YIP FONG MING v. JOINT-EFFORT ENGINEERING CO. AND ANOTHER

HEAD NOTE

Industrial Law -

    Employees' compensation - assessment of loss of earning capacity under S.9 of the Employees Compensation Ordinance for - non-schedule injury - appeal under Section 18 against the assessment of the Assessment Board.

    The Applicant suffered injuries for which the Respondents admitted liability under the Employees' Compensation Ordinance. The Assessment Board assessed his loss of earning capacity at 10% which was on review increased to 11% The Applicant claims for employees' compensation and appeals under Section 18 of the Ordinance against the assessment of the Assessment Board. His own doctor assessed his loss of earning capacity at 15% - 20%.

Held -

1.    When assessing percentage of loss of earning capacity for injury not included in the First Schedule of the Employees Compensation Ordinance, the Court has got to start afresh, whether there is an appeal under Section 18 of the Ordinance or otherwise and assessment by the Assessment Board or indeed by any other medical practitioner shall only be one of the matters to be taken into consideration.

2.    When the injuried employee is capable of returning to his pre-accident employment, and therefore suffers no actual loss of earning, the Court should compare his bodily impairment arising out of his injury with the various bodily impairment listed in the First Schedule and the assessed percentage of loss of earning capacity should reflect as far as possible the fixed percentage for comparable schedule injuries. In this regard assessment by medical practitioner and/or the Assessment Board will be most helpful.

3.    When the Employee is no longer capable of returning to his pre-accident employment, the Court will ascertain what employment the employee is capable of with the impairment, which employment the injured employee is reasonably expected to take up and what earning he can reasonably be expected to be paid with such employment.

    The earning can then be compared with the earning that he would be able to make but for the injury and the comparison will produce a figure which is indicative of the Employee's loss of earning capacity

4.    In considering a suitable employment for the injured employee, the Court should have regard for his personal background and circumstances, the likelihood of improvement or deteriation of his physical conditions, the prospect of improved skill or achieving further qualification, thus reducing the impact of the physical condition on his earning capacity, etc.

5.    The Court should also have regard to the provisos to Section 9(1)(b) of the Employees' Compensation Ordinance that the assessed percentage of loss of earning capacity for injury to and not loss of any part of the body specified in the schedule must not exceed the appropriate percentage for the loss of such part and that it should reflect as far as possible the scale of percentages specified in the Schedule.

6.    The loss of earning capacity is assessed to be 22% and the award is made accordingly.

IN THE DISTRICT COURT OF HONG KONG

CIVIL JURISDICTION

EMPLOYEES' COMPENSATION CASE NO.128 OF 1988

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J U D G E M E N T

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1. The Applicant YIP Fong-ming was employed by the 1st Respondent Joint Effort Engineering Co. as a plumber at a construction site at Shatin Town Lot 5 Phase 2, and at the material time, the 2nd Respondent Jardine Engineering Corporation Ltd. was the principal contractor of the said site.

2. On 2.6.1986 when the Applicant was so employed he fell from a height of about 2 meters from an H-frame upon which he was standing and as a result both his ankles were fractured.

3. Application was made by the Applicant against both Respondents for employees' compensation under Sections 9, 10 and 10A of the Employees' Compensation Ordinance (the Ordinance). Liability had been conceded by both Respondents and the only issue is the amount of compensation.

4. Indeed, it was further agreed by the parties that compensation under Section 10 had been fully paid and the compensation payable under Section 10A had been agreed at the sum of $36.

5. The only outstanding matter is the compensation payable under Section 9 of the Ordinance which of course depends on the percentage of the loss of earning capacity caused by the Applicant's injury.

6. The Applicant had been issued with a certificate of Assessment dated 28th of September 1988 under Section 16F of the Ordinance which certified that the Applicant suffered a 10% loss of earning capacity, which certificate was subsequently cancelled by a certificate of Review of Assessment dated 26th January 1989 issued under Section 16G(3) of the Ordinance.

7. The certificate of Review of Assessment Certified that the Applicant's loss of earning capacity should be 11%

8. The applicant seeks to challenge the assessment of 11% of loss of earning capacity by way of an appeal under section 18 of the Ordinance.

9. As the Assessment Board hear no evidence, keep no record and give no reasons for their assessment, the Court in dealing with an appeal under Section 18 of the Ordinance to assess the percentage of the Applicant's loss of earning capacity has got to start afresh.

    (See the Judgment of Hunter J.A. in CHAN Kit v. SAM WO Industrial Manufactory, Civil Appeal No. 140 of 1988 at p.5)

10. Section 16H of the Ordinance provides that a certificate issued under Section 16F or 16G of the Ordinance shall be evidence of the matter stated therein and such certificate is by no mean conclusive on such matters.

11. The Court in assessing loss of earning capacity have to consider all relevant matters and the certificate is only one of such matters.

12. For all practical purpose when the Court assess percentage of loss of earning capacity for injury not included in the First Schedule of the Ordinance, it has got to start afresh whether there is an appeal under Section 18 of the Ordinance or otherwise and a certificate issued under Section 16F or 16G of the Ordinance or indeed assessment by other medical practitioner shall only be one of the matters to be taken into consideration.

13. Two medical reports had been admitted by consent. One by Dr. W.S. Chan dated 17.5.1988 and one by Professor Leung of Orthopaedic and Traumatic Surgery Department, Faculty of Medicine of The Chinese University of Hong Kong dated 18th July, 1988.

14. Dr. Chan described the Applicant's condition as follows :-

    "Mr. Yip Fong Ming was first admitted into our Unit on 2.6. 1986 because of bilateral fracture of os calcis The left side fracture was fixed up by open reduction and screw fixation while the right side fracture was treated conservatively.

2.    However patient wad suffering from persistent right heel pain for the subsequent one year. So much so that a subtalar fusion of the right subtalar joint was performed on 15.9.1987. Thereafter patient was receiving rehabilitation training with gradual improvement observed.

3.    Patient wad last seen on 6.5.1988. He wad able to sustain weight bearing walking.

4.    No permanent disability wad expected. Though he might not be fit for very heavy manure labouring in the future."

15. When Dr. Chan was asked in Court to explain what he meant by "no permanent disability wad expected". He said he was confining himself to the physical disability aspect in that if a patient can walk properly and can perform daily function himself, he can be described as having no permanent disability.

16. Professor Leung's report gave a more detailed account of the Applicant's condition as follows :-

    "He sustained fracture of the os calcis (heel bone of both sides).

17. The nature of the fracture on the left side was a very severe one since the bone broke up into many pieces and the fracture lines passed through the joint surfaces of the heel bone. This heel was therefore explored surgically and the fragments of bone were put back together and fixed with a number of screws after surgery. The healing had been satisfactory although the nature of the fracture has made perfect restoration impossible as the bone became flatter and boarder.

18. The right heel bone was less severely affected as the fracture line did not produce much displacement of the fragments and the articular surface was reasonably maintained. Only plastering to keep off the pain was therefore given as treatment.

19. When properly assessed in October 1986, the operated heel (left) was found to have pain and tenderness on prolonged walking while the right one could not tolerate walking at all. X-ray showed early degenerative changes in the right talo-calcaneal joint which must have resulted from the injury. In view of the severe symptoms, the patient was suggested on a subtalar fusion. This operation was done in September 1987 after which pain over the right angle nearly disappeared totally.

20. The present problem included the following:

(1)     Prolonged walking (10 minutes) led to pain over the heel of the left side and discomfort over the right side.

(2)     The pain over the left heel occurred only on walking. There was no pain at rest.

(3)     Movements of the ankles on both sides were satisfactory but subtalar motion was absent on both feet.

(4)     The left heel bone was felt to be board and flat. Squeezing produced tenderness.

(5)     Local pressure on right heel did not produce any problem.

(6)     Mr. Yip's job used to involve heavy load-lifting and climbing up scaffoldings. I tend to agree with him that he should change his job.

Outlook for Mr. Yip:

(1)     Local tenderness from the deformed heel bone over the left side would persist. He should therefore avoid jobs that demand load-lifting walking or climbing. His working capacity has totally lost over such jobs but he should be able to work normally on other jobs without such demands.

(2)     His working and earning capacity, therefore, could be considered 15-20% loss of the original.

(3)     With limited weight bearing and perfect padding, he should be able to work normally."

21. In his evidence Professor Leung explained how he arrived at the figure of 15-20%.

22. He said his right foot was nearly normal but his left foot badly abnormal and he was hardly able to put his body weight on his left heel alone. As the percentage of loss of earning capacity for lost of 2 limps is 100%, lost of one limp would be 50%. The injury was 40-50% of loss of one leg. The loss of earning capacity by reason of such injury can be calculated as 40-50% of 50%.

23. Professor Leung thought if he recovered very well, the loss of earning capacity would be 15% and if he recovered less well, it would be 20%.

24. Professor Leung was of the view that the Applicant would be unsuitable for heavy load lifting type of work which demand a lot of walking, climbing and load bearing and he would be suitable for light duty work including lengthy walking with special shoes and that sedentary work and job as a watchman will not a problem.

25. A further 2-3 years observation would be required to see if he would be suitable for outdoor job which required a lot of walking as there was still room for improvement. Indeed a 3-5 years period would be required for the condition to be stablised by which time the Applicant would get used to the condition and will be painless and he would then be able to tell how much he could walk and how much weight he could bear.

26. Medical practitioners in assessing percentage of loss of earning capacity for injury not specified in the First Schedule of the Ordinance very often base their assessment on the percentage of physical disability and comparison is made with the injury specified in the schedule.

27. Such approach clearly is reasonable and logical, from the view points of medical practitioners. Indeed they can hardly do anything else particularly in the light of Section9(1) (b) (ii) of the Ordinance.

28. But physical condition is not the only factor affecting the earning capacity of an individual.

29. Other factors have to be taken into account. The wages actually being earned at the time of the hearing can be a relevant factor but it cannot be the sole basis of the assessment as there can be on the one heard malingering employee who simply refuses to take on any suitable job and on the other hand, sympathetic and generous employer who allows a salary for the employee whose earning capacity doesn't deserve such salary.

30. The law recognizes this by providing under Section 9(4) the following :

"In assessing the loss of earning capacity for the purposes of subsection 3(b), an Ordinary Assessment Board, a special Assessment Board or the Court, as the case may be may but shall not be obliged to give weight to any actual earnings of the employee earned after the accident causing the injury."

31. Sir Owen Woodhouse made the following observations in LAU Ho-wah V. YAN Chi-bui [1987] H.K.L.R. 1061 at P.1063 :-

"In ordinary language the concept of earning capacity is certainly not limited to the present or to be measured by some immediate and possibly quite fortuitous achievement. It is concerned with a continuing state, with the potential of an individual and so very much with the future as well." and at P.1064 :-

"Thus the assessed effect of a non-schedule injury must reflect the fixed statutory conclusions provided for the listed or schedule injuries. And that would not be possible unless the degree of bodily impairment itself could be compared - with the various bodily losses listed in the Schedule. Nor would it be possible if the issue were to be decided in advance (as in the present case) on the sole basis of wages actually being earned at the time of the hearing. So a matter of construction the various parts of s.9(1)(b) are not to be read progressively so that the comparison required by the second provise is made dependent, as the Court of Appeal thought, upon earlier 'proof of some loss of earning capacity in fact'. Instead they are interdependent and must be read together. Considered in this way it becomes clear, that while evidence of post-accident earnings may be taken into account as having some greater or lesser relevance when estimating the permanent significance of a non schedule injury, such evidence cannot by itself exclude the wider implications of the lost bodily function when related to the schedule injuries."

32. How then should the Court assess loss of earning capacity under the Ordinance?

33. When the injured employee is capable of returning to his pre-accident employment and therefore suffers no actual loss of earning, the Court should compare his bodily impairment arising out of his injury with the various bodily impairment listed in the First Schedule and the assessed percentage of loss of earning capacity should reflect as far as possible the fixed percentage for comparable schedule injuries.

34. In this regard, assessment by medical practitioner and/or the Board of Assessment will be most helpful.

35. On the other hand where the injuried employee is no longer capable of returning to his pre-accident employment, it will be necessary to ascertain what employment the employee is capable of with the impairment which employment the injured employee is reasonably expected to take up and what earning he can reasonably be expected to be paid with such employment.

36. The earning from such employment can then be compared with the earning that the employee would be able to make but for the injury and the comparison will produce a figure which is indi-cative of the employee's loss of earning capacity.

37. In considering a suitable employment for the injured employee, the Court should have regard for his personal background and cir-cumstances, the likelihood of improvement or deteriation of his physical conditions, the prospect of improved skill or achieving further qualification, thus reducing the impact of the physical condition on his earning capacity, etc.

38. Having said these, the Court must not ignore the fact that Employees' compensation depends entirely on the statutory provision and the proviso to Section 9(1)(b) of the Ordinance that the assessed percentage of loss of earning capacity for injury to and not loss of any part of the body specified in the schedule must not exceed the appropriate percentage for the loss of such part and that it should reflect as far as possible the scale of percentages specified in the schedule.

39. In the present case, Professor Leung is of the view that the Applicant cannot return to his previous job as it involved heavy load-lifting and climbing up scaffoldings. But there is still room for improvement and the outlook is that with limited weight bearing and perfectly padded shoes, he should be able to work normally.

40. The Applicant is only aged 33 years. He had been on sick leave for 2 years after the accident. He claimed to have tried to resume working on the advice of doctor, but he could only work 10-20 minutes and since then he had not done any work. He now helps out in his younger brother's factory office. He was vague in his evidence as to what he does precisely and on a completely fortutious and charitable basis, he was paid $3,000 a month by his younger brother. The Applicant seeks to convince the Court that he cannot have a regular employment because of his condition and he said he was happy with working in his brother's factory office and the pay he was getting and he had no wish tolook for alternative employment.

41. The Applicant appeared to the Court to be clearly malingering. His evidence is inconsistent with the medical evidence on his condition. At one stage he said he only worked 1-2 days in a week. Later he said he worked about 20 hours in a week and the maximum of 4 days in a week. There is no reasonable or logical explanation as to why he cannot work everyday. The Court is also satisfied that he had not tried to give a correct description of the nature of the work he does for his brother. The Court can attached little weight to the Applicant's own evidence.

42. There was suggestion that he can be a messenger in office or a watchman.

43. I do not consider such to be "suitable employment" in the light of the Applicant's age and background and there may not be much prospect for him to gain other qualification except perhaps to learn another skill which may be less demanding physically such as that of a painter or electrician. But that requires many more years of learning and apprenticeship.

44. I am inclined to take the view that a suitable employment for the Applicant will be that of an unskilled labourer or casual worker in construction business. He may have slight difficulty initially but when his condition improves with time and when it reaches its end stage, he will be capable and suitable for such employment.

45. There is evidence from Miss Chan Ka Wah of the Census and Statistics Department that the different between the earning of a unskilled labourer and that of a plumber is about 20%

46. The court also take into consideration the fact that the Applicant may have to wait for his condition to reach its end stage and the prospect of acquiring another skill. The court also take into consideration the assessment by the medical Board and that of Professor Leung as well as the proviso to section 9(1)(b) of the Ordinance.

47. The court assess the loss of earning capacity of the Applicant at 22% and the compensation under section 9 of the Ordinance is therefore assessed at 22% of $341,000.00, the amount for permanent total incapacity, namely $75,020.00.

48. The compensation payable under Section 10A had been agreed at $36.

49. The total compensation is therefore assessed to be $75,056.00.

50. In deference to counsel's argument, the Court feel obliged to deal with one point raised by Mr. Paldwin. On behalf the Applicant, Mr. Paldwin urged the court to adopt a formula purportedly laid down in Hong Kong Paper Mills Ltd v. CHAN Hin-wa [1981] 7 H.K.L.R. 556 namely :-

    where 'a' is the earning capacity at the time of the accident in any employment of which the workman is now capable,

51. 'b' is the earning capacity at the time of the accident and;

52. 'c' is the compensation payable upon permanent total incapacity.

53. Mr. Paldwin suggested that before the accident the Applicant was earning $4,420 a month and he is now only capable of earning $3,000. The compensation should therefore be

		3,000
$341,000	x	-------
		4,420

54. With respect, Sir Alan Huggins V. P. in the Hong Kong Paper Mills Ltd. case (supra) was only trying to deduce a equation that he thought section 9(1)(b) intended.

55. Such equation, if interpreted in the way Mr. Paldwin suggested, has a fundamental fallacy that the more the employee earned after the accident, the more his compensation will be and if he is 100% disable in that he cannot earn anything he will get no compensation at all. Such could not possibly be the right approach and the Court is certainly not going to follow such an approach.

56. I feel, with no disrespect, that a mistake had been made and the intended equation should be: