CHEUNG CHUN KUEN v. LUNG KONG LOGISTICS CO LTD

DCEC 554/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 554 OF 2005

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JUDGMENT

INTRODUCTION

1.  The Applicant was a lorry driver who drove between Hong Kong and the Mainland.  While he was driving the Respondent’s lorry on his way back to Hong Kong after the midnight of 12 October 2004, he met a traffic accident and was injured.

2.  The Applicant claims compensation against the Respondent pursuant to sections 9, 10 and 10A of the Employees’ Compensation Ordinance, Cap.282 (“ECO”).

3.  Since this May, the Respondent has become without legal representation and has actually been absent from the direction hearings.  Referring to the court record and the affirmations of service filed on behalf of the Applicant, I am satisfied that notice of today’s hearing as well as the documents for trial have been served on the Respondent.  The Applicant should be allowed to proceed.

4.  Both liability and quantum are in dispute.  Regarding quantum, there is also the appeal pursuant to section 18 of the ECO by the Applicant against the assessment of his loss of earning capacity made by the Employees’ Compensation (Ordinary Assessment) Board (“the Board”).

LIABILITY

Employee or not

5.  The Respondent’s Answers merely denied that the Applicant was at the time of the accident under the employ of the Respondent.

6.  The applicable test of whether an applicant was an employee (or a contractor) for the purpose of the ECO has been authoritatively laid down by the Court of Final Appeal in Poon Chau Nam v Yim Siu Cheung [2007] 1 HKLRD 951.  The fundamental test is whether the person who has engaged himself to perform the service was performing it as a person in business on his own account.  If yes, the contract is one for service.  Otherwise, the contract is one of service.  In my view, this is always a matter of substance rather than form.

7.  According to the Applicant, from mid-October of 2002 to 31 December 2003, he was employed as a driver by Lung Kong Transport Company.  At the end of that term, and as requested by the proprietor of the company, he switched employment to Lung Kong Logistics Company Limited, i.e., the Respondent.  However the person in charge remained unchanged.  In court, he explained that he had been asked to sign certain document with a view to altering his employee status.  But that was eventually cancelled.  The reality was that he received a monthly income from the Respondent though, according to the documentary evidence, this varied slightly from month to month.  The Respondent provided the lorry he drove.  He was obliged to take a delivery order assigned to him.  After delivery, he was required to notify the Respondent and to return the documents such as receipts.  He was not allowed to use the Respondent’s lorry to take orders from other businesses nor was he allowed to be employed elsewhere.  Leave from work would be given at the discretion of the Respondent and advance notice to secure such leave was required.  Indeed the Respondent did not accept responsibility for late delivery, insurance for the vehicle or traffic penalty tickets.  But more importantly, there is no suggestion or evidence that the Applicant had to run the financial risk of investing and managing profit and loss as that expected in running one’s own business.

8.  The dispute of whether the Applicant was at the time of the accident an employee of the Respondent was tested in the trial of the Respondent for failing to register the Applicant as an employee for the purpose of the mandatory provident fund (“MPF”) in April 2006 at the Kwun Tong Magistracy.  The transcript of the criminal proceedings and the verdict is produced.  The Applicant was a witness in the criminal trial.  His evidence was accepted by the trial Magistrate.  The Magistrate found that the Applicant was an employee of the Respondent at all material times.  The Respondent was convicted after trial as charged (KTS 11678/2005) and was fined.

9.  Considering the Applicant’s statement and evidence in court today independently, I accept his evidence.  Reference to the evidence given by both parties and tested in the criminal proceedings supports this.

10.  I am satisfied that the Applicant was at the material time an employee of the Respondent.

Course of the employment

11.  According to the Applicant’s statement, on 12 October 2004, he was instructed by the Respondent to transport a container from Hong Kong to Dongguan, the Mainland.  He completed the delivery at about 11:00 pm.  He then received a long distance telephone call from Lau who instructed him to return to Hong Kong that night.  He did but on his way, his lorry collided with another lorry.  He was injured and sent to a hospital in the Mainland in the small hours of 13 October 2004.  He was subsequently transferred through the Man Kam Dou port centre back to the hospital in Hong Kong.  In court, the Applicant managed to give such evidence in line with his statement.  I accept his evidence.

12.  I find that the accident did arise in and out of the course of the Applicant’s employment with the Respondent at the material time.  It follows that liability is established.

QUANTUM

Injuries and treatment

13.  The Applicant suffered multiple abrasions to his left knee, chest and hands as a result of the traffic accident.  X-ray revealed that his left patella was fractured.  The wounds were dressed and his left knee was stabilised by a long leg cylinder cast.  He was discharged from the hospital 2 days later with analgesics.  He required walking aid.  The Applicant attended follow-up treatment.  The leg cast was removed.  Physiotherapy followed for 3 to 4 months.  Sick leaves were granted.

Section 18 appeal

14.  On the basis of the fractured patella resulting in left knee pain, stiffness, weakness and early degeneration, the Board in September 2006 assessed the Applicant to have suffered 1% loss of earning capacity.  This assessment was reviewed and increased to 2%, leading to the certificate of review dated 29 December 2006.  The Applicant appeals against this assessment.

15.  The Applicant relied on the evidence of Dr James Kong, an orthopaedic expert.  Dr Kong examined the Applicant this January and produced his report dated 11 March 2007.  The report has been directed to be adduced without having to call the doctor to testify.  Dr Kong opined that the treatment received by the Applicant were standard and appropriate.  The Applicant has recovered from the chest wall contusion.  He has no residual complaints about his hands.  He has full range of motion of his left knee but mild muscle wasting.  There is mild to moderate residual tenderness on palpation of the patella especially over the medial aspect of the patella.  X-ray confirmed that the fracture has healed in a satisfactory alignment with preservation of the joint spaces.  Dr Kong opined that the Applicant has made a moderate recovery.  He has reached maximum medical improvement and therefore further operation was not recommended.  He has mild residual pain and weakness secondary to the fracture.

16.  Dr Kong believed that the sick leave period was reasonable.  The Applicant may resume his pre-injury occupation as a lorry driver with a mild degree of limitation.  He may experience difficulty in prolonged walking and standing for more than an hour because of pain.  He is advised to avoid prolonged walking along staircases because of the residual weakness and pain of his left leg.  There will be reasonable reduction in both work capacity and efficiency.  For the purpose of the ECO, Dr Kong took the view that the Applicant is suffering from 5% loss of earning capacity.

17.  Considering the medical evidence and the expert opinion of Dr Kong, which I accept, I allow the appeal against the Board’s certificate of review of assessment dated 29 December 2006.

Pre-accident income

18.  The Applicant was sacked by the Respondent 4 months after the latter’s criminal conviction.  In the Application, he claimed his pre-accident monthly income was about HK$22,000.  In court, he confirmed that the record of monthly income which he has filed with the MPF Authority is accurate.  According to such record, the income in the month preceding the accident was HK$19,438.  The average monthly income during the 12 months preceding the accident was HK$18,251.  I adopt the more favourable figure pursuant to section 11(1) of the ECO.

Section 9 compensation

19.  The Applicant was born on 30 November 1960 and was 44 years ago at the time of the accident.  The multiplier for assessing this head of compensation should be 72 (pursuant to section 7).  The section 9 compensation should be HK$19,438 x 72 x 5% = HK$69,976.80.

Section 10 compensation

20.  The total period of sick leave amounted to 725 days.  The compensation should be HK$19,438 x 4/5 x 725/30 = HK$375,801.33.

Section 10A compensation

21.  As far as medical expenses are concerned, the Applicant said he has incurred HK$950 at the Northern District Hospital and HK$2,540 at the Prince of Wales Hospital.  These are supported by receipts.  The total was HK$3,490.

Summary

22.  The compensation is assessed as follows:

Section 9 compensation	HK$	69,976.80
Section 10 compensation	HK$	375,801.33
Section 10A compensation	HK$	3,490.00
TOTAL :	HK$	449,268.13

ORDER

23.  Judgment is entered in favour of the Applicant in the above sum together with interest thereon at half judgment rate from the date of the accident (13 October 2004) to today.  Interest since today until full payment shall run at the judgment rate.  I also make a nisi order that the Respondent shall pay the Applicant’s costs of this application, including any costs reserved, to be taxed, if not agreed.  The Applicant’s own costs shall be taxed in accordance with the legal aid regulations.  This costs order shall become absolute in the absence of an appointment to argue costs in 14 days.