DCEC 1252/2016
[2022] HKDC 639
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
EMPLOYEES’ COMPENSATION CASE NO 1252 OF 2016
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BETWEEN
| | YIP LAI HEUNG (葉禮香) | Applicant |
and |
| | 伍炳榮 | 1st Respondent |
| | 陳宇民 | 2nd Respondent |
| | TSE CHUNG FAI (謝重輝) | 3rd Respondent |
| | LAND BUILDER LIMITED
(宏建有限公司) | 4th Respondent |
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Before: His Honour Judge KC Chan in Court
Dates of Hearing: 1-5 February and 20 May 2021
Date of Judgment: 29 June 2022
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JUDGMENT
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1. On 4 December 2014, the applicant sustained injuries in a work accident. He commenced this application to claim employees’ compensation. The main issue in dispute over liability is whether the applicant was self-employed, and if not, who of the 4 respondents was his employer.
2. At trial, all parties appeared by counsel, namely and respectively, Mr Gary KH Chung for the applicant, Mr Alfred Cheng for the 1st respondent (“R1”), Mr Wong Chi Kwong for the 2nd respondent (“R2”) and Mr Jerome Liu for the 3rd and the 4th respondents (“R3” and “R4” respectively).
Background, the accident, the injury and some events post-accident
3. Unless otherwise stated, the matters narrated below are not seriously disputed.
4. R4 was incorporated in 2007. Since then, it has remained dormant until the events relevant to the accident.
5. R3 has been R4’s only shareholder and director. He has been working in the construction/renovation industry since 1992. Between 2005 and 2008, he owned and ran a limited company dealing in marble stone as a construction material. Since 2009, R3 took over from his father the operation of one 濯新記工程公司, which undertook sizable and high-end renovation projects, was operated not only by R3 but together with other partners, and was unconnected to and has no business dealings with R4.
6. In about November 2014, R3 was minded to start operating a business dealing in water proofing materials with R4 as the vehicle. For that purpose and by a Chinese tenancy agreement dated 25 November 2014 entered with China Funding Limited (“CFL”)[1], R4 rented from CFL the premises known as Unit B, 3rd Floor, No 2R Sai Yeung Choi Street, Mongkok for a term of one year. It was R3 and R4’s case and evidence, not seriously disputed, that days later R4 also rented Unit A on the same floor from CFL, who also owned the same, to use the said Unit A and Unit B (together “the Premises”) as its shop, showroom and storage facility. R4 then obtained permission from CFL to demolish the partition walls separating the 2 units (respectively “the Partition Walls” and “the Demolition Work”) so as to use the Premises as one larger unit.
7. On 3 December 2014, R3 telephoned R1 to enlist his help to perform the Demolition Work (“the 1st R3R1 Conversation”). The contents and the purport of this conversation are controversial. I will refer to them in due course.
8. R1 was born in Fukien of PRC in 1965 and finished primary school there. He emigrated to Hong Kong in 1981. He had worked as a factory worker, causal worker at construction sites, and a dump truck driver. At the material time, he worked as a driver cum delivery worker. R1 also occasionally took up odd jobs to supplement his income. According to R3, not disputed by R1, that they got acquainted in 2012 and since has become friends and R1 had performed odd jobs for R3 and his family from time to time. It was R1’s evidence, not disputed by other parties, that hitherto he had never been engaged or acted as a contractor of construction, renovation or related work.
9. Shortly after having the 1st R3R1 Conversation, R1 telephoned R2 (“the R1R2 Conversation”), with whom he had a close relationship.
10. R2 was born in 1951 and was 14 years older than R1. R2 was well acquainted with the parents of R1. R2 and R1’s parents were Indonesian overseas Chinese having returned to the PRC and lived in the same farm in Fukien, where R1 was born. It is R2’s evidence, not disputed by R1, that R2 treated, and looked out for, R1 as if R1 were his own relative. R2 had worked in construction sites, and I find that, among the applicant, R1 and R2 (“the Trio”), R2 was the one more experienced and knowledgeable in demolishing walls.
11. In the R1R2 Conversation, R2 suggested to R1 that the Demolition Work was a 3-person job. R1 then asked R2 to find a third worker.
12. It is common ground that there were no lifts in the building where the Premises was and therefore the debris would need to be carried manually down the stairs from the 3rd floor to the street level. It was R2’s evidence, not disputed, that such was the reason why he thought the Demolition Work was a 3-person job.
13. R2 then telephoned the applicant (“the R2App Conversation”), who was the younger brother of R2’s brother-in-law.
14. The applicant was also an Indonesian overseas Chinese born in Indonesia in 1955. He and his family returned to Yunnan in the PRC when he was 5 years old. He studied several years in primary school there. He emigrated to Hong Kong in 1981. He spoke Indonesian and Putonghua, but was not conversant in the Cantonese dialect. He has been working as a causal worker in the transportation, construction and renovation industry.
15. The applicant complained that he was tricked by R2. According to the applicant, in the R2App Conversation, R2 asked him if he was interested in being hired to do some transportation work, which he was. However, upon arriving at the Premises at about 11 am on 4 December 2014, the applicant found out that in fact the work involved the demolition of walls. R2 disputed this and said that he had told the applicant that the work was the Demolition Work. This dispute regardless, it is the applicant’s own evidence that having found out that the work involved was the Demolition Work, he agreed to take it up, albeit grudgingly.
16. In the morning of 4 December 2014, R2 and the applicant met up at the Mongkok MTR station and went together to the Premises, where they met R1. There is a dispute as to how R2 introduced R1 to the applicant. The applicant said that R2 introduced R1 as the “boss”. R1 and R2 denied that. After the introduction and certain event and conversation I will refer to later, R1 telephoned R3 (“the 2nd R3R1 Conversation”) and they agreed to a sum of HK$2,100 for the Demolition Work.
17. While the applicant was demolishing the Partition Walls with a hammer, a large piece of debris dislodged and fell onto his left foot and injured him (“the Accident”). As the Premises was very close to Kwong Wah Hospital (“KWH”), the applicant limped downstairs with the help of R2. They then took a taxi to the Accident and Emergency Department of KWH (“A&E of KWH”). It is the applicant’s evidence, disputed by R2, that while they were riding in the taxi, R2 said to him that he had to report the Accident to the Labour Department as the injury was serious and R2 then gave him HK$1,000. R2 denied that such was said by him and also said that the HK$1,000 was given to the applicant on another occasion. After waiting with the applicant in A&E of KWH for a while, R2 left the applicant and returned to the Premises.
18. R1 and R2 then finished the Demolition Work. However and very surprisingly, they gave a very different account as to how and where the debris (“the Debris”) was disposed of that day.
19. In KWH, the applicant was found to suffer from bruising at left 3rd toe with laceration wound over the plantar side of that toe, from comminuted fracture of left 3rd toe middle phalanx, and from distal interphalangeal joint dislocation. An emergency operation was performed that day. He was hospitalized and was discharged 4 days later on 8 December 2014.
20. It is the applicant’s evidence, which is disputed by R1 and R2, that both R1 and R2 had telephoned him on divers occasions and that they also visited him once at his home about 2 weeks after he was discharged from hospital; and that in those calls as well as during the visit, R1 and R2 asked him not to report the Accident to the Labour Department and to accept HK$20,000 in final settlement. The applicant said he refused the HK$20,000. On 16 January 2015, the applicant attended the Labour Department to report the Accident.
21. In the Notice of Accident dated 16 January 2015[2], the applicant reported that R1 was his employer and reported R1’s telephone numbers. The applicant’s case, not really disputed by R1 or R2, is that it was R2 who gave him R1’s name and the said telephone numbers, and that R2 later also provided to the applicant R1’s residential address for the applicant to supplement that piece of information onto the Notice. In the applicant’s declaration dated 2 March 2015 given to the Labour Department[3], he also declared that R1 was his employer.
22. It is common ground between R1, R2 and R3 that they together with R1’s wife had met up one evening in mid-December 2014 with a view to visit the applicant together (“the Intended Visit”). They arrived at the applicant’s home but no one answered the door. The applicant denied the incident and said that R1 and R2 had never mentioned about R3, nor had they ever mentioned that R3 would visit him.
The Application, an overview of parties’ respective pleaded case on liability, the possible scenarios and the issues
23. On 17 June 2016, the applicant commenced this application as against R1 and R2 only. The applicant’s then pleaded case was that either R1 and/or R2 was his employer at the time of the Accident; or alternatively, he was employed by R2, a sub-contractor of R1, the principal contractor.
24. Both R1 and R2 denied they were the employer of the applicant, or that R1 was the principal contractor and R2 the sub-contractor. At that stage, the only pleaded ground of opposition was that the Trio were all self-employed, and they together as partners contracted the Demolition Work from R3 at the agreed price of HK$2,100 to be shared equally between the 3 of them. R1 and R2 did not plead that R3 and/or R4 were their employer.
25. More than 2 years later and on 1 August 2018, the applicant amended the Application and joined R3 and R4 as respondents (“the 2018 Amendment”). Prior to that, R3 was R1’s witness and has filed a short witness statement dated 28 February 2018.
26. By the 2018 Amendment, the applicant’s pleaded case was amended to claim that
(1) either R1 and/or R2 and/or R3 and/or R4 was his employer; and
(2) alternatively, the applicant was employed by R1 and/or R2 who were the subcontractor(s) of the principal contractor(s), namely R1 and/or R3 and/or R4[4].
27. Thus, instead of specifying in his pleading as to who he alleged was the employer/principal contractor, the claimant just pleaded his claim in the widest possible manner essentially canvassing all the possible scenarios to ensure that one, or some of the respondents are liable to him.
28. In response to the 2018 Amendment, R1 and R2 added a new ground of opposition, alternatively to the ground they have already raised, that the Trio were in fact employees of R3 and/or R4.
29. R3 and R4 in their Answer merely denied barely that they were the principal contractor, the sub-contractor, or the employer of the applicant; and put the applicant to strict proof of the other matters. I particularly note that though in oral evidence R3 repeatedly maintained that R4 had contracted the Demolition Work to R1, who was therefore its contractor, such positive case or averment was never expressly pleaded in the Answer of R3 and R4.
30. By an amendment to their Answer made in September 2019, R3 and R4 pleaded section 2(1)(b) of the Employees’ Compensation Ordinance Cap 282 (“the Ordinance”) and averred that even if the applicant was employed by R3 and/or R4, the applicant was excepted from the definition of “employee” under the said sub-section.
31. In view of the said manner the applicant and the respondents have pleaded his claim, and to understand the issues involved, I think it better to set out the possible scenarios according to the applicant’s pleaded case. There are 6 of them, namely:-
(1) R3 and/or R4 contracted the Demolition Work to R1, who sub-contracted the work to R2, and R2 employed the applicant (“Scenario 1”);
(2) R3 and/or R4 contracted the Demolition Work to R1, who employed R2 and the applicant (“Scenario 2”);
(3) R3 and/or R4 contracted the Demolition Work to R1 and R2, and R1 and R2 employed the applicant (“Scenario 3”);
(4) R3 and/or R4 contracted the Demolition Work to the Trio together as a partnership, which is the scenario contended for by R1 and R2 (“Scenario 4”);
(5) R3 and/or R4 as employer employed the Trio as employees to perform the Demolition Work, which is the alternative scenario contended for by R1 and R2 (“Scenario 5”); or
(6) In the case of either Scenario 1, 2 or 3, R3 and/or R4 was a principal contractor within the meaning of section 24 of the Ordinance, and thereby became also liable as such (“Scenario 6”).
32. This court is to decide which of the scenarios was the true factual situation.
33. Depending on which scenario I find for, the following issues may require determination:-
(1) If I find for Scenario 5 or 6, which of R3 and R4, or both, are so liable as employer or principal contractor?
(2) If I find that R3 and/or R4 were the employer, would section 2(1)(b) of the Ordinance be engaged in the circumstances such as to except the applicant as an “employee”?
The legal principles for determining whether one was a contractor or whether one was an employee
34. Regarding (a) the question whether the applicant was an employee or a contractor (contracting for the Demolition Work in partnership with R1 and R2) (b) the question whether R1 contracted the Demolition Work from R3 and/or R4, or was employed by R3 and/or R4, and (c) to some extent, the question of whether R2 was the employer of the applicant, Mr Chung, Mr Cheng and Mr Wong submitted respectively that the approach and guidance set out in the well-known Court of Final Appeal case of Poon Chau Nam v Yim Siu Cheung[5] are applicable. I agree. This is not disputed by Mr Liu.
35. I think it suffices at this stage to quote the following headnotes from the report of Poon Chau Nam:-
“The modern approach to the question whether a person was an employee was to examine all the features of their relationship against the background of the indicia of employment with a view to deciding whether, as a matter of overall impression, the relationship was one of employment. This involved a nuanced and not a mechanical approach: painting a picture from the accumulation of detail. The indicia included the degree of control exercised by the “employer”; whether the person performing the services provided his own equipment; whether he hired his own helpers; what degree of financial risk he took; what degree of responsibility for investment and management he had; and whether and how far he had an opportunity of profiting from sound management in the performance of his task.”
36. Also apposite is the CFA’s holding in that case that there could be a contract of employment based on a specific engagement and even though the employment is of a casual nature.
The witnesses, general comments on their credibility and my findings of fact
37. At trial, the applicant, R1, R2 and R3 gave evidence.
38. For reasons I do not need to go into here, unusually in this action the applicant and R2 have each filed a witness statement and then 3 supplemental ones – a total of 4 rounds; while R1 and R3 have each filed 3 rounds of witness statements. The first round of their witness statements was filed in late 2017 to early 2018, except that of R3’s which was filed in July 2018[6], and their last round was filed in November and December 2020. In their respective supplemental statements, the witnesses have responded to what the others said in their previous witness statements which they disputed. I therefore bear very much in mind that each of the witnesses had had many opportunities and ample time to recollect and to reflect on the events, to consider the evidence filed by the others and to decide which aspect of the others’ evidence he disputed and to set out in his witness statements his own version over the disputed matters.
39. The applicant, R1 and R2 did not have the benefit of substantial education and were unsophisticated witnesses. My impression was that the applicant evidently had a very mistrustful outlook and was defensive and tend to exaggerate when giving evidence. He seemed to me quick to assert as truth his own personal impressions. I did not form a favourable impression over the reliability of his evidence. R1 often times did not answer questions directly and clearly. As will explain, I find him telling a pack of lies regarding how the Debris was disposed of, and he also changed his evidence regarding whether he had an agreement with R3 regarding who was responsible for the disposal of the Debris. I do not find R1 an honest or reliable witness and would not consider accepting his evidence unless it is not disputed or is corroborated by the evidence of others. R2 was relatively direct and forthright when giving evidence. I am favourably impressed by him. Save over a number of specific matters which I will allude to, I generally find him an honest and reliable witness. R3 was clearly a much more sophisticated person. As a witness, he was articulated and thoughtful. However, and as will allude to, I think he did not give honest or reliable evidence over certain relevant matters.
40. I find that all four witnesses to a different degree embellish their evidence to further their own stance or interest, with R2 doing that the least. I will be circumspect with their evidence and will examine the evidence concerning each disputed fact individually.
41. Below are my findings and reasons for so finding.
42. Concerning the 1st R3R1 Conversation:-
(1) In oral evidence, R3 recounted the contents of that conversation and said that he told R1 the name of R4 and that he stated clearly that it was R4 who enlisted R1’s help to demolish the Partition Walls. He gave the impression that he vividly remembered that such was said. I disbelieve him and do not accept this piece of evidence because
(i) R3 and R4 who has been legally represented all along must have known from the start that this piece of evidence is crucial to the contention now run by R3 and R4 that if liability were established, it was R4 and not R3 that was liable.
(ii) Yet, while in the witness box R3 purported to remember so vividly the above-mentioned contents of this conversation, such was never mentioned in any of his 3 witness statements. I have no difficulty to conclude that this piece of evidence was an afterthought made up by R3 when he was giving evidence.
(iii) Moreover, according to R3’s own evidence, R4 was then dormant and did not have financial resources of its own, so that at the time he would be paying for the Demolition Work on behalf of R4. Moreover, R3 clearly knew that R1 was an unsophisticated man and there was no reason at the time to draw to R1’s specific attention such distinction in the identity, which R1 might have difficulty in understanding anyway, and which in all likelihood would prompt R1 to inquire and R3 would need to explain and so on, which therefore would have unnecessarily complicated matters. Thus, I find it highly inherently improbable that R3 would in this conversation so introduce R4’s name and specifically mentioned that it was R4 who engaged R1.
(2) It is the evidence of both R1 and R3, and indeed R3 specifically accepted in cross-examination, that in this conversation, words like “engage as a contractor” “contract the work” or “engage as employee”[7] or words to that effect were not used. I so find. Indeed, it was R3’s own evidence that he called R1 for “help” and “assistance”:
“… 由始至終，本人只是替第四答辯人找人協助清拆上述單位一幅牆。本人認識第一答辯人，以往也曾與第一答辯人合作，所以便找第一答辯人幫忙。”[8] (my emphasis)
(3) In §4 of R1’s 2nd supplemental witness statement dated 4 December 2020, R1 expressly admitted that he made a mistake earlier when he said in §6 of his witness statement dated 11 January 2018 that in this conversation “謝重輝說大鎚、籮、鏟和掃把等工具全部放在該單位內，本人不需帶備工具” and that in fact such was never said by R3. I accept R1’s such evidence and find that R3 never said those words in this conversation.
(4) I find there is little divergence in R1 and R3’s versions of the remainder of this conversation[9] . Essentially both said that R3 told R1 that a wall of the size 10 feet x 8 feet need to be demolished in the Premises, and he asked R1 how much. R1 said that the work could not be done by himself alone and he and his “companions” (according to R1’s version, the actual words used by him was “夥伴”) or “his 2 friends” (according to R3’s version) need to take a look first. R3 then told R1 the address and that the key was placed at a spot at the gate. I find such were the contents of this conversatio.
43. On the R1R2 Conversation, in §2 of R2’s witness statement dated 16 December 2017, R2 said:-
“我在2014年4月3日，接到伍炳榮打來電話。他朋友在旺角某大廈3樓有一個單位需要拆一個沙磚牆，面積大約升降機門大小需要三個人拆找工人每個人$700，要我找一個幫手，做完工由他的朋友負責出糧。他朋友是誰我不認識，屋主是誰我也不知道。一切接頭有伍炳榮向他朋友聯繫，我負責幫他找人做工。”
That witness statement was written by R2 in his own handwriting and was his first witness statement, filed when he was not legally represented. His such evidence on the recollection of the contents of the conversation was not seriously disputed by the other parties. I accept R2’s such evidence as to the contents of that conversation.
44. Moreover, there being no evidence showing otherwise, I accept and find, as R2 said in the above quote, that he did not know who R1’s friend was who sought help to demolish the Partition Walls and that he has never made any contact with that friend. He was only asked by R1 to help with the Demolition Work and to find a third worker to undertake that work.
45. I accept the evidence of the applicant, which was not really seriously disputed by R2, that on previous occasions R2 had introduced various casual work to the applicant. It was the applicant’s evidence, which I accept, that on some of the occasions R2 was the person who had handed the wages to the applicant. However, there was no evidence from the applicant that R2 so handed the wages to him other than in the capacity of a middleman, and not in the capacity of employer. I so find.
46. On the R2App Conversation:-
(1) I do not propose to resolve whether the conversation took place on 3 December 2014, as R2 remembered, or in the morning of 4 December 2014, as the applicant remembered, as I do not think it matters.
(2) I do not accept the applicant’s evidence that R2 purposefully tricked the applicant by telling him that the work only involved moving machinery, though I suspect R2 might not have told the applicant so frankly as he said - that the work involved demolition of the Partition Walls - as the applicant was somewhat reluctant to take up such a strenuous job, which from the applicant’s evidence I accept was his tendency. Relevantly, I find, as is common ground between the applicant and R2, that in this conversation:-
(i) nothing was said expressly in this conversation to the effect that the applicant would be doing the work as a “self-employed” person, or would be in a partnership with, or undertake the work as a partner (in the legal sense of that word) with, R2 and R1; and
(ii) R1’s name was not even mentioned to the applicant.
47. The applicant and R1 and R2 hotly disputed as to whether R2 had introduced R1 as the “boss” in Indonesian when the applicant first met R1 in the Premises. The applicant so insisted while R1 and R2 denied. The gravamen of the matter is that the applicant is placing some reliance on this alleged introduction to say that R1 was the applicant’s employer. On balance of probabilities, I find that R2 had introduced R1 as “boss” or someone “in charge” on the basis that:-
(1) Having heard and seen the witnesses, I was impressed that R2 was not only the elderly and the more experienced among the Trio, but he was a person of initiative and leadership. The applicant however appeared grumpy and not focused. In the circumstances, I find it more likely than not and also inherently probable that (a) R2 would introduce R1 to the applicant when they first met in the Premises, and (b) R2 would call things to order by introducing R1 to the applicant as someone the applicant should respect and listen to.
(2) Conversely, I find it improbable that R2 would introduce R1 to the applicant as someone being the applicant’s equal with the potential consequence that the applicant was expected to have a say, or his full agreement would be required, relating to the performance of the Demolition Work.
As I find the introduction was made in such circumstances and on that basis, and I also accept R2’s evidence that at the time he understood that the wages would be paid by R1’s friend (see the quote in paragraph 43 above: “由他的朋友負責出糧”), I do not find that R2 meant to introduce R1 as the applicant’s employer.
48. On who provided the tools and equipment:-
(1) It was the evidence of R1 and R2 that they found a hammer, a shovel and a broom inside the Premises and they did not know if R3 or anyone else placed them there. There was no evidence, direct or indirect, proffered by the applicant, R3 or R4 on the subject to contradict R1 and R2’s version, which I therefore find for on the available evidence.
(2) It was R1’s evidence, given in §5 of his 2nd supplemental witness statement dated 4 December 2020, that if they need to buy tools to demolish the Partition Walls, he would inform R3 and the costs of such tools would be reimbursed by R3. R2 also said in oral evidence that such was his understanding. I note that such evidence by R1 and R2 was not really disputed in their cross-examinations by R3. In the premises, I find that such was the understanding between R1 and R3.
49. It was not disputed that in the Premises, R2 checked the Partition Walls and opined to R1 and the applicant that the walls to be demolished were made of sand bricks and not concrete and therefore were not at all hard to demolish. Though the exact detail of the ensuing conversation between Trio were not entirely clear, it was reasonably clear from the evidence, and I find, that the Trio engaged in a short conversation after R2 had checked the Partition Walls, and they agreed to propose the sum of HK$2,100 with each of them getting HK$700. At some point R2 asked the applicant if he would agree to do the work for HK$700, which the applicant indicated he would. After that, R1 called R3 and had the 2nd R3R1 Conversation.
50. In connection with that, I accept the evidence from the applicant that the going rate of daily wages for a casual worker in the construction field at the time was HK$650 to HK$750 per day, and also accept the evidence of R1 and R2 that such going rate of daily wage was HK$700. When cross-examined, R3 completely denied that he knew that such was the going rate of daily wage for such casual worker. I find it defying belief that R3, having worked in the construction industry for over 2 decades in various capacities and now owning and operating a sizable renovation company, had no knowledge that such was the going rate. I have no difficulty in rejecting his such evidence.
51. Regarding the 2nd R3R1 Conversation,
(1) It is common ground that only R1 talked to R3 over the phone, and doing so within the hearing of R2 and the applicant, but R2 and the applicant never talked to R3, or R3 to them, nor did R1 introduce R2 and the applicant to R3.
(2) There was no serious dispute over the general contents of that conversation.
(3) R3’s own evidence, given in §9 of his supplemental witness statement dated 24 June 2019 was thus:-
“… 第一答辯人伍炳榮致電本人表示他們3人，即申請人、第一和第二答辯人在視察該單位的廁所牆身後商討，一致決定同意以港幣＄2,100元替該單位拆牆。其間，本人與第一答辯人曾討價還價，本人還價港幣$2,000元，遭第一答辯人即時拒絕。本人記得第一答辯人當時解釋他們三人同意平均分配利潤，即將港幣$2,100元平均分為三份，申請人、第一和第二答辯人各得港幣$700元。由於只是區區港幣$100元而已，本人認為價錢也算合理，所以便答允第一答辯人的要求。”
(4) In R3’s 2nd supplemental witness statement dated 17 November 2020, he further said at §5:-
“… 在2014年12月4日，第一答辯人致電給我第一次給我報價，說其他兩名工友需要$700元來清拆牆壁，所以他告訴本人他的報價是2100元，將會平均分為三份…” (my emphasis)
(5) Save that I do not accept that “平均分配利潤” were the actual words spoken by R1, I accept R3’s such evidence, not seriously disputed, regarding the contents of that conversation. I do not accept that “平均分配利潤” were actually spoken by R1 because I find it inherently improbable that the Trio, being unsophisticated and relatively uneducated, would articulate and discuss among them using the term “利潤” or that R1 would so articulate to R3. I also prefer R1’s version to the effect that he told R3 that the total sum would be divided among the Trio and it would be very cumbersome to divide HK$2,000 by 3.
(6) I therefore find that it was communicated to R3 and R3 knew (a) that the amount HK$2,100 was arrived at as the other 2 workers asked for HK$700 each, (b) the sum would be equally divided between R1 and the 2 other workers and (c) R1 would be receiving and remunerated no more, and no less, than the other two workers.
52. R1 said in §12 of his witness statement dated 11 January 2018 that the applicant said “大家都是自僱不用你擔心，有事我自己負責，…，沒有關係，不要穿安全鞋了”, to the effect that the applicant stated that he was “self-employed”. The applicant strenuously denied having said so and maintained that he all along understood that he was engaged to do some work for a wage. I could believe the applicant might have said words to the effect that R1 should mind his own business if R1 queried him why he did not wear safety boots. However, my clear impression was that even when giving evidence at trial the applicant had some difficulty in grasping the concept of “self-employed”. I therefore think it very inherently improbable that the applicant would spontaneously verbose the nature of their relationship - being each a “self-employed” person - as a response to whatever R1 was querying him. I thus reject R1’s such evidence.
53. It was not seriously disputed, and I find, the following. After the 2nd R3R1 Conversation was over, it was R2 who told the applicant to demolish the Partition Walls with him, and since there was only one hammer, they would do so in turn. R2 took the first turn and demonstrated to the applicant how that was done. After a certain number of strikes, R2 rested and handed the hammer to the applicant to continue. They then took turn. In the meantime, R1 took down the door and also shoveled the Debris. At some point, R2 told R1 to go shops nearby to buy some bamboo baskets to hold the Debris. I also accept R2’s explanation that he asked R1 instead of the applicant to go because the applicant was not conversant in Cantonese and he might not know where those shops were. After R1 and the applicant had worked for a while, the Accident happened as aforesaid.
54. Though I do not think the resolution of the dispute whether in the taxi ride R2 handed the applicant HK$1,000 and told the applicant to report to the Labour Department matters much to the determination of the issues, I will state my finding that on balance of probabilities I prefer and find for R2’s version and do not accept such evidence from the applicant. I find R2’s version more inherently probable in that there was no reason for him to be so generous as to immediately gave the applicant HK1,000 from his own pocket in the short taxi ride, and rather more probable, as R2 said, that later on he received HK$700 from R1 as the applicant’s share, he then paid that to the applicant sometime later by giving to the applicant a HK$1,000 note expecting change of HK$300, but the applicant did not give him the change; and seeing that the applicant was injured, R2 did not insist for it.
55. When cross-examined, R1 said that he found some baskets in the Dundas Street Public Refuse Collection Point situated close by on Dundas Street at the junction of Tung Choi Street. He asked for permission from a man there to dump the Debris there and the man said yes. He then transported the Debris from the Premises, basketful by basketful, and dumped it at that Refuse Collection Point. As to the volume of the Debris, it was R2’s evidence, not disputed by R1, that the Debris amounted to about 20 basketfuls. I so find. I completely reject R1’s such evidence concerning how he disposed of the Debris. The Waste Disposal (Charges for Disposal of Construction Waste) Regulation Cap 354N was enacted in 2005 implementing since December 2005 the Construction Waste Disposal Charging Scheme whereby construction waste could only be lawfully disposed of according to the Scheme and essentially at certain landfill locations, and at a charge payable through an account opened with the Environmental Protection Department. That being the case, I find it completely defies belief and most inherently improbable that any one in charge of, or working in, the Dundas Street Public Refuse Collection Point would give permission for R1 to dump the Debris at that Collection Point, and actually let R1 did so subsequently basketful by basketful. In my view, R1 clearly lied about the matter.
56. In the circumstances, I find for R2’s version that he and R1 finished the Demolition Work that afternoon and transported the Debris, which was contained in baskets, downstairs and left them on the side of the pavement, and they then left the Premises.
57. R3 denied in oral evidence that he had caused the Debris to be disposed of.
58. Both R1 and R3 have been cross-examined on the subject of the arrangement between them, if any, as to the disposal of the Debris. R1 clearly has changed his evidence in that regard along the way. Initially, he said there was a tacit understanding between him and R3 (and not an express agreement) that he would be responsible for the disposal. Later, he changed his evidence and said that there was an expressed agreement with R3 that the Debris was to be carried downstairs and be left there. R3’s evidence was that there was no expressed discussion or agreement with R1 on the disposal of the Debris, but that, as part and parcel of “contracting the Demolition Work to R1” it was clearly understood between them that R1 was responsible for it. In evidence, R3 accepted that he was conversant with the Construction Waste Disposal Charging Scheme, and indeed mentioned in some detail the arrangement and price 濯新記工程公司 paid to its contractors concerning demolitions and construction waste disposal, and also that smaller amount of construction waste could be disposed of through contractors specialized in construction waste disposal. Despite acknowledging that the disposal of the Debris would entail hiring a dump truck to transport the Debris to either one of the landfill sites and paying the government charge, or transporting them to a waste disposal contractor and paying the fee asked for by the contractor, which I find would be a substantial amount of money either way (way over HK$1,000), R3 vehemently maintained that it was his understanding, and he thought not unreasonable, that the agreed HK$2,100 (as he knew from the 2nd R3R1 Conversation, was to be shared among R1 and the 2 workers present) included the labour for the Demolition Work and the costs of disposal of the Debris. I find it highly improbable and incredible that such was his honest and genuine understanding at the time. I thus reject his such evidence. Moreover, bearing in mind that R3 said he and R1 were good friends, I very much doubt R3 would seek to impose on R1 such a harsh deal of paying R1 only HK$2,100 for the labour of the 3 workers and for all the costs for the disposal of the Debris. However, from R3’s said evidence, I find that he had the connections to contractors providing services of construction waste disposal.
59. In the result I find that both R1 and R3 were not honest or forthright in their evidence concerning the arrangement as to the disposal of the Debris. Considering all the related evidence, my other findings above, and the circumstances, including also:-
(1) the section of Sai Yeung Choi Street where the Premises was situated was a busy street, being part of the popular shopping area in the Mongkok Yaumatei district. It therefore seems to me that if the Debris was left on the pavement for a while and not removed, people would complain, and the matter could without much difficulty be traced back to the construction work of the Premises and R3/R4 being the person responsible;
(2) there was no evidence, indeed not even any suggestion, that R1 or R2 was supposed to, or did, hire a dump truck to transport the Debris away;
(3) the fact, as I found, was that soon after they started working R2 told R1 to go and buy the baskets, from which I infer that R2 knew at the time that they were supposed to put the Debris in baskets;
(4) R2’s evidence, which I accept, was that he and R1 actually left the Debris on the side of the pavement downstairs in basketfuls;
(5) the disposal of the Debris would cost a substantial amount of money; and
(6) R3 had the connection to construction waste disposal contractors;
I find that:-
(7) the only reasonable inference is that the Debris had actually been cleared away from the side of the pavement;
(8) the only reasonable inference is that R1 and R3 had at some point discussed and agreed on the arrangement regarding disposal of the Debris, which was that the Debris was to be left on the side of the pavement in basketfuls;
(9) the reasonable inference is that R1 did purchase the baskets (as asked by R2) with the understanding that R1 would be reimbursed by R3 the costs of those baskets;
(10) the HK$2,100 remuneration did not include the further disposal of the Debris; and
(11) the only reasonable inference is that R3 would make his own arrangement to dispose of the Debris, and he did cause the same to be disposed of.
60. Bearing in mind my finding on the Intended Visit below, I accept the applicant’s evidence, as inherently probable, and I find, that after the Accident, there were some discussions between him and R1 and R2 concerning a payment to the applicant to compensate for his injury. Conversely, I find R1 and R2’s evidence that there were no such discussions inherently improbable. However, I do not accept the applicant’s evidence on the details as I find the applicant tend to exaggerate and I am not favourably impressed with the reliability of his evidence generally.
61. In cross-examination, it was not seriously disputed by R1 and R2 that the purpose of the Intended Visit was to discuss settlement with the applicant. In any case, I find it most inherently improbable that it was only for a social visit that R1 and notably also his wife, R2 and R3 would meet up first and then to visit the applicant’s home together. I find it highly probable that there was a purpose intended for that visit, and the purpose was to discuss settling the matter relating to the applicant’s injury amicably.
62. R3 explained in oral evidence that the purpose of his attending the Intended Visit, and why he agreed to go, was that he knew a thing or two about Chinese bone setting, and R1 asked him to come so as to take advantage of his “skill” to examine/understand the applicant’s injury. He accepted that he was not formally trained or qualified medically. It seems to me that such explanation does not make any sense at all. By that time, all concerned must have some idea that the applicant suffered from comminuted fracture and joint dislocation of his toe, which were serious and complicated injuries, and it has been operated on. It is highly improbable that the applicant would let R3, whom he had never met before and who was not medically qualified, to “examine” his wound. Moreover, even if R1 was desirous of “understanding” the extent or seriousness of the applicant’s injury, he would not have taken the trouble to ask a totally unqualified person to “examine” the applicant. I completely reject R3’s said explanation as a totally incredible and disingenuous excuse. I would infer that R1, R2 and R3 himself at the time considered that the matter of the Accident and the applicant’s injury might concern R3 and hence his participation in the Intended Visit.
Dismissing the claim that R2 was the sub-contractor of R1 or that R2 was the applicant’s employer
63. Apart from the fact that (a) R2 was the person telephoning the applicant to ask if he would like to take up the work, (b) R2 met up with the applicant and went to the Premises together, (3) R2 arranged himself and the applicant to hammer the walls in turn and demonstrated to the applicant how it was done, and (d) R2 was the person handed the HK$1,000 note to the applicant (and all these are undisputed by R2), the applicant proffered no other matters to support his claim that R2 was R1’s contractor or that R2 was his employer. Evidently, what R2 did were no more than what he did on earlier occasions when he introduced casual work to the applicant offered by other contractors, and were consistent with the common practice in the construction trade when one casual worker introduces work to another.
64. From the evidence of R2, which I find for as mentioned in paragraphs 43 and 44 above, it is clear that R2 was merely helping R1 to contact the applicant to recruit him as the 3rd worker and R2 had had no dealing whatsoever with R3 and/or R4. I therefore find that R2 was not the contractor of R3 and/or R4.
65. The applicant clearly knew, having discussed the matter of remuneration among himself, R1 and R2 in the Premises prior to the 2nd R3R1 Conversation, and having overheard the 2nd R3R1 Conversation, that R2 earned in the undertaking the same amount that the applicant himself would earn and R1 would earn, no more no less, and indeed the Trio were sharing equally the sum of HK$2,100 promised to be paid by R3. Such arrangement of sharing equally the remuneration to be paid by R3 clearly showed that R2 was not the contractor of R1, and indicated that when R2 paid the HK$1,000 note to the applicant, he was doing so in the capacity of a middleman. Moreover, the fact that R1 himself also took part in the Demolition Work earning equally HK$700 showed that R1 had not contracted the work to R2.
66. I thus find no merits whatsoever in the applicant’s case against R2 claiming R2 was his employer or that R2 contracted the work from R1. I have no hesitation in dismissing the applicant’s claims against R2. The applicant ought to have known he had no such case and ought not have made such claims against R2 at all.
Dismissing the claim that R3 and/or R4 was a principal contractor
67. Sections 3 and 24(1) of the Ordinance provide:-
“Section 3:
‘Principal contractor’ means a person referred to as a principal contractor in section 24;
‘Sub-contractor’ means
(a) any person who enters into a contract, express or implied, with a principal contractor to perform all or any part of the work which the principal contractor has undertaken to perform; and
(b) any other person who enters into a contract, express or implied, to perform all or any part of the work which a sub-contractor within the meaning of paragraph (a) has undertaken to perform.
Section 24(1):
‘Where any person (in this section referred to as the principal contractor), in the course of or for the purpose of his trade or business, contracts with a sub-contractor for the execution by or under the sub-contractor of the whole or any part of any work undertaken by the principal contractor, the principal contractor shall be liable to pay to any employee employed by that sub-contractor or by any other sub-contractor in the execution of the work any compensation under this Ordinance which the principal contractor would have been liable to pay if that employee had been immediately employed by him ...’”
68. It was held in Poon Hau Kei v Ho Shui Keung and Others[10] that to bring a claim under section 24(1) against someone alleged to be a principal contractor, it must be shown that:-
(a) There must be work undertaken by the alleged principal contractor;
(b) The work must be in the course of, or for the purpose of, the alleged principal contractor’s trade or business; and
(c) The alleged principal contractor must contract with another person for the execution of the whole, or some part, of the work.
69. It is not disputed by the applicant that the business of R4 was intended to be dealing in water proofing products, and not construction, renovation or demolition. The evidence clearly showed that R3 and/or R4 was, as Mr Liu put it – “the end user”, that engaged others to do the Demolition Work to ready the Premises to be used by R4 as its office, showroom and storage facility. In other words, R3 and/or R4 were the client and they had not undertaken that work. I so find and conclude that R3 and/or R4 was not a principal contractor within the meaning of section 24 of the Ordinance. I thus dismiss the applicant’s such claim as completely without basis. Again, in my view the applicant ought not have brought the claim that R3 and/or R4 was the principal contractor.
Was R1 the contractor of R3 and/or R4 and the applicant R1’s employee? Were the Trio self-employed, and together as a partnership acted as the contractor of R3 and/or R4? Were the Trio employees of R3 and/or R4?
70. I think it convenient to consider and discuss these 3 mutually exclusive scenarios together.
71. As I found above, in the 1st R3R1 Conversation, R3 called R1 to seek his “help” and “assistance”. I would view that against the background that R1 had hitherto never acted as a contractor of construction or renovation work, but had only undertaken some small odd jobs for R3 and his family, and that while R3 was very experienced in the construction industry operating a sizable renovation company and was an articulated person, he has not said to R1 expressly that he intended to engage R1 as a contractor.
72. From R2’s evidence, which I accept, he was told by R1 in the R1R2 Conversation to help recruit a 3rd worker to help and R1’s friend would be paying the wages. I note there was no mention whatsoever there that R1 was looking for a partner, or that R1 was looking for a 3rd worker to form a partnership between R1, R2 and that 3rd worker.
73. Counsel appearing for the parties have addressed me extensively on the usual indicia which the court is to consider to form the overall impression under a nuanced (and not a mechanical) approach of painting a picture from the accumulation of detail.
74. On the degree of control over the Demolition Work, evidently and without dispute, R3 and/or R4 had not tried to exert any, nor did they actually. Nor did R1. As said, I find that it was R2 who checked the Partition Walls, who opined that the walls were not hard to be knocked down, who arranged which of the Trio did what task and demonstrated to the applicant how to go about his task. In the circumstances and having heard the Trio giving evidence, I am of the clear view that the above state of affairs was much more consistent with the fact that R2 was the elderly among the Trio commanding some respect and the more experienced and knowledgeable person and his leadership personality rather than R2 exercising control in the capacity of an employer.
75. Moreover, and to me more importantly is that the Demolition Work was a simple and straight forward task, such that it seems to me that even if R3 and/or R4 were an employer, it would not be surprising that R3 would not personally attend the Premises to manage the performance of the task. I therefore do not find “the degree of control” indicative.
76. As to who provided the equipment for the task and therefore what that indicated, I found above that it was not known who provided the hammer, the shovel and the broom. I found there was an understanding that R3 would reimburse R1 the costs of further equipment. I found baskets were purchased by R1. There was no direct evidence that R1 was actual reimbursed by R3 the costs of those baskets, and I make no finding on that. Moreover, the equipment involved were minimal and relatively cheap. I thus do not find the provision of equipment a helpful indicium in this case. However, it seems to me that the understanding to reimburse the costs of further equipment clearly indicated that the Demolition Work was meant to be an engagement for mere labour only, namely for demolishing the Partition Walls and carrying and placing the Debris downstairs in basketfuls.
77. Next to consider are the “financial risk” and “opportunity of profiting” aspects. I find these aspects particularly indicative in the present case. In the 1st and 2nd R3R1 Conversation, R1 told R3 that he could not perform the Demolition Work alone, but together with 2 other friends[11]. Moreover, in the 2nd R3R1 Conversation, as I mentioned in paragraph 51(4) above, it was R3’s evidence, which I accept, that when negotiating the costs R1 said that the 2 other workers asked for HK$700 each.
78. While in negotiating a price in some situations a contractor might tell his client the make-up of his costs to justify his asking price, and one would expect a contractor would then include a profit element of say 20 to 30% over and above the costs he mentioned, as a contractor bears risks, contractual duties, responsibilities and other outlays. Yet here, R1 told R3 that there were two more workers to do the work, apart from himself, and then related to R3 what the other 2 workers asked for, and quoted a price that reflected that he himself would be remunerated in the exact amount as the other 2 workers. As I found, HK$700 was within the range of the going rate of daily wage of a causal worker, which the Trio were each asking. I also found above that R3 had to have some knowledge that that was the going rate. Thus, R1 was merely asking for, and was agreed by R3 to be paid, the same daily wage at the current going rate as the other 2 workers asked for. There was thus no profit element whatsoever to speak of in the sum R1 quoted, not to mention any opportunity for profit from sound management. There was also no financial risk involved. I have rejected above R3’s case and evidence that the HK$2,100 was the contract price which included the costs of disposing the Debris in accordance with the Construction Waste Disposal Charging Scheme and I will not repeat what I said above. All these indicated strongly, in my view, that R1 was not a contractor, not someone who was carrying a business on his own account, but was rather an employee of R3.
79. I do not find other potential indicia, such as whether the alleged employee bore any responsibility for investment and management, whether he would be properly regarded as part of the alleged employer’s organization, and whether the alleged employer bore any responsibility in relation to insurance and tax for the alleged employee of relevance in the factual situation of this case. These matters were not really explored by the parties in evidence.
80. One other possible indicium is the traditional structure and practices of the trade. Mr Cheng referred me to the common practice in the construction industry where casual workers refer work to one another, often in the form of a “gang”. He cited Hong Kong Personal Injuries Services at §452, which was cited with approval and applied in Chan Kwan v Wang Fat Scaffolding Ltd & Ors[12]:
“… It is important to note that while sometimes only one worker will be recruited out of the casual labour pool, more often, what happens is that an employer contacts a ganger known to him and asks him to get a gang of workers to do a specific task. Usually, the ganger will be told that a lump sum will be allocated for payment to the gang to complete that task, and it will be left to the gang as to how they split the money. The quantum of lump sum is normally calculated by the employer on a piece basis, for example, for concreters, how many square metres concreted and/or for transportation workers how many sacks of rice loaded. But within the gang, the same would be split equally as between its members. There is one exception to this equal-splitting rule. Sometimes, the ganger gets an extra share although this is not invariably the case. The actual payment of the lump sum is almost always made to the ganger, and he then goes off to pay individual gang members.
… Invariably, however, the major items of equipment or materials would be provided by the employer although sometimes he so provides by giving the ganger funds to purchase the same. Sometimes, the ganger, like many supervisors or foremen, can hire and fire individual members of the gang. However, even here certain particularities exist. Thus, insofar as hiring is concerned, a complication exists with the occasional practice whereby replacement workers are brought in not by the ganger but by the particular gang members who have to absent themselves from work for a time. These replacement workers may even be paid by that original gang member by means of his handing over the wages due for the period the replacement occurred. As for dismissal, in practice, the same rarely seems to occur as the gang members, if not clansmen or men from the same village in China, would at least have known each other and worked together for a long time, and as such, dismissal never seems to be contemplated. Instead, other more face-saving ways of easing out an unsatisfactory gang member seem to be used.
It will be apparent from a consideration of the cases which followed that some general principles can be extracted which can then be applied to cases involving Hong Kong casual workers, be they in gangs or not. Those principles are:
(i) The mere fact that a worker is working as part of a gang, recruited and paid through a ganger is insufficient to cause the worker to not be an employee.
(ii) The mere fact that a ganger can hire and fire gang members would not cause the ganger or the gang to become contractors.
(iii) The mere fact that gang members engage and pay for temporary replacement workers will not cause the gang to become contractors.
(iv) The mere fact that a worker is a master or 師傅 and thus works unsupervised is insufficient to cause that worker to not be an employee.
(v) The mere fact that a worker brings his own personal small tools, e.g. spade, trowel to the job is insufficient to cause that worker not to be an employee.
In fact, it is probably correct to say that even the presence together and at one time of all the aforesaid conditions would still not suffice to cause the casual workers of a gang to not become employees. It is only if evidence, which is usually of financial risk, of the carrying-on of business on the workers’ own account exists that one can safely conclude that the workers were not employees.” (Mr Cheng’s emphasis)
81. This common practice was not disputed by the other parties.
82. Considering (a) R3 sought R1’s help, (b) the Demolition Work was a specific engagement of labour work, (c) R1’s first response when asked by R3 for the price was that the Demolition Work could not be done by him alone and would need to be performed by others, (d) R1 told R2 to look for a 3rd worker, which R2 did, and R1 also told R2 that the wages would be paid by “his friend”, (e) in the Premises the Trio discussed and agreed among themselves that they would propose HK$2,100 to be shared equally, and their respective equal share was the going rate of daily wage, (f) R3 knew, as was the fact, that R1 was asking for himself the exact same amount as the other 2 workers, namely, the going rate of daily wage and (g) the Trio each took part in the Demolition Work, I take the view that the picture so presented was very much consistent with the said common practice.
83. The applicant addressed me on the views of the parties as to the nature of their relationship, including some answers given by R1 when cross-examined by Mr Chung to the effect that he understood he had “contracted” the work from R3 (the words he used were “承包”).
84. Mr Cheng submitted that a worker’s own subjective belief of his capacity is not conclusive.
85. In Poon Chau Nam, Ribeiro PJ, delivering the judgment the other four members of the Court of Final Appeal agreed, held that:-
“57. If, on the facts viewed objectively and applying the indicia of employment discussed above, the person injured is properly to be regarded as an employee, the ECO applies and any agreement seeking to remove that person from its scope is void … However, if there is objectively an employer-employee relationship, the compulsory statutory duty which the employer bears cannot be overridden by the express stipulation of the parties…
58. This was also the approach in Young & Woods Ltd v West … Stephenson LJ stressed that it was “the court’s duty to see whether the label correctly represents the true relationship between the parties” …
59. The Hong Kong Court of Appeal has expressed similar sentiments in Chan Kwok Kin v Mok Kwan Hing & Another, where Clough JA stated:
It was for the court and not the applicant to evaluate the facts and determine the legal relationship of the applicant to the first respondent. The applicant no doubt knew who he was working for, namely the first respondent, but in all the circumstances we think his classification of their legal relationship and of his legal relationship with Law can have no significant evidential value”
86. The above holding clearly laid down the approach that it is for the court to evaluate the facts objectively and to apply the indicia of employment and to give little weight to the parties’ own subjective classification, label or expression of the legal relationship. I thus accept Mr Cheng’s said submission.
87. Indeed, in the present case, I am all the more mindful of not giving weight to parties’ own subjective beliefs as I had serious doubts, when hearing the evidence, that the Trio really understood the subtle distinction between, and the different consequences following the distinction of, a contract of service and a contract for service.
88. I would therefore give little weight to the said answers given by R1. In the same vein, I would also give little weight to actions taken by parties based on, or which might be said to show, their subjective beliefs of the legal relationship, namely the fact that (a) the applicant asked for the telephone number and address of R1 for the purpose of reporting to the Labour Department that R1 was the employer and R2 gave the applicant those details, (b) settlement talks were initiated by R1 and R2, and (c) the Intended Visit was arranged and attended by R1 to R3 and R1’s wife.
89. While the above discussions center on R1, many of the analyses are also apposite, if not more, to the situation of the applicant. On the evidence I accept, there was not even a hint in the communications among the Trio that the applicant would, or did, take part in the Demolition Work as a self-employed person. I accept without hesitation the applicant’s own evidence that he was minded only to be engaged to work and be paid the wages, and that so long as he got paid, he cared little who his employer was. All the above indicia of employment, as applied to his situation, clearly indicated that the applicant was an employee. I so find. As the allegation that the applicant was self-employed was not seriously pursued at trial by R1 and R2, in my view rightly and sensibly, I will not run through each of the indicia as they pertain to the applicant.
90. Equally, there is little substance in R1 and R2’s pleaded case that the Trio were in a partnership in its legal sense, and they contracted the Demolition Work as a partnership from R3. The facts as I find are that there was no communication, not to say agreement, whatsoever between the Trio to the effect that they would be carrying on a business in common with a view of profit, they would share the risk or that they would each be responsible for each other’s action. All I find is that prior to the 2nd R3R1 Conversation, the Trio did discuss briefly about remuneration and came to a consensus that they each would ask for and be paid HK$700, and on that basis, they, particularly the applicant who previously was hesitant, agreed to perform the work with such pay. As said, such was very consistent with the common practice in the construction field of a gang of casual workers pooling together to do a specific task on a lump sum which they would split among themselves. Again, the allegation of partnership was not seriously pursued by R1 and R2 at trial, in my view also rightly and sensibly. In the premises, I find without hesitation that there was no partnership among the Trio.
91. Evaluating the facts and circumstances objectively and applying the indicia of employment, I find that the overall picture is clear. R3 sought R1’s help with the Demolition Work. R1, acting akin to a ganger, recruited R2 and the applicant to work together with him, as casual workers employed by R3, and each being paid a sum equal to the daily wage of a casual worker, to undertake the specific task of the Demolition Work. R3 later paid the sum of HK$2,100 to R1 as the ganger to be split among the Trio and R1 paid R2’s and the applicant’s share to R2, and R2 paid the applicant his share. I thus conclude and hold that R1 was not a contractor of R3, that he was merely the ganger, and that the Trio were not together (partnership or otherwise) the contractors of R3/R4, and that the Trio were in fact employees of R3.
Was the applicant excepted as an “employee” under section 2(1)(b) of the Ordinance?
92. R3 and R4 contend that the applicant is excepted as an “employee” for the purpose of the Ordinance by virtue of the proviso in section 2(1)(b) of the Ordinance (“the Proviso”), which reads:-
“2. Meaning of employee
(1) In this Ordinance, unless the context otherwise requires, the expression employee (僱員), subject to section 4 and the proviso to this subsection, means any person who has, either before or after the commencement of this Ordinance, entered into or works under a contract of service or apprenticeship with an employer in any employment, whether by way of manual labour, clerical work, or otherwise, and whether the contract is expressed or implied, is oral or in writing: (Amended 11 of 1958 s. 2)
Provided that the following persons are excepted from the definition of employee (僱員) —
(a) (Repealed 44 of 1980 s. 3)
(b) any person whose employment is of a casual nature, and who is employed otherwise than for the purposes of the employer’s trade or business, not being a person employed for the purposes of any game or recreation and engaged or paid through a club and not being a part-time domestic helper; or (Amended 63 of 1992 s. 2)”
93. Mr Liu first cited §28 of the judgment of Ribeiro PJ in Poon Chau Nam:-
“28. The effect of that proviso is to include within the definition of “employee” for ECO purposes, a person working under a contract of service even if his employment is of a casual nature, provided that such casual employment is for the purposes of the employer's trade or business. …” (Mr Liu’s emphasis)
94. With that, Mr Liu essentially contended that the Proviso should be narrowly and rigidly construed to the effect that the casual employment must be for the carrying on of the particular trade or business activity of the employer. His contention was that R4 was about to engage in the business of dealing in water proofing products, and demolition of walls or renovation was the work the applicant was employed to do, which was different from trading of water proofing product, therefore not for the carrying on of the business of R4, therefore the Proviso applies to exclude the applicant from the definition of “employee”.
95. Mr Liu cited 2 cases. The first was Chow Mui v Chow Cheuk Chung, which was a workmen’s compensation case decided in 1970 by HHJ T L Yang (as the Chief Judge then was) on section 23(1) of the 1964 Revised Edition of Workmen Compensation Ordinance which was an altogether different section that has nothing to do with the Proviso. With respect to Mr Liu, the case is simply irrelevant. The next one was Lee Yui Kai v TD Co, Ltd & Others (DCEC 111/2015, unrep, 31 May 2018, HHJ KW Wong). There the 2nd respondent submitted to judgment in the middle of trial and the outstanding question was whether the 2nd respondent should pay under a Sanderson or Bullock order the applicant’s costs for suing the 1st respondent and the issue turned on whether it had been reasonable for the applicant to have sued the 1st respondent. The facts in that case, very briefly stated, were that the 1st respondent rented certain premises intended to operate therein a hotel for pets. The previous contractor responsible to renovate the premises backed out. Under circumstances disputed between the parties, the applicant, a decoration worker hitherto employed by the 2nd respondent, helped the 1st respondent to drill a hole in the concrete wall at height. While doing so, he fell and sustained injury. The learned judge there, among others, first concluded that the situation was caught by section 3 of the Ordinance which deemed an employer continued to be an employer if he temporarily lent or let on hire the services of his employee. While acknowledging that each case has to depend on its own facts, the learned judge merely stated his conclusion that “a person employed to renovate a premises for use as a dog hotel cannot be regarded as employed for the purpose of dog hotel operator’s trade or business” [13] without much discussion. It was on this sentence that Mr Liu placed heavy reliance. As each case depends on its own facts, I respectfully do not consider that case of much assistance.
96. Mr Cheng referred me to the Privy Council case of Manton v Cantwell [1920] AC 781 in which the Privy Council allowed an appeal against the decision of the Court of Appeal in Ireland and restored the award of the County Court Judge. In that case, Manton worked for farmers as a labourer and he was engaged to thatch the roof of the farmhouse in a small farm owned and ran by Cantwell. Manton fell and sustained serious injury from which he later died. The farmhouse was used for domestic purposes but the County Court Judge found that it was also used as an office for the farm. The Privy Council there was concerned as to whether Manton was excluded as a “workman” under the second part of section 13 of the Workmen’s Compensation Act 1906, which part was pari materia with the Proviso, which provided:-
“‘Workmen’ does not include any person employed otherwise than by manual labour …., or a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer’s trade or business.”
97. Three of the four Law Lords who have delivered a separate judgment were emphatic that, in considering “for the purposes of the employer’s trade or business” there should be no general rules or general propositions of law, and the question should be decided on the particular circumstances of each case. In allowing the workman’s appeal, Lord Birkenhead considered the reparation in the roof of the farmhouse “necessary for his business”[14]; Viscount Finlay opined that the work of thatching the roof of the farmhouse would be considered as “in the course of the farmer’s business”[15] , “incidental to the business of a farmer”[16] and “within the business of the farmer”; Lord Shaw of Dunfermline opined that the job was “intimately connected with the trade or business of the farm” and “without the house the reasonable conduct of the business would have been impossible”.
98. Manton had clearly decided that the phrase “for the purposes of the employer’s trade or business” was not to be construed in the narrow and rigid way now advocated by Mr Liu. Following that decision respectfully, I would hold against that contention.
99. I find myself guided by the learned Law Lords’ analyses.
100. In this case, I find the following relevant facts from the evidence of R3, which I accept:-
(1) The Premises were intended to be used by R3/R4 exclusively for the business purpose of R3/R4, namely to use it as R4’s office, showroom and storage facilities.
(2) The Demolition Work was part of the renovation of the Premises meant to improve it aesthetically, to use Unit A and Unit B as one larger unit to facilitate the business of R3/R4, and to make room for placing cabinets for display and storage purposes.
(3) R4 was wholly owned by R3 who was R4’s only shareholder and director.
101. I take into consideration that the Ordinance should be construed with the purposive approach. The purpose of Ordinance is to provide for appropriate compensation to be paid by employers and principal contractors to employees to afford protection to employees from the misfortune of work accidents. I also take into consideration the fact that it is very common that many employees are engaged as casual workers, particularly in the construction and renovation field. Therefore, the narrower and more restrictive the construction of the phrase “for the purposes of the employer’s trade or business” in the Proviso, the greater the number of casual workers engaged by businesses to do various odd jobs or specific engagements would be excluded from the protection of the Ordinance.
102. In Manton, though the farmhouse was used partly as an office and partly for domestic purposes, the Privy Council analyzed and came to the views as set out in paragraph 97 above. On the facts as found, especially that the Premises would be used exclusively for the business purposes of R3/R4, and bearing in mind the considerations I mentioned above, I take the view that the Demolition Work was incidental to, necessary, closely connected to, and within the business of R3/R4 such that I find that it was for the purposes of the business of R3/R4 and therefore the Proviso is not applicable.
Was R3, or R4, or both liable as the employer?
103. Mr Liu strenuously contended that only R4 should be liable, and not R3. From the available materials and evidence before this court, R4 was and remains an empty company.
104. Mr Liu relied on the fact that the water proofing product business was intended to be operated by R4 and the tenancy agreements of the Premises were made by R4 as the tenant. R3 as a director of R4 therefore was only R4’s agent. Mr Liu further submitted that in the Ordinance, only the employer was liable to pay compensation and that there is no provision in the Ordinance making the agent of the employer liable.
105. Mr Cheng submitted that R3 was in fact the employer. Alternatively, he referred to the trite principle of agency law, that an agent of an undisclosed principal is also personally liable together with the principal.
106. As the liability to pay employees’ compensation is a liability created by statute, I for one have reservation as to whether the general law of agency could automatically apply unless the same is provided by the provisions in the Ordinance. However, I think the matter is straight forward and there is no need to consider that matter.
107. Under section 2(1), quoted above, an employee is one who entered into a contract of service with the employer. The employer therefore is the person, or entity, with whom the employee entered into that contract of service.
108. I found above that the applicant entered into a contract of employment through the recruit of R1 as ganger. I rejected R3/R4’s case and evidence that it was specifically mentioned by R3 to R1 in any of the 1st and 2nd R3R1 Conversations that R4 was indeed the entity (and not R3) that sought R1’s help to demolish the Partition Walls. That being the case, I find as a fact that the contracting party was R3 and R3 therefore was the applicant’s employer. If there were an agency relationship between R3 and R4, it would be up to R3 to take steps to seek redress from R4.
109. I do not find the fact that R4 was the tenant of the Premises or that the water proofing product business was intended to be operated by R4 of relevance as I find that at the time of the formation of the contract of service R1 (or the applicant) simply has not been informed of these matters, and R1 was dealing with R3 personally. Moreover, it is trite that the contracting parties are respectively the one who has made the offer and the one who has accepted it unconditionally in the process of the formation of contract, which parties may or may not be the person receiving the benefit under the contract.
Conclusion on liability
110. In the premises, I hold and conclude that R3 was the employer of the applicant and is solely liable to pay the applicant the employees’ compensation assessed below.
Section 9 compensation
111. Based on the age of the applicant, the multiplier of 48 for the purpose of section 9 was agreed by all parties.
112. The Certificate of Review of Assessment issued on 29 December 2016 (“theForm 9”) certified that the loss of earning capacity was 1.5%. The applicant appealed against this assessment under section 18 of the Ordinance. Only the applicant filed a single orthopaedic expert report of Dr Ko Put Shui Peter dated 17 August 2017. In that report, the expert opined loss of earning capacity of 3-4%. At trial, the parties came to an agreement that the loss of earning capacity by the applicant was 3%. I so find and allow the section 18 appeal accordingly.
113. It is also common ground that the applicant’s earnings would be calculated at the rate of HK$700 a day.
114. For the calculation of earnings, the only disputed matter is the average number of days the applicant has worked in a month. The applicant contended he has worked 24 to 26 days a month. In cross-examination, the applicant said, which I find, that he was picky in choosing his work in that he only worked for overseas Chinese as he was wary that non-overseas Chinese would cheat him, and he would not take up jobs that were too tough or strenuous and he would rather stay home. The applicant also said in evidence that on good days he could work up to 5 to 6 days a week and on bad days 4 to 5 per week. Considering his being picky as above-mentioned and his tendency to exaggerate some, I find on average that he worked 18 days a month.
115. The applicant’s compensation under section 9 therefore is: HK$700 x 18 x 48 x 3% = HK$18,144.
Section 10 compensation
116. The Form 9 certified that the periods of absence from duty as a result of the injury were: 4 December 2014 to 13 July 2016, 11 August 2016 to 7 September 2016, 22 September 2016 to 5 November 2016 and 19 November 2016 to 7 December 2016. It is common ground that the 4 periods totalled to 680 days of absence.
117. The compensation to be awarded to the applicant under section 10 is therefore: HK$700 x 18 x 680/30 x 4/5 = HK$228,480.
Section 10A compensation
118. The medical expenses for the purpose of section 10A were agreed by all parties at HK$9,841. I so award.
Disposal
119. In the premises, I adjudge that R3 is liable to pay the applicant employees’ compensation in the total sum of HK$256,465 (HK$18,144 + HK$228,480 + HK$9,841) together with interest at half judgment rate from the date of the Accident to the date of this judgment, and thereafter at full judgment rate until full payment.
120. On costs, I take the provisional view that (a) it was unreasonable in all the circumstances for the applicant to join R2, (b) but it was reasonable for him to join R1, and (c) as R3 and R4 are represented by the same team of legal representatives and they have been running the same case together. I therefore make this costs order nisi:-
(1) The applicant do pay R1 and R2 their costs;
(2) R3 do pay the applicant his costs which shall include the costs the applicant is liable to pay R1;
(3) There be no order as to costs between the applicant and R4;
(4) There be certificate for counsel for the applicant, R1 and R2; and all the costs above are to be taxed if not agreed; and
(5) The applicant’s, R1’s and R2’s own costs are to be taxed according to the Legal Aid Regulations.
121. Unless any party applies by summons to vary the costs order nisi within the next 21 days, the same shall become absolute.
122. I thank Mr Chung, Mr Cheng, Mr Wong and Mr Liu for their assistance.
| | ( KC Chan ) |
| | District Judge |
Mr Gary KH Chung, instructed by Szwina Pang, Edward Li & Co, assigned by the Director of Legal Aid, for the applicant
Mr Alfred Cheng, instructed by B Mak & Co, assigned by the Director of Legal Aid, for the 1st respondent
Mr Wong Chi Kwong, instructed by Wan and Leung, assigned by the Director of Legal Aid, for the 2nd respondent
Mr Jerome Liu, instructed by K K Lai & Co, Solicitors, for the 3rd and 4th respondents
[1] P207 of the Trial Bundles
[2] P192 and 193 of the Trial Bundles
[3] P194 to 196 of the Trial Bundles
[4] §1(b) of the Re-Re-Amended Application, which reads in Chinese “或者，上述申請人於該關鍵時間是受僱於第一答辯人及/或第二答辯人，而第一答辯人及/或第二答辯人是第一答辯人及/或第三答辯人及/或第四答辯人，即«僱員補償條例» (“本條例”) 於所指的總承判商，的次承判商。”
[5] [2007] 1 HKLRD 951
[6] R3’s witness statement filed on 30 July 2018 was filed in his capacity as a witness for R1 and R2 and not yet as a respondent.
[7] Actual Chinese words used in evidence were “判”, “包”and “ 打工”
[8] §8 of his supplemental witness statement dated 24 June 2019 at p 162 of the Trial Bundles
[9] R1’s at §6 of his witness statement dated 11 January 2018. R3’s at §2 of his witness statement dated 28 February 2018
[10] CACV 214/1998, unrep, 26 February 1999
[11] “… 伍炳榮說拆牆工程需要3個人做，他要和另外兩個朋友一起先到該單位現場視察。” (§2 of R3’s witness statement dated 28 February 2018). “… 第一答辯人伍炳榮於2014年12月4日 (以下簡稱”當天”) 找來了兩位朋友一起到九龍旺角西洋菜街2R號3字樓B室 (以下簡稱”該單位”) 準備一起做拆牆工程。” (§8 of R3’s supplemental witness statement dated 24 June 2019)
[12] DCEC 758/2008, unrep, 2 August 2010, HHJ H C Wong
[13] In paragraph 57 of the judgment
[14] P787
[15] P789
[16] P789