IP WAH v. CHEUNG CHUN CHIU

HCLA 9/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 9 OF 2006

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. 4988 OF 2005)

____________

____________

______________

J U D G M E N T

______________

Introduction

1.  This is an appeal against the award of the Labour Tribunal (“the Tribunal”) made on 16 February 2006.  The Tribunal ordered the appellant (the defendant in Claim No. LBTC 4988/2005) to pay various sums (totalling about $154,000) being wages in lieu of notice, annual leave pay and severance payment.  Leave to appeal was given earlier.

2.  The main issue between the parties (both before the Tribunal and in this appeal) is whether the claimant was the appellant’s employee.  Quantum has also been made an issue by the appellant in this appeal.

Grounds of Appeal

3.  The grounds of appeal for which leave has been given are:-

(a)     the Tribunal erred in admitting a tape-recorded conversation (and the related transcript) when the said conversation was a “without prejudice” discussion between the parties;

(b)    the Tribunal wrongfully disallowed the appellant to cross-examine the claimant about how the said tape recording was obtained and why the claimant did not inform the appellant of the same;

(c)     the Tribunal failed to take into account an inconsistency between the amount of salary stated by the claimant in his application to the Occupational Deafness Compensation Board (“the ODC Board”) and that stated in his testimony;

(d)    the Tribunal failed to take into account the claimant did not produce any record or written evidence in support of the amount of salary claimed by him.

These grounds will be dealt with in turn below.

“Without Prejudice” Conversation

4.  It is undisputed the parties met in a café on 30 April 2005.  The purpose of the meeting has been mentioned in the claimant’s witness statement:-

“零五年四月卅日張振潮先生曾約本人出外和解，在香港威靈頓街寶烽餐廳內，他要求我撤鎖勞工處和積金局的指控，待我康復上班時才出糧 … 他說如果他出一毫子糧給我，他都要全部認哂 … 基於這苛刻而不合理的條件，本人沒有接納”。

That the discussion was intended for settlement has been repeated in the claimant’s testimony (see pp. 19I and 22Q, transcript of the Tribunal hearing).

5.  It is also common ground that “without prejudice” discussions are inadmissible:-

(1)     Hong Kong Civil Procedure 2007, para. 24/5/41;

(2)     Chocoladefabriken Lindt & Sprungli AG and Another v. The Nestle Co. Ltd. [1978] RPC 287, 288-9;

(3)     Cheddar Valley Engineering Ltd. v. Chaddlewood Homes Ltd. [1992] 1 WLR 820, 826;

(4)     Rush & Tompkins Ltd. v. Greater London Council and Another [1988] 3 WLR 939, 942;

(5)     Meng Zhu Lin also known as Mong Chu Lam v. Xie Xiao and Others, HCPI 722/2001, para. 34 and 35.

6.  The claimant submits in this appeal, firstly, that the Tribunal did not rely on the taped conversation to conclude that there was an employment relationship between the parties; it merely relied on it (as one of the three matters) to assess the parties’ credibility.  I do not find any substance in this submission.  It was still incorrect for the taped conversation to be considered by the Tribunal, even though the consideration was limited to the assessment of the witnesses’ credibility.

7.  The claimant further submits that the conversation was not “without prejudice” because the appellant only kept on asking the claimant not to sue him during the meeting.

8.  I disagree with that submission.  First, it is factually wrong.  What the appellant sought during the meeting was in effect the claimant’s agreement to a deferred payment (of perhaps a lesser sum).  Secondly, to say that discussions will fall within the “without prejudice” doctrine only if they involve monetary offers from both parties will give the doctrine an overly-restrictive scope.

9.  The claimant also relies on s. 27(2), Labour Tribunal Ordinance (Cap. 25) which provides:-

“The rules of evidence shall not apply to proceedings in the [Tribunal], which may receive any evidence which it considers relevant”.

It is unclear if the claimant also argues that the “without prejudice” doctrine is excluded by this provision.  Insofar as he so argues, I find that this provision does not so intend.  This is because it is only one of the provisions to ensure that Tribunal proceedings are to be conducted in an informal manner: see also, for example, ss. 20(1), 23 and 27(1).  There is no basis for inferring that the legislation intends the exclusion of the public policy underlying the “without prejudice” doctrine from such proceedings.

10.  To sum up, I agree with the appellant that the Tribunal has misdirected itself in failing to consider whether the tape-recorded conversation should be excluded under the “without prejudice” doctrine (using the test propounded in Re Jinro (HK) International Ltd. [2002] 4 HKC 90, para. 13 to 18).

Disallowing the Appellant’s Cross-examination

11.  The transcript of the Tribunal hearing indicates that the Tribunal has on several occasions stopped the appellant from asking the claimant about how the claimant recorded the conversation and why he did so secretly.  The appellant submits that the Tribunal erred in doing so.

12.  I find no merit in the submission.  It is the duty of the court or a tribunal to see to it proceedings are conducted in an efficient manner.  That includes a duty to allow only relevant questions to be asked in cross-examination: Phipson on Evidence (2005) 16^th Ed., para. 12-11 and Criminal Evidence in Hong Kong (2006) Issue 26, Ch. X, para. 553.

13.  The Tribunal must have been well aware that the meeting was for discussing settlement, and that the conversation was recorded in secret (see para. 4 above and pp. 47A-I and 61E to 62N, transcript of Tribunal hearing).

14.  In these circumstances, it would serve no useful purpose for the appellant to ask questions about the matters referred to in para. 3(b) and 11 above.

Inconsistency between the Amounts of Salary Claimed

15.  The claimant’s testimony was that his salary in January and February 2004 was $20,000 per month (p. 66Q, transcript of the Tribunal hearing).

16.  It is true that in a written application to the ODC Board, the claimant’s monthly salary from February 1997 to 9 April 2004 was stated to be $16,000.

17.  However, that application was not signed by the claimant and was merely signed by the appellant.  The claimant denied having filled in, or having signed, that application.

18.  Such being case, the Tribunal cannot be faulted for not considering the apparent discrepancy.

Lack of Documentary Evidence of the Claimant’s Salary

19.  Having rejected the complaint that the Tribunal erred in failing to take into account the alleged inconsistency (para. 11 to 18 above and the ground of appeal set out in para. 3(c) above), I do not find any substance in the present complaint.

20.  Both parties failed to produce any documentary evidence to substantiate their respective case regarding how the claimant was rewarded for his work.

21.  This was one of those cases where the Tribunal has to assess the credibility of the parties’ respective witnesses in order to make a finding.  While the Tribunal will often be greatly assisted by documentary evidence in such an exercise, the presence of such evidence is not a prerequisite for such an assessment.

Conclusion

22.  To the extent set out in para. 10 above, I have concluded in the appellant’s favour in relation to the ground of appeal set out in para. 3(a) above.  I have, however, rejected all the other grounds.

23.  RHC Ord. 55 r. 7(7) provides:-

“The Court shall not be bound to allow the appeal on the ground merely of misdirection, or of the improper admission or rejection of evidence, unless in the opinion of the Court substantial wrong or miscarriage has been thereby occasioned” (emphasis supplied).

24.  For the reasons set out below, I am not satisfied that substantial wrong or miscarriage has been occasioned by the Tribunal’s misdirection.

25.  As the Tribunal has put it in the “Reasons for Decision” dated 16 March 2006:-

“關於可信性問題，申索人依靠三組文件，第一組文件證物[是] … 04年4月9日，被告協助申索人向職業性失聰補償管理局方面索取賠償 … ” (para. 6);

“第二套文件，申索人依靠強積金文件 … ” (para. 7).

(The third set of documents were the tape recording (and transcript) of the “without prejudice” conversation).

26.  The Tribunal correctly recorded that in both sets of document, the appellant has admitted he was the claimant’s employer.  It has also considered the appellant’s explanation about them in the course of the assessment.

27.  In these circumstances, there is ample basis for the Tribunal to conclude that the parties’ relationship was employment in nature, even if the tape-recorded conversation had not been admitted.

28.  The appeal is accordingly dismissed.

Costs Order

29.  The appellant fairly (and correctly) accepted that the usual rule that costs should follow the event is applicable.  There will accordingly be a costs order that the costs of the appeal be paid by the appellant to the claimant to be taxed if not agreed.