Case Detail

DCEC 535/2017

[2021] HKDC 258

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 535 OF 2017

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IN THE MATTER OF AN APPLICATION BETWEEN
	LAM HO LUN (林浩麟)	Applicant
and
	吳耀文	1^st Respondent
	CHAN’S BUILDING CONTRACTORS LIMITED (創發承建有限公司)	2^nd Respondent
	GRAND HARVEST ENGINEERING LIMITED (祥豐工程有限公司)	3^rd Respondent
	SUN FOOK KONG CONSTRUCTION LIMITED trading as SUN FOOK KONG GROUP (新福港營造有限公司經營新福港集團)	4^th Respondent

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Before: Deputy District Judge Connie Lee in Court

Date of Hearing: 2, 3 & 5 February 2021

Date of Judgment: 8 March 2021

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JUDGMENT

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A. Introduction

1. This is the trial of an application by the applicant pursuant to sections 9, 10 and 10A of the Employee’s Compensation Ordinance Cap 282 (the “ECO”) for compensation for the injury caused to him in an accident which took place on 12 March 2015 (the “Accident”).

2. The applicant was born on 21 October 1979. At the time of the Accident, he was 35 years old.

3. At the material time, the applicant was a casual scaffolding worker. On 12 March 2015, the applicant worked at an industrial building in Tuen Mun (the “1^st Site”), a construction site in Sheung Shui (the “2^nd Site”) as well as the construction site at Sheung Shui Slaughterhouse (the “Slaughterhouse”). After the Applicant finished the scaffolding work at the Slaughterhouse at about 4:15 pm, the 1^st respondent drove the workers, including the applicant, to the warehouse situated near lamppost VD2125 at Kung Um Road, Yuen Long, New Territories, Hong Kong (the “Warehouse”) to tidy up the scaffolding tools and materials. At about 5:00 pm, after they finished their work at the Warehouse and were about to leave, and whilst the applicant was leaving and closing the metal gate of the Warehouse (the “Gate”), his right ankle was cut by a sharp metal sheet at the bottom of the Gate.

4. According to the Application, the applicant was an employee directly employed by the 1^st respondent who was in turn a sub-contractor of the 2^nd respondent. The 2^nd respondent was in turn a sub-contractor of the 3^rd and/or 4^th respondent. It is further averred that the 3^rd respondent was a sub-contractor of the 4^th respondent who was the principal contractor at the material time.

5. The 2^nd respondent filed an Answer and a witness statement of a 陳瀟帆 (ie the 2^nd respondent’s director) to oppose the Application. By an order dated 23 October 2019, the 2^nd respondent’s previous solicitors ceased to act. Since then, it has not participated in the proceedings. It did not appear at the trial.

6. I have been referred to the 3^rd Affirmation of Kwok Ka Chun, an affirmation of service filed by the applicant’s solicitors. The relevant orders and papers have been served on the 2^nd respondent, who had been reminded to attend trial. I am satisfied that the trial should proceed in its absence.

7. As per the Order of HH Judge Leung dated 3 June 2020, this trial was conducted in English with oral evidence being received in Punti. A court interpreter was assigned to assist the 1^st respondent.[1]

B. The Parties’ Respective Case

8. Insofar as liability is concerned, it is now common ground that the Accident occurred at the Warehouse, which should be that of the 2^nd respondent. There is also no dispute that the Accident occurred in the course of the applicant’s employment.

9. As set out above, the applicant’s case is that the 1^st respondent was his direct employer and the 1^st respondent was in turn the 2^nd respondent’s sub-contractor. The 2^nd respondent was the sub-contractor of the 3^rd or 4^th respondents. It is said that the applicant reported his injury and sick leave to the 1^st respondent. Upon the arrangement by the 1^st respondent, the 3^rd and/or 4^th respondent(s) paid a sum of HK$50,000 being advance payment to the applicant on 27 May 2015.

10. The 1^st respondent accepts that he was the sub-contractor of the 2^nd respondent. He is however adamant that the applicant was not his employee. Rather, his case is that they were “partners” (合伙人或拍檔).

11. The 2^nd respondent only admits in its Answer that it was the sub-contractor of the 3^rd respondent.

12. The 3^rd and 4^th respondents’ case is that when the Accident occurred at the Warehouse, whoever the applicant’s employer might be, neither of them was the main contractor and hence they should not be liable for any compensation payable to the applicant. Their position is that:-

(1) There was never any direct sub-contract between the 1^st respondent and the 3^rd and/or 4^th respondents. This is not seriously disputed.
(2) The 2^nd respondent was a sub-contractor of the 3^rdrespondent and/or the 4^th respondent and the 3^rd respondent was in turn a sub-contractor of the 4^th respondent who was the principal contractor only in respect of the refurbishment and maintenance work carried out at the Slaughterhouse.
(3) The scope of work at the Slaughterhouse sub-contracted to the 2^nd respondent related to the installation of a one-level double scaffold with the time estimate of work from 1 pm to 5 pm. Installation of toe boards was specifically excluded from the scope of work. The scaffolding was completely built up on 12 March 2015 at around 4:30 pm.
(4) The 2^nd respondent and its team of scaffolders did not work exclusively for the 3^rd and/or 4^th respondents on 12 March 2015. The Slaughterhouse was merely one of their scaffolding tasks on that day.
(5) At the time when the 1^st respondent and the applicant left the Slaughterhouse, the 2^nd respondent’s crew had completed the works thereat, as certified by a Form 5[2] signed by the 1^st respondent.
(6) The 3^rd and 4^th respondents did not have any connection with the Warehouse nor with any activities took place thereat.
(7) The payment of HK$50,000 to the applicant on 27 May 2015 was made by mistake, under the misapprehension that the injury of the applicant was sustained at the Slaughterhouse.

13. Insofar as quantum is concerned, the Employees’ Compensation (Ordinary Assessment) Board issued a certificate of assessment (“Form 7”)[3] on 21 July 2016 which assessed the applicant’s:-

(1) Period of absence from duty necessary as a result of the injury from 12 March 2015 to 19 October 2015;
(2) Loss of earning capacity permanently caused by the injury as 2%.

14. None of the respondents seriously challenge the above assessment or the applicant’s case that his average monthly earning during the previous 12 months before the Accident was about HK$30,129.

15. However, should the 1^st and/or 2^nd respondent(s) be found liable for the applicant’s injury, the 3^rd and 4^th respondents’ case is that the HK$50,000 paid to the applicant on 27 May 2015 should not be deducted from the amount of compensation payable to the applicant (if any).

C. The Key Issues For Determination

16. The key issues for determination are:-

(1) At the time when the Accident occurred on 12 March 2015, whether the 1^st respondent was the applicant’s employer.
(2) Whether the work carried out by the applicant at the Warehouse when the Accident occurred on 12 March 2015 was for the 2^nd respondent and was sub-contracted to the 1^st respondent.
(3) Whether the work carried out by the applicant at the Warehouse when the Accident occurred on 12 March 2015 was part of the work undertaken by the 3^rd and/or 4^th respondents and was sub-contracted to a sub-contractor, namely, the 2^nd respondent.
(4) The amount of compensation as entitled by the applicant (if any).

D. The Evidence

17. There is little factual dispute which would materially affect the determination of the key issues in this trial. This is reflected in the brevity of the cross-examination of the witnesses.

18. The approach for the assessment of the credibility of witnesses is trite. The court should take into account the following:-

(1) Whether the party’s case is inherently plausible or implausible;
(2) Whether the party’s case is, in a material way, contradicted by other evidence (documentary or otherwise) which is undisputed or indisputable;
(3) Where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests. This is relevant to the assessment of his overall credibility;
(4) The demeanour of the witnesses.

See: Lee Fu Wing v Yan Po Ting Paul.[4]

D1. The Applicant’s Evidence

19. In respect of the applicant’s case, only the applicant himself gave evidence. I am of the view that the applicant’s evidence is generally reliable and I accept the same. His answers regarding the essential part of his case were clear and consistent:-

(1) When asked by Mr Gidwani, counsel acting for the 3^rd and 4^th respondents regarding the payment of HK$50,000 on 27 May 2015, the applicant gave firm answers that it was 吳耀文 (ie the 1^st respondent) and a “Ken” (ie from the 2^nd respondent) who told him there was a cheque to collect (有票攞), and he did not know what had been arranged. At that time, he did not even know he was at the site office of the 3^rd respondent. Further, he only signed on the 按期款項收據 when he was handed the same without reading the words therein ie he sustained injury at the Slaughterhouse; and no one had explained the same to him. This is consistent with what he stated in his witness statement.
(2) The applicant was however forthcoming and agreed that the Accident did not happen at the Slaughterhouse. He only knew that the 1^st respondent was his employer and he was driving a truck with the words “創發”. He was not aware of the precise relationship between the 1^st and 2^nd respondents. He filled in the 2^nd respondent as his employer on the Accident Notification as he did not know how to write the full name of the 1^st respondent. He put down the name of “陳瀟帆” as the contact person of the 2^nd respondent as he had called him before and after he had “searched online”. The applicant also agreed that he was not aware of any “main-contractor(s)” at the time. This is consistent with the information filled in the Accident Notification[5] and the Declaration[6] by him on or about 14 August 2015.
(3) The applicant also agreed that he was not responsible for toe-board (踢腳板) installation and he also agreed that the act of closing the gate of the Warehouse had no relevance with installing any toe-board.

D2. The 1^st Respondent’s Evidence

20. The 1^st respondent gave evidence to refute the allegation that he was the employer of the applicant. He however accepted that it was him who drove the 2^nd respondent’s truck to pick up the applicant and other co-workers to work, and he would pay the applicant at the end of the month based on a daily rate of HK$1,500.

21. When asked why the Labour Department would suggest that the Form 2 dated 10 September 2015[7] and the notice of Change of Information dated 12 December 2015[8] were signed by him[9], he only repeatedly suggested that he did not fill in the information on the Form 2 indicating that he was the employer and the 4^th respondent was the principal contractor. His evidence is that he forgot if he had signed on the same. I am of the view that the 1^st respondent was evasive and this part of his evidence is simply not credible.

22. During cross-examination, the 1^st respondent also suggested that after the scaffolding work was completed at the Slaughterhouse on 12 March 2015, he suddenly received a call from Ken Wong of 創發 (ie the 2^nd respondent) asking him to work on the toe-board installation. He therefore drove to the Warehouse to get the rope and toe-board (ie 補料), planning to head back to the Slaughterhouse. Again, this part of his evidence is incredible and unreliable. The same is flatly contradicted by:-

(1) His own admission that he signed off the Form 5[10] to confirm the scaffolding work at the Slaughterhouse had already been completed;
(2) The applicant’s evidence that he was not responsible for the toe-board installation and the Accident was not related to the Slaughterhouse;
(3) The relevant quotation[11] for the amount of HK$2,500 issued by the 2^nd respondent to the 4^th respondent for the scaffolding work at the Slaughterhouse which expressly stated that “但不包括踢腳板…”;
(4) The relevant invoice[12] issued for the same amount of HK$2,500;
(5) His witness statement and Answer which never mentioned the phone call nor the sudden or last minute request to install any toe-board at the Slaughterhouse after he and his crew left the Slaughterhouse.

D3. The Evidence of陳瀟帆

23. The 2^nd respondent only filed a witness statement of 陳瀟帆. As Mr Chan did not give evidence at the trial, I have disregarded the contents of his witness statement.

D4. Evidence Given In Respect Of The 3^rd and 4^th Respondents’ Case

24. The 3^rd and 4^th respondents called the following witnesses to give evidence at trial:-

(1) Mr Li Kin Shing;
(2) Mr Wong Sai Man;
(3) Mr Au Chun Ho; and
(4) Mr Leung Kin Man.

25. Although Mr Wong Fai Chi also prepared a witness statement, he did not attend the trial to give evidence. I have disregarded the contents of his witness statement.

(i) Mr Li Kin Shing’s Evidence

26. Mr Li is a foreman of the 3^rd respondent. He gave evidence that after the 1^st respondent had signed off the Form 5 on 12 March 2015, he had never instructed anyone to add anything, including the toe-board to the scaffolding already built up. He also produced a screenshot of a Whatsapp message[13] from “Ken”, the foreman of the 2^nd respondent who informed him on 12 March 2015 at around 10:28 pm that “有位同事系上水屠房屈親腳…請向新福港備案”.

27. Mr Li’s evidence is not particularly controversial. The 1^st respondent did not challenge his evidence by way of cross-examination notwithstanding he was specifically invited to do so. I find Mr Li to be an honest witness and where the 1^st respondent’s evidence is inconsistent with that of Mr Li, I will prefer and accept Mr Li’s evidence.

(ii) Mr Wong Sai Man’s Evidence

28. Mr Wong is a senior manager of the 3^rd respondent. He mainly gave evidence that he had via “Armful”, a related company also owned by the boss of the 3^rd respondent ie Mr Au Chun Hung, chased the 2^nd respondent for production of original medical records, sick leave certificates etc. for the purpose of claiming insurance, but to no avail. He also knew about the payment of HK$50,000 to the applicant on 27 May 2015 but had only learnt about that after the cheque was taken away by the applicant. Again, Mr Wong’s evidence is not controversial and the same is not seriously challenged by the applicant nor the 1^st respondent.

(iii) Mr Au Chun Ho’s Evidence

29. Mr Au is the senior site supervisor of the 3^rd respondent and the younger brother of the “boss” ie Mr Au Chun Hung. He gave evidence in relation to the payment made to the applicant by way of his personal cheque on 27 May 2015 but dated 26 May 2015. Under cross-examination, he explained that he issued the personal cheque[14] when the applicant, the 1^st respondent and Ken of the 2^nd respondent came up to the 3^rd respondent’s site office just to end the matter quickly since “當時氣氛唔好，想打發佢地走”. This is largely consistent with his witness statement and I find such explanation reasonable. In particular, it is not seriously disputed that his general impression as at 27 May 2015 was that the applicant was injured at the Slaughterhouse and HK$50,000 was not a big sum to him.

(iv) Mr Leung Kin Man’s Evidence

30. Mr Leung is a Senior Registered Safety Officer of the 4^th respondent. His evidence mainly relates to a telephone conversation with the applicant on 13 January 2016, who confirmed that he had reported that the injury took place at the Warehouse. Mr Leung also confirmed that he had not read the Form 2 prior to the telephone conversation and he only received the Accident Notification from the Labour Department on or about 5 January 2016[15]. Again, Mr Leung’s evidence has not been seriously challenged.

E. Analysis of the Key Issues

E1. Issue 1: Whether The 1^st Respondent Was The Applicant’s Employer

31. Having examined all the features of the relationship as between the applicant and the 1^st respondent against the background of the indicia set out in Poon Chau Nam v Yim Siu Cheung & Anor[16], I am satisfied that as a matter of overall impression, the applicant was at the material time the 1^st respondent’s employee.

32. First, it was the 1^st respondent who took up work or projects mainly from the 2^nd respondent and he would call the applicant and other co-workers when there was work.

33. Second, it was the 1^st respondent who called the applicant to work for the period from 9 March 2015 to 12 March 2015. The 1^st respondent drove the 2^nd respondent’s truck to pick up the applicant and two other co-workers to work on different sites, including the Slaughterhouse, before heading to the Warehouse on 12 March 2015.

34. Third, it was the 1^st respondent who paid the applicant and the other co-workers at the end of the month based on a daily rate of HK$1,500. The 1^st respondent accepted that he was the one who did the calculation and made payments to the applicant and the other co-workers.

35. Fourth, the applicant did not have to bear any financial risk or management responsibilities.

36. It is not disputed that the applicant did not have to provide any tools or materials and/or hire any other co-workers to undertake the work arranged by the 1^st respondent. In fact, the 1^st respondent accepted during cross-examination that he would not inform the applicant beforehand as to where they would be heading or what they would have to do.

37. Rather, the 1^st respondent accepted that it was him who was responsible for liaising or contacting the 2^nd respondent regarding the carrying out of work orders as well as following up on the applicant’s claim for compensation for his injury. He was also the one who instructed the applicant and the co-workers to work. As such, the applicant had to report the Accident to him as the applicant would not otherwise know how or who else to notify. The applicant only liaised with the 1^st respondent regarding his claim for compensation and he handed his sick leave certificates to the 1^st respondent. It was also the 1^st respondent who asked the applicant to attend the site office of the 3^rd respondent on 27 May 2015 to get the cheque of HK$50,000.

38. Fifth, according to the Form 2, the 1^st respondent was stated as the employer. It was also confirmed by the Labour Department that the Form 2 together with the Notice of Change of Information were signed by the 1^st respondent and the 1^st respondent had no good explanation to refute the same.

39. There is no dispute that the Accident arose in the course of the applicant’s employment. Under section 5(4)(a) of the ECO, an accident arising in the course of an employee’s employment shall be deemed, in the absence of evidence to the contrary, also to have arisen out of that employment. Accordingly, the 1^st respondent shall be liable to pay compensation under section 5 of the ECO.

E2. Issue 2: Whether the 2^nd Respondent Sub-Contracted The Work Carried Out At The Warehouse To The 1^st Respondent

40. As the applicant did not plead an alternative case that the 2^nd respondent was his direct employer and there was no application to amend the Application to do so, I do not need to consider this issue which was only raised in Mr Cheung’s closing submissions.

41. Against the evidence available, I am however satisfied that the work carried out at the Warehouse when the Accident occurred in the late afternoon on 12 March 2015 was for the 2^nd respondent, and the same was sub-contracted to the 1^st respondent.

42. First, the 2^nd respondent cannot dispute that the 1^st respondent was driving its truck bearing the name of “創發”, and the Warehouse belonged to the 2^nd respondent.

43. Second, the following evidence remains unchallenged and I have accepted the same:-

(1) At the material time on 12 March 2015, the 1^st respondent was driving the truck bearing the name of “創發” with the applicant and the co-workers heading to the Warehouse.
(2) The 1^st respondent basically only did work for the 2^nd respondent (我基本上淨係接佢地既工作，好少接其他人).
(3) The 1^st respondent reported the applicant’s injury to the 2^nd respondent.

44. According to section 24 of the ECO, the 2^nd respondent as principal contractor shall be liable to pay compensation.

E3. Issue 3: Whether The Work Carried Out At The Warehouse Was Part of The Work Undertaken By the 3^rd and/or 4^th Respondents and Subcontracted To The 2^nd Respondent

45. Section 24 of the ECO provides that:-

“(1) Where any person (in this section referred to as the principal contractor), in the course of or for the purposes 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; and where compensation is claimed from or proceedings are taken against the principal contractor, then, in the application of this Ordinance, references to the principal contractor shall be substituted for references to the employer, except that the amount of any compensation calculated by reference to earnings shall be calculated by reference to the earnings of the employee under the employer by whom he is immediately employed.” (emphasis added)

46. In the circumstances, the 3^rd and/or the 4^th respondents would only be liable for the applicant’s injury if the same was sustained at the time when the applicant was executing work relating to the whole or any part of the work pursuant to the subcontract between the 2^nd and 3^rd and/or 4^th respondents undertaken by the 3^rd and/or 4^th respondent.

47. Against the totality of the evidence in this case, I am not satisfied that the applicant’s closing of the gate at the Warehouse was related to the execution of the agreed sub-contract work between the 2^nd and 3^rd respondents and/or the 4^th respondent.

48. First, it is not seriously disputed that the 2^nd respondent was a sub-contractor of the 3^rd respondent who was in turn a sub-contractor of the 4^th respondent only in respect of the erection of a bamboo scaffolding at the Slaughterhouse.

49. Second, the 1^st respondent confirmed that he signed on the Form 5 for the scaffolding. The same is a statutory form to be filled in after completion of the relevant work. Accordingly, the 1^st respondent also accepted that, by signing the same, he had certified that the scaffolding had been completely built by around 4:15 pm on 12 March 2015.

50. Therefore, at that point of time, the sub-contract work as between the 2^nd respondent and the 3^rd and 4^th respondents must have already been completed before the 1^st respondent’s crew, including the applicant, left the Slaughterhouse.

51. Third, I do not accept the 1^st respondent’s evidence or submissions that the scaffolding already built up at the Slaughterhouse required his continual service for toe-board installation as demanded by the 2^nd respondent. The same is also flatly contradicted by:-

(1) The quotation dated 11 March 2015[17] which excluded the installation of toe-board.
(2) The invoice[18] issued by the 2^nd respondent to the 4^th respondent which only included the same amount of HK$2,500 as that of the quotation. This indicates that there was no additional work outside the scope of the original quotation undertaken by the 2^nd respondent.
(3) The applicant’s own evidence that his duties did not include toe board installation and he was never asked to do so.

52. Fourth, for reasons already set out above, I do not accept the 1^st respondent’s fresh allegation made during the course of cross-examination that the installation of toe-board was only suddenly requested by Ken Wong of the 2^nd respondent by way of a phone call such that the 1^st respondent had to go to the Warehouse to replenish materials including the toe-board.

53. Fifth, against the aforesaid evidence, the fact that the 4^th respondent was stated as the as the principal contractor on the Form 2 and the Change of Information is neither here nor there. In particular, I have found the 1^st respondent’s inability to confirm whether he signed on the same and his denial that he was the one who filled in such information to be incredible.

54. Sixth, where the pre-conditions of section 24 of the ECO are not satisfied, the applicant cannot rely on the payment of HK$50,000 per se as evidence to hold the 3^rd and/or 4^th respondents liable for the applicant’s injury as the principal contractor(s).

55. It is not seriously disputed that the general impression on the part of the 3^rd and 4^th respondents as at 27 May 2015 was that the applicant was injured at the Slaughterhouse. This is based on misinformation provided to the 3^rd respondent by “Ken” of the 2^nd respondent by a Whatsapp message[19]. Accordingly, the 按期款項收據[20]for the HK$50,000 payment also stated that the injury was sustained at the Slaughterhouse.

56. I also accepted Mr Au’s explanation that the payment he made by way of his personal cheque was to end the matter quickly.

E4: Issue 4: Quantum

(i) Form 7

57. As the applicant had withdrawn his appeal against the Form 7 assessment[21], the said assessment constitutes conclusive evidence by virtue of section 16H of the ECO.

(ii) Section 9 Compensation

58. The applicant was 35 at the time of the Accident. None of the respondents seriously challenged the applicant’s evidence that his average monthly earnings during the 12 months before the Accident was HK$30,129[22].

59. Since it exceeds the specific amount of compensation stated in the Sixth Schedule at the time of the Accident (ie HK$26,070), the statutory maximum should be adopted.

60. The applicant is entitled to compensation under section 9 in the amount of HK$50,054.40 ie HK$26,070 x 96 months x 2%.

(iii) Section 10 Compensation

61. The applicant is content with the sick leave period of 7 months. As such, he is entitled to compensation under section 10 in the amount of HK$168,722.40 ie HK$30,129 x 7 months x 4/5.

(iv) Section 10A Compensation

62. Based on the available records[23] and receipts[24], the applicant had incurred medical expenses in the amount of HK$2,080. He is entitled to such compensation.

(v) Summary on Quantum

63. In the circumstances, the applicant is entitled to the compensation summarized as follows:-

(1)	Section 9 Compensation:	HK$50,054.40
(2)	Section 10 Compensation:	HK$168,722.40
(3)	Section 10A Compensation:	HK$2080
		__________________
		Total:HK$220,856.80

64. Given my ruling that the 3^rd and/or 4^th respondents are not liable to the applicant under section 24 of the ECO and the payment of HK$50,000 was made by personal cheque of Mr Au Chun Ho, it is not necessary to deduct the HK$50,000 from the total amount of the compensation set out above.

F. Conclusion

65. For the above reasons, I make the following orders:-

(1) The 1^st respondent is liable to pay compensation in respect of the applicant’s injury under section 5 of the ECO;
(2) The 2^nd respondent is liable to pay compensation in respect of the applicant’s injury under section 24 of the ECO;
(3) The Application against the 3^rd and 4^th respondents be dismissed;
(4) The 1^st and 2^nd respondents shall pay compensation in the sum of HK$220,856.80 with interest at half the judgment rate from the date of the Accident ie 12 March 2015 to the date of judgment and thereafter at the judgment rate until full payment.

66. There is no reason why costs should not follow the event. I make a costs order nisi that:-

(1) The 1^st and 2^nd respondents do pay the applicant’s costs of this action, including all costs reserved if any, to be taxed if not agreed with certificate for counsel;
(2) The applicant do pay the 3^rd and 4^th respondents’ costs of this action, including all costs reserved if any, to be taxed if not agreed with certificate for counsel[25];
(3) The applicant’s own costs be taxed in accordance with Legal Aid regulations.

67. The costs order nisi shall become absolute in the absence of any application to vary the same within 14 days of the handing down of this Decision.

68. It remains for me to thank counsel for their assistance.

	( Connie Lee )
	Deputy District Judge

Mr Cheung Yiu Leung, instructed by CL & Co Solicitors, assigned by the Director of Legal Aid, for the applicant

The 1^st respondent was not represented and was acting in person

The 2^nd respondent acting in person, being absent

Mr Victor Gidwani and Mr Joseph Ng, instructed by Winnie Leung & Co, for the 3^rd and 4^th respondents

[1] The court can also arrange an interpreter to orally interpret the contents of this judgment to the 1^st respondent and/or 2^nd respondent if necessary.

[2] [B/134]

[3] [C/431]

[4] [2009] 5 HKLRD 513 at §53.

[5] [C/418-419]

[6] [C/420-421]

[7] [C/424-428]

[8] [C/429-430]

[9] [C/432&456]

[10] [B/134]

[11] [C/530]

[12] [C/531]

[13] [B/128]

[14] [B/114]

[15] [B/237]

[16] (2007) 10 HKCFAR 156 at §§11 to 19.

[17] [B/170]

[18] [B/172]

[19] [B/128]

[20] [B/113]

[21] [A/31]

[22] Rounded off from HK$30,129.17 [B/95-96]

[23] [C/303-304]

[24] [C/305-332]

[25] I have considered Mr Cheung’s brief submissions seeking a Bullock Order against the 1^st and 2^nd respondents should I dismiss the Application against the 3^rd and 4^th respondents. However, I am not prepared to grant the same at this stage without having considered full submissions including the precise grounds for imposing the Bullock Order; the financial circumstances of the 1^st and 2^nd respondents and why a Bullock Order should be preferred over a Sanderson Order where the applicant is legally aided.

DCEC 535/2017

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 535 OF 2017

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IN THE MATTER OF AN APPLICATION BETWEEN
	LAM HO LUN (林浩麟)	Applicant
and
	吳耀文	1^st Respondent
	CHAN’S BUILDING CONTRACTORS LIMITED (創發承建有限公司)	2^nd Respondent
	GRAND HARVEST ENGINEERING LIMITED (祥豐工程有限公司)	3^rd Respondent
	SUN FOOK KONG CONSTRUCTION LIMITED trading as SUN FOOK KONG GROUP (新福港營造有限公司經營新福港集團)	4^th Respondent
and
	THE PARTICIPATING INSURERS OF THE EMPLOYEES’ COMPENSATION INSURANCE RESIDUAL SCHEME BUREAU LIMITED	Intervener

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Before: HH Judge Levy in Chambers

Date of Hearing: 6 December 2017

Date of Ruling: 6 December 2017

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RULING ON COSTS

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1. On 14 September, the insurer of the 2^nd respondent, whom I will call as “the Intervener”, issued a summons returnable on the same date as the first call-over hearing on 15 September, to ask for leave to be joined in these proceedings. In support of this summons was an affidavit of Mr Reeves (the Intervener’s solicitor), in which the reasons for the making of the application were given.

2. At the hearing on 15 September, the 1^st respondent was absent. The 2^nd respondent was not represented and attended by a manager.

3. Since the summons was issued shortly before the hearing, the applicant indicated that it did not have sufficient time to consider the summons.

4. The manager of the 2^nd respondent had indicated to the court that the company would later engage legal representation.

5. The solicitor for the 3^rd and the 4^th respondents, Miss Lau (who also represented them today), at that time informed the court that her clients had no objection to the joinder application. However, she was agreeable to the suggestion made by the applicant’s solicitor to adjourn the summons.

6. Since the summons was only issued the day before the directions hearing, I also took the view that it was appropriate to adjourn the summons. This would, firstly, enable the applicant’s solicitors to have more time to consider the application. Further, the 2^nd respondent at that time was not represented but had indicated to the court that it would engage solicitors. Hence, the summons was adjourned until today for disposal.

7. Several days before the adjourned hearing today, this court had referred the parties to a case similar to the present joinder application made by an insurer in an Employees’ Compensation proceeding, in the case of DCEC 2437/2015[1].

8. The reason why this court wished to draw the parties’ attention to that case, was because in that case the learned Deputy Judge had dealt in great detail with the various considerations a court should take into account when dealing with an application to intervene by an insurer. This court is of the view that, when considering the Intervener’s present joinder summons, it should also be guided by similar considerations.

9. After that case was referred to the parties, apart from Mr Reeves for the Intervener, who had lodged written submissions in which he agreed with these guidelines, no other parties had made any written submissions in relation to it. In Mr Reeve’s written submissions, he was trying to draw to the court’s attention the reasons why the Intervener had chosen to seek to intervene to these proceedings.

10. The applicant’s solicitors before the hearing had filed two appendix D forms. In the first and also the revised appendix D, the applicant’s solicitors did not indicate the applicant’s stance in relation to the joinder summons. It was only at the hearing today that Miss Cheng for the applicant informed this court that the applicant would not oppose the joinder summons and that the applicant was satisfied that costs be costs in the cause. Similarly, the solicitors for the 2^nd, 3^rd and the 4^th respondents all informed the court that they were not opposing the joinder summons.

11. In light of the guidelines or the criteria discussed in the case of DCEC 2437/2015, notwithstanding the stance taken by all the represented parties, this court was concerned as to whether the Intervener had satisfied the criteria for joinder in these proceedings.

12. In the course of the discussions between the court and the solicitor for the Intervener, Mr Reeves had additionally provided to the court further information that was not contained in his affidavit in support. In order to justify the reasonableness of the joinder summons, Mr Reeves had additionally told the court that, whilst the 2^nd respondent was acting in person, at a meeting between his client (the Intervener) and the 2^nd respondent, it was intimated to the Intervener through the 2^nd respondent’s director that the 2^nd respondent, in relation to the alleged incident, was the employer of the applicant.

13. He further told the court that since issuing the summons, there was a new development that would have put his application in quite a different light, namely, the 2^nd respondent has since become represented and also filed an answer giving a bare denial of liability towards the allegation.

14. In order to have a better understanding of the potential liability of the insurer (Intervener), and since the 1^st respondent was acting in person, this court then briefly discussed with the 1^st respondent his stance in relation to the allegation made against him in order to try to understand his position. In that very brief inquiry, it seems that the 1^st respondent would likely deny liability as the employer of the applicant.

15. As a result of this inquiry, Mr Reeves asked the court for some time to take his client’s instructions as to whether or not they should continue to pursue the application to join.

16. After Mr Reeves was able to obtain his client’s instructions, the court was informed that the Intervener would withdraw the summons and not pursue the application to intervene.

17. Insofar as costs are concerned, Mr Reeves asks for an order that there be no order as to costs.

18. The 1^st respondent and the 2^nd respondent agree with this proposed costs order.

19. Yet, the applicant and the 3^rd and 4^th respondents ask for costs to be paid by the 2^nd respondent and the Intervener jointly. The reason given is that the insurer (Intervener) was the party who instituted these proceedings. Upon withdrawal, the Intervener should bear the cost. They propose that costs should be ordered against the 2^nd respondent on the ground that it was the 2^nd respondent which had indirectly caused the Intervener to make the application.

20. In considering whether it is fair to order the Intervener to pay the costs of the applicant and the 3^rd and the 4^th respondents, I should consider whether it was reasonable in the first place for the Intervener to have issued this summons.

21. Given that the insurance policy issued between the Intervener and the 2^nd respondent covers the date of the alleged accident, the insurer (Intervener) always has potential liability under the policy to pay in the event that the 2^nd respondent is liable to pay to the applicant compensation. Such potential liability still exists, notwithstanding the present contention made by the insurer (Intervener) that it is repudiating the liability under the policy in relation to the 2^nd respondent.

22. According to a relevant clause in the insurance policy, the Intervener will be liable to indemnify (the 2^nd respondent) should it be found that the 2^nd respondent was the applicant’s immediate employer. In the circumstances, the Intervener would be most concerned should there be any indication or evidence implicating the 2^nd respondent as the direct employer of the applicant.

23. According to the affidavit in support, there was indeed such evidence, one of which was the notice of the accident filed by the applicant, informing the Labour Department of the alleged accident. In that notice, the applicant named the 2^nd respondent as his employer.

24. Apart from this, as I have referred to earlier on, Mr Reeves at the hearing today had further informed the court of a meeting that I had referred to with the insurer (Intervener) and the 2^nd respondent, at which it was suggested that the 2^nd respondent was the employer.

25. Obviously, this additional information was not contained in his affidavit. Nonetheless, I had no reason to disbelieve that that was the information that the insurer (Intervener) had at the time when this application was issued.

26. Having regard to the fact that the 1^st respondent was not represented and did not even appear in the first hearing and that the 2^nd respondent was also not represented and had not filed any answer to this application, I take the view that it was justified for the Intervener to have been concerned with its potential liability.

27. However, between the last hearing and the hearing today, there has indeed been a new development which at that time of the application did not exist, namely the 2^nd respondent’s serving of an answer denying liability.

28. In the light of the new development as well as the discussions we have had in the court, Mr Reeves’ client, the Intervener, in my view, had taken the extremely sensible steps of withdrawing this application because the development had made it no longer economically and commercially viable to be actively involved with these proceedings.

29. In my view, it is not fair for the applicant’s solicitor as well as the solicitor for the 3^rd and 4^th respondents to ask for costs against the Intervener, given the fact that they had all along taken the stance of not opposing the application. Such stance, in my view, impliedly accepting the summons as being a proper application.

30. For this reason, the fair costs order is that there should be no order as to costs against the Intervener.

31. Neither do I consider it fair to order costs against the 2^nd respondent. Firstly, I do not believe that the assertion made by Mr Reeves today suggesting that the 2^nd respondent had intimated to the Intervener that it had admitted to be the employer was sufficient to make the 2^nd respondent a party to be blamed for this application.

32. It is particularly inappropriate to blame the 2^nd respondent when the applicant in his notice of accident which I had referred to earlier in Mr Reeves’ supporting affidavit, had named the 2^nd respondent as the employer, which allegation in fact seems to be inconsistent with the averments now contained in the employees’ compensation application. In the application, the applicant is now alleging the 2^nd respondent as the contractor of the 1^st respondent, not naming the 2^nd respondent as the employer as it had previously stated in the notice of accident.

33. For all these reasons, I will not order the 2^nd respondent to pay costs to the applicant and the 3^rd and 4^th respondents.

34. So my order is this: -

(1) Leave to the Intervener to withdraw;
(2) No order as to costs; and
(3) The applicant’s own costs are to be taxed in accordance with the Legal Aid Regulations.

	(Katina Levy)
	District Judge

Ms Cheng Yi Ming, of CL & Co Solicitors, assigned by the Director of Legal Aid, for the applicant

The 1^st respondent appeared in person

Ms Liu Kit Sum Margaret, of Chong & Partners LLP, for the 2^nd respondent

Ms Monita Lau, of Fongs, for the 3^rd and 4^th respondents

Mr Mark Reeves, of Munros, for the intervener

[1]Shing Ho Wa, a mentally incapacitated person by his mother and next friend, Lam Wai Fong v Really Super Limited & Anor, DCEC 2437/2015 (unrep), Deputy District Judge S.H. Lee, 10 Nov 2016.

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