Law Yim Ming v. Cheung Hang Fook t/a Tung Lok Villa and Another

DCEC450/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES COMPENSATION CASE NO. 450 OF 2001

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J U D G M E N T

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1. This is an application for employees compensation. It is not disputed that on 6 September 1999 while the applicant was on duty at the villa two persons entered the villa and attacked the applicant. As a result, he was seriously injured. It is not disputed that the 1st and 2nd respondents were partners running a business of a motel by the name of Tung Lok Villa (hereinafter referred to as "the villa").

2. The applicant had been employed by the 1st and 2nd respondent to work in the villa as a cleaner or keeper. However, prior to the time of the injury of the applicant the respondents said the applicant had been dismissed by the 1st respondent. Accordingly, at the material time the applicant was no longer an employee of the 1st or the 2nd respondent. And after the said dismissal, the 1st and 2nd respondent sold or transferred the business of the villa to RW2. Hence they are not the employer of the applicant in any event.

3. I shall first deal with this line of the defence.

4. The applicant explained that he was introduced to work in the villa by Lee Yiu-keung, RW2, a cashier who also worked in the villa. The applicant was to show the rooms to the customers and to do cleaning. RW2 would provide prostitutes to the customers. When RW2 was on leave, the 1st respondent would sit in for RW2.

5. It is not disputed that on or about 23 August 1999 the applicant was arrested in the villa by the police and was subsequently charged for making a living relying wholly or partly on prostitution. He was subsequently convicted. The applicant explained that on that morning of 23 August 1999 a customer visited the villa and asked for a prostitute. He then went to see RW2 and sought his direction. RW2 made the arrangement and when the prostitute arrived at the villa, RW2 asked him to bring the prostitute to the customer. The customer was in fact an undercover agent of the police.

6. A few minutes later, the police arrived and the applicant was arrested. The applicant explained that he had informed the police that he was told by RW2 to bring the prostitute into the room. However, the police charged him but had not laid any charge against RW2 or even questioned him. The applicant said he was later bailed out by someone. He was told by the 1st respondent and RW2 that it would be a matter of a fine. They would pay the fine for him and if he had to serve any imprisonment, he would be paid $10,000.

7. It is the case of the applicant that notwithstanding this incident, he continued to be in the employment of the 1st and 2nd respondent. There was no dismissal.

8. The 1st respondent gave evidence and said he did not know about the said police raid on 23 August 1999. He said sometime in mid-August, which must mean sometime after 23 August, when he returned to the villa to collect the turnover he received a telephone call from an unidentified party who yelled foul language and demanded the applicant to pay a bookmakers debt. He was very angry and asked RW2 to explain. RW2 then informed him that the applicant had trouble with the police for making a living on prostitution and owed debts to illegal bookmakers.

9. As a result, the 1st respondent dismissed the applicant by giving one month's notice to the applicant. The 1st respondent said a few days after dismissing the applicant, he met a friend at the hallway outside the villa. He was told by that friend the applicant introduced a young and lovely prostitute to him at a room above the villa. He then saw the applicant coming down the stairs and confronted him about this incidence in the presence of his friend. The applicant admitted and he summarily dismissed the applicant in the presence of RW2.

10. It is the evidence of the 1st respondent that after the summary dismissal he and the 2nd respondent felt disillusioned about the business. They decided to invite outsiders to take over the business. They approached RW2 who said in his evidence that he was interested. As a result, RW2 and the 1st and 2nd respondents signed a take-over agreement on 28 August 1999, five days after the arrest of the applicant. RW2 requested this transaction to be kept as a secret so that the customers of the villa would not be lost.

11. RW2 gave evidence and said a few days after the arrest of the applicant the 1st respondent received a call in the villa. The 1st respondent was furious and asked him about the matter. He then informed the 1st respondent about the arrest of the applicant. The 1st respondent gave the applicant the usual one month's notice to quit, which I believe he meant one month's notice issued under section 7 of the Employment Ordinance. RW2 went on to say on 22 August 1999 at about 9 pm he heard shouting outside the villa. When he went out, he saw the 1st respondent scolding the applicant. He also witnessed the summary dismissal of the applicant by the 1st respondent and he was asked by the 1st respondent to calculate the wages of the applicant and to pay him on 1 September 1999 which he did.

12. In cross-examination RW2 admitted that the date 22 August 1999 is not correct. No exact date could be given.

13. RW2 said towards the end of August 1992, the 2nd respondent approached him to take over the villa. He saw that it had a business potential and agreed. On or about 28 August 1999 a take-over agreement was signed between him and the respondents. He requested the agreement to be kept as a secret.

14. It will be interesting to note some dates from the evidence of the respondents.

A) 23 August - arrest of the applicant by the police

B) A few days later from the arrest the 1st respondent dismissed the applicant under section 7 of the Employment Ordinance.

C) A few days later from the said dismissal, the 1st respondent dismissed the applicant under section 9 of the Employment Ordinance.

D) 23 August 1999 - a take-over agreement was signed.

E) 6 September 1999 - the applicant was attacked and injured.

15. A closer look of the sequence of events up to take-over shows that they could not happen altogether within a short period of time between 23 August and 28 August 1999. The question has been put to RW2 offering him a chance to explain. However, RW2 did not seem to understand the question. No explanation has been offered.

16. Further on, it was noted in the entry record of RW2 that he had travelled out of Hong Kong on 28 August 1999. Surely the exact time was not stated in this record produced by the respondents. It is the evidence of RW2 that in this period of time he travelled back to PRC to visit his relatives. He normally would leave Hong Kong very early in the morning. It is an area for RW2 to explain how or when he signed the take-over agreement on 28 August 1999.

17. Further on, during cross-examination RW2 admitted that he had given a statement to the police after the attack on the applicant. It was mentioned in his statement that he was a cashier of the villa. He was employed with a salary of $6,000. It was not mentioned that he was the proprietor of the villa. When he was first asked about the discrepancy between his evidence in court and his statement to the police, he said that he tried to hide some information from the police. He was worrying that since he was not the licence holder, he may commit an offence of running the villa. He had not arranged insurance to cover employees compensation as well.

18. At the end of the cross-examination RW2 then admitted again to the solicitor for the applicant that the information given to the police is true. RW2 adopted a swaying attitude in giving evidence. He is inconsistent in his answer and he has tried to explain himself out of the discrepancy in examination. He is completely unreliable. I do not rely on his evidence at all.

19. For the dismissal, there was more than one version from the respondents. In the original answer and the amended answer to the application the 1st respondent said, "Upon learning that the applicant committed the above criminal offence, the 1st respondent gave verbal notice to the applicant to terminate his employment with the 1st respondent on 31 August 1999. After notice of termination was given and until the last day of service, the applicant refused or failed to report for duty from time to time but the 1st respondent tolerated the applicant. In the afternoon of 1 September 1999, the 1st respondent paid the final salary to the applicant and the applicant officially ceased to work for the respondent."

20. It was only in the re-amended answer when the respondents set out the summary dismissal of the applicant. Paragraph 4 of the re-amended answer said: "At about 25 August 1999 the applicant was caught red-handed by the 1st respondent when the applicant lurked the customer of Tung Lok Villa to a room two levels up in the same building and introduced prostitute to the customer. On being hard pressed by the 1st respondent as to the applicant's attempt to tout customers away from the Tung Lok Villa and even introduced prostitutes to the customer, the applicant represented to the 1st respondent that due to the said dismissal by the 1st respondent the applicant was forced to run his own home-made business in competition with Tung Lok Villa to make ends meet, and further the introduction of prostitutes was a mere means for quick money which he had experienced before he was caught by the police. The 1st respondent was agitated and frustrated by the applicant's misconduct and immediately terminated his employment and demanded the applicant to leave Tung Lok Villa."

21. As pointed out by the solicitor for the applicant, the date so stated by the 1st respondent could not be correct. He only came to know the incident sometime after 23 August 1999. He then dismissed the applicant by one month's notice. It is a few days later when he summarily dismissed the applicant. It would be impossible for him to have dismissed the applicant on 25 August 1999. No explanation has been offered. This point may be taken as a mistake in timing but more important if the 1st respondent did dismiss the applicant summarily, it must be a very shocking incident. However, he never mentioned about this termination in the answer he filed until he re-amended his answer in May 2002. The only explanation is that his former solicitor had missed out a lot of information from his answer but this is not a missing out. He stated positively in his answer and re-amended answer that he tolerated the behaviour of the applicant until 1 September 1999 when he paid him his wages who then left.

22. There was no mention of the summary dismissal until the amendment in May 2002. Having considered all the evidence of the 1st respondent, I came to the conclusion that he was not a reliable witness at all.

23. The applicant summoned the 2nd respondent as his witness. He has produced his statement to the police and was asked questions thereon. There was no evidence on the assignment.

24. In summing up, the respondents failed to prove that they had dismissed the applicant before the accident. There was no credible evidence from the respondents that the business of the villa had been assigned to RW2 on or before 28 August 1999. I rule against the respondents on this line of the defence.

25. The second ground relied upon by the respondents is that the incident did not happen in the course of an employment. It is not disputed that the accident took place inside the villa. In the re-amended answer, the respondent admitted that RW2 re-employed the applicant. Since I found there is no transfer of business, if he was re-employed he must be re-employed as a worker for the 1st and 2nd respondents. I do not need to make this finding as I found earlier on that there was no dismissal as such.

26. It is the evidence of the 1st respondent, RW2 and RW3 that they have heard various threatening telephone calls from debt collectors or bookmakers. It is said that these debts are related to illegal bookmaking. It is not disputed that the applicant liked horseracing. According to the applicant, he bet sometimes on horses but he denied in his evidence that he owed bookmakers money.

27. Section 5(4) of the Ordinance provides that an accident arising in the course of an employee's employment shall be deemed in the absence of evidence to the contrary also to have arisen out of that employment. It is obvious that the attack on the applicant was an accident. It was not submitted that it was not and at the time of the attack the applicant was attending to his night-shift. The place of the attack is inside the villa at around the cashier counter. I found that it is an accident arising in the course of the applicant's employment. The presumption under section 5(4) does apply. It is not disputed that if the attack arises out of a private dispute between the applicant and his debt collectors or other parties, the presumption is rebutted. The burden rests on the respondents to rebut the presumption.

28. There is no direct evidence that the people who attacked the applicant were sent by the debt collector or related to private dispute between the applicant and third party. On the direct evidence, the strongest evidence comes from RW3. He said that on 5 October 1999 he visited the villa to collect the licence rental from RW2 on behalf of the 1st respondent. Upon meeting RW2 he found the applicant was also present with both hands in bandages. The applicant admitted to him that he was injured because he owed money to debt collectors and asked him to fill out the form 2. This is denied by the applicant.

29. I note in the evidence of RW2 that he admitted that after the accident he did not have a meeting with RW3 when the applicant was also present. He remembered RW3 coming to collect turnover once but the applicant was not present. Further, I found that RW3 is not a credible witness. To say the least, according to his own evidence, he filled out the form 2 containing false information with a view that the applicant may recover compensation from government. Even when not entitled, as he said, to fill out the form on behalf of the 1st respondent what he had been doing is either fraudulent or at least grossly negligent with no regard to any other party that might be affected by his statement. I found that he is not a reliable witness at all.

30. In conclusion I found that there is no direct evidence. I did not find the 1st respondent or RW2 reliable and I did not find that there was any telephone call to the villa as they alleged. Further on, on the allegation that there had been threatening calls, the respondent rely heavily on the evidence of RW2. However, I found that the evidence of RW2 is unreliable. In any event, he had not, in giving statements to the police when he was invited to give information to assist in the investigation of this attack, informed the police of such threatening telephone calls which must be of utmost importance to the police investigation. In summing up, I found that there was no credible evidence on these threatening telephone calls.

31. Counsel for the respondent invited me to draw the inference from the fact that the applicant brought prostitute to the villa on the day when he was so charged and on the fact that he liked to gamble on horses to reach a conclusion that on the balance of probability this attack is due to his personal affairs. Counsel for the respondents referred me to two Hong Kong cases. In Tsang Yuk-chung v China Fleet Corp. WCC, a cook was killed as a result of a knife attack by a fellow cook in the kitchen. The evidence revealed that there was the sound of swearing by the other cook followed by loud noises. When the witnesses entered the kitchen, they saw the deceased on the ground being struck repeatedly by the other cook. There was no evidence of any prior dispute or bad feeling between the two men. Bewley DJ as he then was held that the presumption applied. He said: "Choosing between an inference that the attack arose out of a private dispute and an inference that arose out of dispute about cooking or some other matters connected with the deceased's work were nothing more than a guess. I cannot say that there is evidence of the former which I could leave to a jury."

32. Counsel for the respondents submitted that I should not follow this case. He also referred me to another case Wong Gum-fok v Mclean. Here the deceased was an amah whose body was found in her employer's premises. She had been murdered by strangulation and knife wounds. Nothing had been stolen but there was evidence of straws in the bedroom and kitchen and the refrigerator door being opened. Hopper DJ as he then was held the presumption was discharged. He held that where a young amah was murdered in her employer's premises where she worked by strangulation and knife wounds and nothing was stolen, there was some evidence from which it is possible to infer that the accident was unconnected with her employment. Counsel for the respondent invited me to follow this comment by Hopper DJ.

33. I must note that the able ruling of Hopper DJ had been commented by the Court of Appeal in Fong Fung-ying v AG. It is commented by the Court of Appeal that such was not sufficient to justify a jury in drawing the inference that it did not arise out of the evidence. Sir Alan Huggins VP as he then was stated in the judgment that Wong Kam-fuk's case should not be followed in future. This attitude was equally adopted by H H Judge Cheung as he then was in Yue Sang dependent of the deceased Yu But v International United Shipping Agency Limited.

34. Though in the present case no money or property had been stolen but that would not be sufficient to suggest that this is a private dispute of the applicant and to rebut the presumption. I shall also refer to a judgment by H H Judge Li in DCEC 797 of 2000. This is an action where the applicant worked for an estate agency. While he was staying inside the office of the estate agency, a gang rushed into the respondent's office and attacked the applicant and some of his colleagues. In considering liability H H Judge Li made the following comments: "Even if the applicant was singled out for attack, there is no admissible or reliable evidence that was due to personal grudges. The applicant might have unwittingly offended a business competitor who sought to ventilate his grievance by violent means. The fact that the attack was carried out at the office rather than the applicant's home or outside the office is ground to hold that on the balance of probability the attack was business related."

35. There is submission by the respondent that the evidence of the applicant in saying that the attackers asked for 'lo sai hai m hai do' was not mentioned in his statement to the police. I accept his explanation that when he was giving his statement to the police he was in the hospital and in the very early stage of recovery. But even if he had made a mistake, this is not going to advance the respondent's case.

36. I share the wisdom of H H Judge Li and I also hold that the fact that the attack took place in the villa and not outside the villa is ground to hold that on the balance of probability the attack was business related.

37. In any event, I conclude that the respondents have failed to prove that the attack does not arise out of the employment or due to personal dispute by the applicant with third party. In the circumstances the presumption stands and the accident must be deemed to arise out of his employment. Since the 1st and 2nd respondents are partners, they are jointly and severally liable to the applicant for the employees compensation and just to repeat myself as I have found that they have not transferred the business to RW2 they will still be responsible for paying the employees compensation to the applicant.

38. I now turn to another issue in dispute; the quantum of the compensation.

39. All the elements in assessing quantum is agreed except the monthly wages of the applicant. The applicant said that before working for the respondent he was a construction site worker. Later he worked in a warehouse earning about $12,000 per month inclusive of overtime payment. In April 1999 he was introduced to RW2 and worked in the villa at a salary of $15,000 a month inclusive of overtime payment. The working hours was from 7 pm to 7 am. He said for normal workers they worked for eight hours a day. Therefore, for the four hours of additional work he was paid overtime and was included in the said $15,000. He had to work 28 days a month.

40. In further support of his case that he earned $15,000 a month he produced a form 2 which was signed by RW3. It was stated thereon that his wages was $15,000 per month. The respondents produced a list of earnings showing that the applicant had a monthly salary of $8,000 only. It is submitted by the respondents' counsel that there is no evidence to suggest that RW3 had the authority to sign the form 2 on behalf of the respondents and therefore this document is not binding on the respondents. The point was put to the applicant's solicitor and I did not hear any good reply. I share the view of the respondents' counsel that this document is not binding on the respondents.

41. Besides his oral evidence, the applicant had not produced any evidence to support his case that he earned $15,000 a month. There was also no evidence in support of his contention that he earned $12,000 previously when he was working in a warehouse. I also noted that in the statement he gave to the police on 9 September 1999 when he was in the hospital the applicant told the policeman that he was a cashier in the villa earning $9,000 per month. There was no explanation as to the discrepancy in his statement with his statement produced in court.

42. In the circumstances I do not find in favour of the applicant on his claim of monthly salary at $15,000 and I will adopt the admitted figure of $8,000 per month submitted by the respondent in assessing the compensation payable to the applicant.

43. Now I come to the assessment. The applicant is claiming compensation under section 9, 10 and 10A of the Ordinance. Under section 9, the applicant was assessed on 29 May 2001 to have suffered 38 per cent loss of earning capacity permanently caused by the injury. Since there is no appeal against this assessment, parties are bound by this assessment and the compensation payable to the applicant who was 38 of age at the time of the injury is as follows: $8,000 times 96 times 38 per cent and I have the figure of $291,840. I would urge both of you to double-check the calculation before I finalise the figures. Sometimes I do make mistakes in the calculation.

44. Under section 10 the applicant is entitled to be paid four-fifths of his wages throughout the sick leave period. He was on sick leave for 17 months. All the sick leave certificates have been produced and not disputed. The compensation under this section is therefore $8,000 times 17 times four-fifths and the figure I arrive at is $108,800.

45. Under section 10A the applicant is entitled to reimbursement of his medical expenses reasonably incurred as a result of the accident. He incurred $400 and there was no receipt but this amount was not disputed, so I award the $400 accordingly.

46. The applicant also claimed interest at half judgment rate which I will award accordingly and the current interest rate is 8.14 so half of it is 4.07 per cent per annum from the day of the accident up to the day of judgment and thereafter at judgment rate until full payment. The applicant should also be entitled to costs of this action against the respondents to be taxed if not agreed and the applicant's own costs are to be taxed in accordance with Legal Aid regulations.