PUN WAI MING v. TSANG CHUNG KAI

CACV 301/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 301 of 2008

(On Appeal from DCEC No. 946 of 2006)

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J U D G M E N T

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Hon. Yeung JA:

1.  I have the benefit of reading the draft judgment of Yuen JA.  I agree with her judgment and an order is made in terms of paragraph 19 hereof.

Hon Yuen JA:

2.  This is the Respondent’s appeal from a judgment of District Judge Mimmie Chan given on 7 August 2008 awarding employees compensation to the Applicant. 

Background

3.  The Applicant claimed that he was employed by the Respondent as a cross-border lorry driver and that he slipped and fell when he was alighting from the lorry at the customs point at Man Kam To in the Mainland.  He injured his elbow and was assessed to have suffered a 3% permanent loss of earning capacity.

4.  The Respondent denied that the Applicant was his employee.  His case was that the Applicant was an independent contractor.  As a fallback, the Respondent’s case was that even if the Applicant was his employee, the injury sustained did not arise out of and in the course of his employment.

5.  The trial took 3 days.  Both parties were represented by counsel.  The judge reserved her decision and handed down an 18- page judgment in which she discussed the issues and evidence in detail.  The judge found that the Applicant was an employee of the Respondent and that the accident did arise out of and in the course of his employment.  The judge awarded the Applicant compensation in the sum of $63,107 with interest and costs.

Ground of appeal

6.  The Respondent appealed on two grounds:

(1)     that in finding that the Applicant was employed by the Respondent, the judge failed to take any or any sufficient account of evidence that the Applicant had delegated (or had been permitted to delegate) some of his driving duties on the Mainland to a person called Ah Kwai;

(2) that in finding that the Applicant’s injury arose out of and in the course of employment, the judge was wrong to accept as credible the Applicant’s evidence as to when and how he was injured, in the light of evidence from Li Fu Pen that when the lorry was being loaded earlier he (Mr Li) had seen someone else whom he took to be the driver.

First ground of appeal

7.  The first ground of the Respondent’s appeal involves the issue of delegation (actual or permitted) of some part of the Applicant’s driving duties to a driver in the Mainland.

8.  The judge accepted the Respondent’s evidence that the Applicant had introduced him at a restaurant to a person called Ah Kwai and had told him that Ah Kwai “was the employee Mr Pun [the Applicant] had hired to assist him in delivering goods in China” (para. 21).  The judge must have accepted that “delivering goods”  entailed some driving by Ah Kwai as she said:

“It is not for this court to speculate what commercial or other practical benefit [the Applicant] could obtain by an assistant to drive the lorry after it crossed the border into China.  Suffice it to say that from the evidence, it does not appear to be an impossible task for an assistant driver to be involved at some stage of the transportation” (para.25); and

“ ... I consider that there may be some ring of truth to [the Respondent’s] account of his meeting with [the Applicant] and Ah Kwai, and the fact that [the Applicant] had a driver to assist him in China” (para.27).

9.  The judge did take this factor into account when she was considering the many features of the relationship between the Applicant and the Respondent (para. 29) before deciding that the Applicant was an employee.

10.  In this respect the judge held (para. 33):

“The fact that [the Applicant] can hire a driver to do his work creates more difficulties.  If [the Applicant] can delegate his work to Ah Kwai, instead of providing his own skill and service in the performance of his work under his agreement with [the Respondent], it may be inconsistent with their relationship being a contract of service.  However, the evidence presented in this case is not clear as to how Ah Kwai was involved in [the Applicant’s] work or the extent to which Ah Kwai was involved.  According to [the Respondent], when he was introduced to Ah Kwai, [the Applicant] had simply said that Ah Kwai was employed by [the Applicant] ‘to assist him to deliver goods’ in China. [The Respondent] did not elaborate further what this meant.  Mr Li’s evidence does not shed further light on this.  He only said that on one occasion, he had seen someone other than [the Applicant] in the lorry whilst it was in the loading area.  He did not say that someone other than [the Applicant] was driving the lorry on the day in question.  I do not consider that there is sufficient evidence for me to find that [the Applicant] had delegated his driving services to someone else, to the extent that it can support the existence of a contract for services”.  (Emphasis added).  

11.  In my view the judge was entitled to take this approach.  The Respondent’s counsel has not cited any authorities to the effect that any assistance, however minimal, received by an employee from a person he hired would be conclusive evidence against a finding of employment.  In Express & Echo Publications Ltd v Tanton [1999] ICR 693 the driver had the absolute right at his discretion to arrange for a substitute driver at any time.  The Court of Appeal held that it was a contract for services.  In the judgment the court referred to McKenna J’s judgment in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, 515 where he said:

“Freedom to do a job either by one’s own hands or by another’s is inconsistent with a contract of service, though a limited or occasional power of delegation may not be: see Atiyah’s Vicarious Liability in the Law of Torts (1967), pp. 59-61 and the cases cited by him”.

The court in Express & Echo v Tanton noted that the passage “without the qualification in the last sentence” was quoted with approval by the court of appeal in another case, but it did not suggest that the qualification in the last sentence was wrong.

12.  In the absence of authority that any assistance or delegation would be conclusive against a contract of service, the judge had to look at the evidence on this issue (and in this case there was no evidence as to how Ah Kwai was involved in the Applicant’s work or the extent to which Ah Kwai was involved) together with all the other evidence in the case before the court. 

13.  In this respect it is important to bear in mind what the Applicant’s work entailed.  He was the sole registered driver of the cross-border lorry in question.  At the control points both in Hong Kong and the Mainland, a driver’s documents are checked to ensure that the lorry is driven by the registered driver.  Therefore for a Hong Kong - Mainland - Hong Kong round trip, the Applicant would at least have to drive the lorry from Hong Kong to the control points in Hong Kong and the Mainland on the outward leg, and again from the control points in the Mainland and Hong Kong and back in Hong Kong on the return leg.  As for the part of the journey on the Mainland, the Respondent’s own evidence was only that Ah Kwai was introduced to him as someone who would “assist” the Applicant in delivering goods, and even if that were to be regarded as including driving, that would still mean that the main bulk of the driving work would still be done by the Applicant.  This distinguishes this case from Express & Echo v Tanton.  In light of the factual matrix in the case before us, I do not think this court can say that the judge was wrong in her decision. 

Second ground of appeal

14.  The second ground of the Respondent’s appeal challenges the judge’s acceptance of the Applicant’s evidence as to how he was injured.  He said that he parked the lorry at Man Kam To Customs and slipped when climbing down from the lorry to collect customs declaration documents. 

15.  The Respondent sought to challenge this evidence by calling Mr Li, a staff member of a mainland company.   He was responsible for preparing customs declaration documents for his company’s goods to be transported to Hong Kong.  He had asked the Respondent to send a lorry to collect some goods for transportation to Hong Kong.  In due course he supervised the loading of the goods onto the lorry with a person whom he took to be the “driver”.  Afterwards he was telephoned by someone claiming to be the driver of the lorry asking him to bring the custom declaration documents.  When he did so he saw that this man was not the “driver” he had seen earlier when the goods were loaded.  The man who had telephoned him was standing beside the lorry and asked him to hand over the documents to the customs officer immediately as his arm was painful and he did not want to wait anymore.   

16.  The person who was complaining about the painful arm was the Applicant, and the Respondent argued that since Mr Li said he had seen a different “driver” when the goods were loaded, that proved that the Applicant had not been driving the lorry earlier and therefore the judge should not have accepted his evidence as to when and how he was injured.  

17.  It is true that the judge did not refer to Mr Li’s evidence in connection with the second ground of appeal but only in connection with the first ground.  However there is nothing in the second ground.  The judge accepted the Applicant’s evidence as to how he was injured.  It is well-established that an appellate court should be very slow to interfere with findings of primary fact.  As Lord Hoffmann said in Biogen Inc v Medeva plc [1997] RPC 1 and repeated in Piglowska v Piglowski [1999] 1 WLR 1360:

“The need for appellate caution in reversing the trial judge’s evaluation of the facts is based upon much more solid grounds than professional courtesy.  It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impressions which was made upon him by the primary evidence.  His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance .... of which time and language do not permit exact expression, but which may play an important part in the judge’s overall evaluation”.  (Emphasis added).

To this, Bokhary PJ added in Ting Kwok Keung v Tam Dick Yuen [2002] 1 HKC 601:  

“Where the judgment turns on an issue of fact, the Court of Appeal must have regard to the nature of that issue of fact.  And it must have regard to the advantages enjoyed by a trial judge who received the evidence on such an issue at first-hand, in other words, in whose presence the whole of the evidence unfolded in its living state.  Such advantages can be, as Lord Shaw of Dunfermline put it in Clarke v Edinburgh Tramways at p.36, ‘sometimes broad and sometimes subtle’.  The question for the Court of Appeal is whether, even though it does not enjoy the advantages enjoyed by the trial judge who received the evidence at first-hand, it is nevertheless satisfied that his conclusion on the facts is plainly wrong.  The Court of Appeal should intervene if so satisfied.  But if not so satisfied, the Court of Appeal should defer to the trial judge’s conclusion even if in some doubt as to its correctness”.  (Emphasis added)

18.  Mr Li’s evidence in fact supported the Applicant’s case that he had injured his arm before getting the customs declaration documents.  It might have been different if the Applicant’s case was that he had injured his arm at the time when the goods were being loaded as Mr Li said he saw a different “driver” then, but that was not the Applicant’s case.  In any event Mr Li did not explain why he considered that the person he had seen earlier during loading was the “driver” of the lorry.  He (Mr Li) only handed him some documents for the goods.  There was no evidence as to what that person said or did which led Mr Li to make that assumption.  Accordingly there is nothing in this ground either. 

Order

19.  I would dismiss the appeal and order the Respondent to pay the Applicant’s costs of the appeal.  The Applicant’s own costs are to be taxed in accordance with legal aid regulations. 

Hon. Lam J:

20.  Subject to what I have to say below regarding the first ground of appeal, I agree with the judgment of Yuen JA.

21.  Counsel for the appellant did not seek to argue against the principle of law in McKenna J’s judgment in Ready Mixed Concrete as regards the possibility of having a contract of service where the employee can delegate occasionally or in a limited extent some of his duties to others. The relevant part of the judgment was cited at paragraph 11 of the judgment of Yuen JA. 

22.  A similar statement of law can also be found at para.39-022 of Chitty on Contracts Vol.II, 30^th edn. At that paragraph, the learned editors cited Robinson v Hill [1910] 1 KB 94 where the following proposition was assumed to be correct,

“a person may possibly be an employee, although he himself (with the permission of the employer) employs assistant to help him.”

  The facts of that case bear some resemblance to our case. The employer baker engaged a vanman to deliver bread to his customers. The vanman, for his own convenience and benefit employed a child to assist him. The vanman paid the wages of the child. The engagement formed no part of the arrangement between the employer and the vanman though the employer was aware of that but only during permitted hours. The case concerns the prosecution of the employer in respect of the employment of the child outside permitted hours. The focus of the court in that case was whether the employer was employing the child outside permitted hours. He was acquitted and the acquittal was upheld on appeal. In the short judgment of Lord Alverstone CJ, His Lordship proceeded on the basis that the employment of the child could be brought about by the vanman as the agent of the employer. However, since there was no knowledge on the part of the employer regarding the child being employed during the prohibited hours, it was held that there was no evidence of a contract of employment of the child on behalf of the employer during those hours. Hence, there was no discussion on whether in such circumstances the vanman should be regarded as employee or independent contractor.  

23.  That case was also cited by Atiyah’s Vicarious Liability in the Law of Torts (1967) pp.59-61, an authority in turn cited by McKenna J in Ready Mixed Concrete.

24.  On the other hand, the editors of Chitty on Contracts, Hong Kong Specific Contracts, 2^nd Edn. summarized the position as follows at para.7-010,

  “Employees are exceptionally unlikely to be able to delegate their responsibilities under the contract to a third party.”

25.  I have looked at some authorities cited in these textbooks and most of them appear to be cases where the employer could be regarded as delegating to the employee to engage assistants on his behalf. In that scenario, the employer would also be the employer of the assistant engaged by the employee.

26.  I do not wish to express a final view of my own in this judgment whether the same principle applies when the employee cannot be regarded as engaging the assistant for the employer. Counsel for the appellant did not draw such a distinction in accepting the principle of law mentioned above and no reference was made to the relevant cases in the course of submissions. Given the relatively modest amount involved in this appeal, I do not deem it appropriate to re-open the appeal for further submissions. 

27.  I agreed with my lady that the Court of Appeal in Express & Echo v Tanton dealt with a situation where the employee was contractually entitled to delegate completely the performance of the duty to another person and this is not the situation we are dealing with. I have also read the judgment of the Court of Appeal in Nethermere (St Neots) Ltd v Gardiner [1984] ICR 612 at p.623, referred to by Peter Gibson LJ in Express & Echo v Tanton. That earlier judgment also did not shed any light on the situation here.

28.  For my part, if it was established that Mr Pun was contractually entitled to delegate substantially the driving duty in mainland China to another driver engaged by Mr Pun as his own employee, that would go a long way in establishing that the contract between Mr Pun and Mr Tsang was a contract for service.

29.  But the finding of the learned judge at paragraph 33 of her judgment was that it is not clear as to how Ah Kwai was involved in Mr Pun’s work, or the extent to which Ah Kwai was involved. We were taken to the witness statements and the transcript. Having read those again, I agree with my lady that the learned judge was entitled to come to such conclusion. There is no evidence as to the terms of engagement of Ah Kwai as between him and Mr Pun. The evidence as regards Ah Kwai’s duty in respect of driving is minimal. Though it might be open to the learned judge to draw inference from Mr Tsang’s evidence as to the conversation he had with Mr Pun when Ah Kwai was introduced, she was equally entitled to decline to draw an inference that Mr Pun had delegated his substantial driving duties to Ah Kwai in the light of the wordings in Mr Tsang’s witness statement. At the end of paragraph 33, the learned judge said,

  “I do not consider that there is sufficient evidence for me to find that   Mr Pun had delegated his driving services to someone else, to the   extent that it can support the existence of a contract for services.”

30.  Like my lady, I see no justification for this court to interfere with that conclusion.   

31.  For these reasons, I agree that the appeal should be dismissed.