that Mr Hui’s entries were covered up, not the JV copies.

(6) Mr Kan was then asked to confirm that he had himself covered up the entries in the Labour copies.  Mr Kan replied that he could not remember doing the covering up himself.  He said it might well have been the female staff in his office who had done it.  When leaving for the Labour interview, he just grabbed the file containing these copies in his office and gave the documents to the Labour officer.

111.  Ms Lee submitted that these astonishing answers completely destroyed Mr Kan’s credibility.  I have to say that I totally agree.  The covering up of Mr Hui’s entries in the Labour copies is clearly a deliberate act.  Insofar as Mr Kan was implying that he was not aware of these covered entries when he submitted the documents to the Labour officer, that is unbelievable.  By submitting the altered documents in the investigation, Mr Kan clearly meant to mislead.

112.  Worse still, in cross-examination, he demonstrated an all too ready attitude or willingness to tell lies or falsify documents in order to advance his own interest.  When Mr Hui (allegedly) suggested to him that the wages should be under-reported, Mr Kan simply went along with the proposal.

113.  Thirdly, in addition to the above, there is a material discrepancy between the Site Entry Records and the wage records as disclosed by Mr Kan, for which he could offer no explanation.  According to the former, the Deceased was recorded to have attended the West Kowloon Site on one day, ten days and four days in September, October and November respectively.  However, Tung Fat’s wage records show that the Deceased had been earning $13,350 and $17,700 in September/October and October/November 2012 respectively.  The last wage amount is equivalent to 29.5 days of work, based on a daily wage of $600.  That is obviously very far off from the number of days as shown in the Site Entry Records for the equivalent period.

114.  It is true that the Site Entry Records are bound to have some inaccuracies.  Mr Chin accepted in his evidence that if a worker did not scan his pass upon entering the site, there would be no record of his entry and that sometimes workers do omit to scan their pass.  However, even allowing for some inaccuracies in the Site Entry Records, the difference in the number of working days is still material.  Does it not suggest, submitted Ms Lee, that there were indeed days when the Deceased was working on Project 810A but was doing so not at the West Kowloon Site but somewhere else, such as the Workplace?  There is no explanation offered by Mr Kan on this material discrepancy.

115.  The above discrepancies clearly point to the overwhelming conclusion that Mr Kan is an untruthful witness and as such his evidence is unreliable, as he obviously had something to hide.  His evidence is not credible.  In making my ruling on liability, I will not give any weight to it (save and except as stated below). 

Conclusion on the evidence

116.  Accordingly, where there is any conflict between Madam Tang’s evidence and Mr Kan’s, I would prefer the former to the latter.  For the reasons stated above, I further hold that Madam Tang has proved her factual case on the balance of probabilities.

DECISION ON LIABILITY

117.  It follows, and I find, that on the first key issue, Mr Kan in the name of Tung Fat was in charge of the Workplace in that he had rented the site since November or December 2011 and had instructed Mr Hui to carry out some of the works for Project 810A at the Workplace.  Further, the Metal Structure was erected in around March 2012 for the purpose of fabricating hoardings for use and installation at the West Kowloon Site.  On the day of the accident, the four workers including the Deceased were instructed by Mr Hui to dismantle the Metal Structure and clear up the Workplace.  When the accident happened, the Deceased was trying to clear up some of the cut up pieces from the Metal Structure by loading them on to the jib of the crane.

118.  On the second key issue regarding the identity of the Deceased’s employer, given my finding that the works at the Workplace were done pursuant to Project 810A, a single question now falls to be decided – in respect of the works done both at the West Kowloon Site and the Workplace, who was the Deceased’s employer?

119.  Mr Yan contended that Mr Hui alone was the Deceased’s employer:-

(1) First, Mr Hui was the person who liaised with the workers directly.  He was responsible for finding workers for Project 810A, negotiating their wages and giving them work instructions on site.

(2) Secondly, Mr Hui was Mr Kan’s sub-contractor.  Mr Kan hardly had to deal with the workers directly.  They were all under the charge of Mr Hui.  As such, these workers were not the employees of Mr Kan.

120.  I should at this juncture make clear that while I accept the factual basis as set out in (1) in the preceding paragraph (which is supported by the hearsay evidence), I make no factual finding as to Mr Kan’s account of the financial arrangement between himself and Mr Hui.  While this part of Mr Kan’s evidence is largely not contradicted (since Mr Hui was not present at trial), given my view on Mr Kan’s credibility (or, rather, incredibility) as a whole, I do not feel able to make any factual finding in his favour. 

121.  The question of who the Deceased’s employer was is not an easy one to answer.  The Court of Final Appeal’s decision in Poon Chau Nam v Yim Siu Cheung (2007) 10 HKCFAR 156 provides the authoritative guidance on how to determine whether one person is another person’s employee, as opposed to an independent contractor.  The issue in the present case is not whether the Deceased was an employee but by whom he was employed.

122.  Nonetheless, I consider that it is proper and appropriate to apply, by analogy, the general approach set out in that case (at paragraph 18) to the issue arising in the present one:-

“The modern approach to the question whether one person is another’s employee is therefore to examine all the features of their relationship against the background of the indicia developed in the abovementioned case-law with a view to deciding whether, as a matter of overall impression, the relationship is one of employment, bearing in mind the purpose for which the question is asked. It involves a nuanced and not a mechanical approach, as Mummery J emphasised in Hall v Lorimer (in a passage approved by the English Court of Appeal):

“In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.” ” (emphasis added)

123.  I would answer the question on the identity of employer on the basis of the following facts:-

(1) Mr Kan had at no time sought the consent of the JV for further sub-contracting the works under the Sub-Contract to Mr Hui, as required under the Sub-Contract.  In the eyes of the JV, Tung Fat therefore remained to be its sub-contractor for the hoarding and other miscellaneous works.  The JV would look to Tung Fat for the satisfactory completion of such works.

(2) While Mr Hui was the main contact for the workers and Mr Kan did not have to deal with them on a day to day basis, it was Mr Kan, in the name of Tung Fat, who issued the pay cheques to settle the workers’ wages at the end of each month.

(3) More notably, according to Mr Kan, before he issued the cheques, he would look at the amounts first.  In other words, he was in a position to approve the amount of the wages.

(4) Mr Kan’s explanation as to why he would pay the wages directly to the workers, instead of through Mr Hui, is also relevant - see paragraph 69 above. It does go to suggest that in the eyes of both the JV and the workers, Mr Kan did bear responsibility for the payment of wages.

124.  Based on the above facts and as a matter of overall impression, I am of the view that Mr Kan (in the name of Tung Fat) alone was the employer of the Deceased:-

(1) While Mr Yan set great store by the role played by Mr Hui, namely, that he dealt directly with the workers and supervised their works, that does not by itself make him their employer.

(2) When one takes a step back from the details in this case, the overall picture seems to be that on Project 810A, it was Mr Kan, and not Mr Hui, who was ultimately responsible for the completion of the hoarding and other miscellaneous works.

(3) Further, as far as the workers are concerned, it also seems to be the case that they would ultimately look to Mr Kan if ever they needed to assert their legal rights, eg, if wages were unpaid, notwithstanding that their first port of call might have been Mr Hui.  (This is reinforced by Mr Kan’s own explanation as to why he would prefer to pay the wages directly to the workers.)

125.  The last remaining issue is whether the JV is also liable.

126.  The JV is the principal contractor of Tung Fat in respect of the works carried out pursuant to Project 810A.  The question here is whether the dismantling of the Metal Structure, which is what the Deceased was doing when the accident happened, can be said to be works done pursuant to the project. 

127.  In his written closing submissions, Mr Chan accepted that where preparatory or fabrication works were done at the Workplace for subsequent use at the West Kowloon Site, such works were done pursuant to Project 810A.  In his oral closing submissions, Mr Chan also confirmed that if the Workplace was rented exclusively for Project 810A and the Metal Structure was erected exclusively for that project, the JV would accept that the dismantling of the Metal Structure formed part and parcel of the works under the project.

128.  Here, even on Madam Tang’s case, one of the purposes of the Workplace was to store materials for Project 810A and some other project.  However, as to the use of the Metal Structure, Mr Hui specifically said that it was built in order for the taller hoardings to be fabricated within it.  There is no other evidence before the court that the Metal Structure was used for any other purpose.  (Mr Kan had nothing to say on this because his position had all along been that he knew nothing about the Workplace, let alone the Metal Structure.)

129.  For present purposes, I do not consider that it is material that the Workplace also stored materials for other project.  The material consideration here is that the Metal Structure itself was specifically put in place for the hoarding works under Project 810A.  Thus, in my view, as a matter of logic and relying in part on the JV’s stance, as confirmed in closing, it can be said that the dismantling of the Metal Structure on the day of the accident amounted to work done pursuant to Project 810A. 

130.  For the above reasons, Mr Kan, as employer, and the JV, as principal contractor, are liable to pay employees’ compensation to Madam Tang in respect of the fatal accident.  Mr Hui is not liable under the Ordinance.

QUANTUM

131.  At the trial, the parties were able to agree on quantum should liability be established. 

132.  On the day of the accident, the Deceased was aged 60.  It is agreed that for the purpose of the Ordinance, his monthly earning is $17,700.  Hence the compensation payable under section 6(1)(c) of the Ordinance is $637,200 (ie, $17,700 x 36).  The funeral expenses have been agreed at $69,480, which sum is payable under section 6(5). 

133.  To sum up, the total amount due to Madam Tang, as agreed, is $706,680.

ORDERS

134.  Accordingly, there shall be judgment against Mr Kan and the JV in the sum of $706,680.  Interest shall accrue on this sum at half the judgment rate from the date of the accident until the date of judgment and after that at judgment rate until payment in full.

135.  The sum awarded under section 6(1)(c) should be apportioned in accordance with section 6A(1) and paragraph 5 of Schedule 7 of the Ordinance, ie, 50% to Madam Tang and 25% to each of the Deceased’s two children.

136.  I further make an order nisi that Mr Kan, the JV and the JV insurer do pay Madam Tang’s costs of the action, to be taxed if not agreed, with certificate for counsel and that Madam Tang’s own costs be taxed in accordance with the Legal Aid Regulations.