CUI HONG v. WAH NGAI PRINTING LTD

DCCJ 966/ 2005 & DCCJ 1320/ 2005 Consolidated

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 966 OF 2005 &

CIVIL ACTION NO. 1320 OF 2005 Consolidated

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REASONS FOR DECISION

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Cui Hong's claim

1. The 2 cases before me have arisen out of the same core events.  One party’s claim and counterclaim have become the opposite party’s counterclaim and claim.  CUI HONG (“plaintiff”) was a marketing executive of WAH NGAI PRINTING LIMITED (“defendant”).  There was an oral agreement between the plaintiff and the defendant that the plaintiff was entitled to a commission on top of her basic salary.  In June 2004, the plaintiff got a purchase contract from a client.  She asked the defendant to pay her commission for it.  The defendant wrongfully refused to pay her commission and subsequently terminated her employment.  The defendant claims commission and compensation for the termination.   

Wah Ngai Printing Limited's defence

2. There was no agreement for any marketing executives or employees, including the plaintiff, to have a commission.  The plaintiff terminated the defendant’s employment due to her poor performance at work.   

A note

3. The defendant originally alleged that the defendant had caused loss and damage relating to the defendant’s website and the plaintiff’s email account therein.  The defendant’s entire claim is withdrawn in the course of the present trial.

4. There are 3 bundles prepared for trial, A, B, and C respectively.  “A” contains the pleadings and court documents.  “B” contains witness statements.  “C” contains documentary exhibits.  “[A10]” means, as for example, page 10 of Bundle A.  All documents are agreed except for a few.  If reference is made to those few, the evidence itself will explain the disagreement.

The issues to be determined

5. This Court has to determine:

(1)  Whether the defendant had agreed to give a commission to the plaintiff;

(2)  Whether the defendant was entitled to terminate the plaintiff’s employment summarily;

(3)  If not rightful to so terminate it, the compensation to the plaintiff.  

The plaintiff's evidence

6. The plaintiff gives evidence.  She also calls 2 witnesses: Marcel Kass (“Mr. Kass”), and Man Siu-ping (“Ms. Man”). 

7. Mr. Kass and Ms. Man came to know the plaintiff whilst she was working for the defendant.  Mr. Kass remains her business and private friend.  He finds her responsible, hardworking and competent.  He does not highly regard Tam Chun-kit (“Mr. Tam”), who was the boss of the defendant.  Previously, Ms. Man’s employer had a business transactioni with Ms. Ng Suk Fan, who was Mr. Tam’s wife and represented the defendant.  Ms. Ng refused to pay the full contract price.  She did not know the final result.  It reflected that Ms. Leung was not being reasonable. 

8. In early March 2003, the plaintiff joined the defendant as a marketing executive.  The defendant was a printing design and manufacturing company.  Competition was very keen in the trade.  She was to look for new customers from the internet and exhibitions.  The defendant was to provide all the necessary data.  Ms. Ng agreed to give her a basic monthly salary of $9,000.00 and a year-end double pay but no commission.  There was no written employment contract.         

9. In September 2003, she was promoted to be Assistant Sales Manager with no change in emoluments.  The defendant gave her a namecard as a result [C106].

10. She had several rounds of preliminary talks with Mr. Tam on commission.  They took place in April – May 2003, June 2003, October 2003, and March 2004 respectively.  On 18 June 2004, Mr. Tam orally agreed to pay her a commission.  If she got a contract price beyond an additional 30% over the defendant’s contract price, she would be entitled to the entire surplus without limit.  She writes out these allegations in a schedule as she gives evidence in Court [B31 – 32]. 

11. On 30 April 2004, she gave Ms. Ng a document named “Overload Job Statement” [C109].  She complained about the workload and how her health and family life had been ill affected.  She explains in Court that if her salary were to be increased, it would be most conducive to a better way of life.  Otherwise she would have to resign.   

12. In May 2004, the defendant increased her salary to $11,000.  

13. In June 2004, she got a potential customer for a large purchase contract.  Mr. Tam was already satisfied with the original contract price of US$167,543.00 but the customer wanted to be cheaper.  With a proper evaluation of the situation, she succeeded in getting the customer to end up paying US$202,512.00.  The defendant got an additional US$34,969.00 (namely US$202,512.00 – US$167,543.00) over its original contract price.  The customer paid up in August 2004. 

14. On 26 August 2004, the plaintiff asked for the commission of US$34,969.00.  Mr. Tam refused.  Ms. Ng terminated her employment with 1 month’s notice.  Her last day of work was to be 25 September 2004. 

15. On 1 September 2004, Ms. Ng terminated her employment instantly.  Ms. Ng gave her 2 cheques [C71].  The first one, dated 5 September 2004, for $10,450.00 purported to be her August 2004 salary [namely $11,000 – $550 MPF].  The second, dated 26 September 2004, for $9,056.60, purported to be 7 days’ annual leave and the remainder of the 1 month’s notice period.

16. Both cheques were dishonoured upon presentment.  During meetings at the Labour Department, the defendant paid up part of the sums.  The defendant now claims [A6 – 7]:

(1)$8,800.00 as salary in lieu of sufficient notice for 1 – 24 September 2004;

(2)$1,833.33 as 5 days’ annual leave pay;

(3)$7,373.38 as pro rata year-end double pay;

(4)US$34,969.00 as commission.

The defendant’s evidence

17. The plaintiff’s side has 3 witnesses: Tam Hoi-yin, Mr. Tam, and Ms. Ng. 

18. The defendant has been in business for 40 years since the days of Mr. Tam’s father.  Mr. Tam mostly dealt with customers and external matters whereas Ms. Ng mostly handled accounting and internal matters.  There had been no more commission scheme since 5 – 6 years ago.    Even back at that time, only field salespersons, who spent all working time outside, were given a commission at 2% of the contract price.  The defendant did not have a convention of written employment contract.   

19. Tam Hoi-yin had been in the same post as the plaintiff.  She joined in 2002 and left in 2006 for own academic pursuit.  Her emolument package was $13,000 with year-end double pay but no commission. 

20. In May 2004, the defendant raised the plaintiff’s salary by $2,000 because she had been working there for more than a year.  She did not perform very well.  She was never promoted to be Assistant Sales Manager.  The defendant gave her a namecard with this title [C106] in January 2004 just for the sake of showing customers at the exhibition.          

21. The defendant’s website and the plaintiff’s email account had been set up with the aid and liaison of the plaintiff with the internet engineer.  Upon the defendant’s instructions, Tam Hoi-yin had to enter the plaintiff’s email account to assist her at least 2 occasions.  First, in March 2003, when the plaintiff was newly recruited, she had to do so to help the plaintiff.  Second, in mid-August 2003, when the plaintiff was terminated, she had to do so to take over.  On 1 September 2003, after the instant termination of the plaintiff, Tam Hoi-yin found the plaintiff’s email account inaccessible.  She reported this to Ms. Ng.  Ms. Ng tried to contact the plaintiff but in vain.  Ms. Ng stopped payment of the 2 cheques so that the plaintiff would emerge to resolve the email account problem.       

22. The defendant regarded the plaintiff as a hardworking and committed employee.  However, she often talked unintelligibly and failed to follow Mr. Tam’s instructions.  Ms. Ng exhorted her from time to time.  On 18 August 2004, the defendant terminated her employment because of the same problems.  A month’s notice was given.  On 1 September, the problems had become intolerable.  The defendant had to terminate her employment instantly.    

This Court's findings

23. I have considered all evidence and parties’ submissions, all of which are in writing. 

On the credibility of the plaintiff and her witnesses

24. Defence counsel refers to her oral evidence that on 18 June 2004 there was a firm oral agreement for commission.  However, in her schedule [B31 – 32], she writes that there was this commission “或由雙方再詳談” (“or to be talked in detail by both parties”).  Counsel submits [in para. 9 – 11 of the Closing Submissions] that the plaintiff’s allegations on the commission are inconsistent and illogical.  I agree with this submission. 

25. Counsel refers [in para. 15 of the Closing Submissions] to an email she claims to have sent to Mr. Tam.  She had included “Cubic Boxes” as part of the goods under the purchase contract.  However, in the Table of figures, no Cubic Boxes were included.  She explains in Court that if she had included the Cubic Boxes in the Table of Figures, her commission would have been too high.  Counsel submits that both the email and the Table of Figures are fabricated.  I agree with this submission.     

26. I find her alleged commission scheme bizarre.  If the plaintiff were so effective to get an additional 30% over the contract price, the defendant might well be happy to give the plaintiff the surplus.  However, her alleged scheme had no limit of commission.  In a keenly competitive trade, it was a selfish scheme that would only benefit the plaintiff.  The alleged scheme would require the defendant to finance a limitless rip-off of a customer at the expense of skinning it once and for all, as well as loss of reputation.  It would have no medium- or long-term benefit to the defendant.  I reject her allegation of this commission scheme.  

27. I see no reason to query Mr. Kass’s and Ms. Man’s subjective views of the plaintiff’s, Mr. Tam’s, or Ms. Ng’s character, as the case may be.  I shall bear in mine their evidence as I come to consider the credibility of the plaintiff, Mr. Tam and Ms. Ng.

28. I do not find the plaintiff credible.  I reject her evidence on all matters in issue. 

On the credibility of the defendant’s witnesses

29. I find Tam Hoi-yin, Mr. Tam and Ms. Ng credible and reliable witnesses.  I accept their evidence on all matters in issue. 

Whether the defendant had agreed to give a commission to the plaintiff

30. I accept Mr. Tam’s and Ms. Ng’s evidence in particular that they had never agreed to give a commission to the plaintiff.  The plaintiff was not entitled to any commission.   

Whether the defendant was entitled to terminate the plaintiff’s employment summarily

31. Mr. Tam and Ms. Ng did not find the plaintiff’s performance satisfactory.  They are, however, unable to give enough particulars.  They have to, but are unable to, demonstrate the precise circumstances.  Thus I do not find that they were entitled to terminate the plaintiff’s employment summarily on 1 September 2004. 

If not rightful to so terminate it, the compensation to the plaintiff  

32. I accept Ms. Ng’s evidence that on 18 August 2004 the plaintiff’s employment was terminated with 1 month’s notice.  Her last day would be 17 September 2004.  She was not entitled to any year-end double pay.  I find that the plaintiff was entitled to compensation only as follows:

(1)$6,233.33 [namely $11,000 x 17/30] as salary in lieu of sufficient notice for 1 – 17 September 2004;

(2)$2,566.67 [namely $11,000 x 7/30] as 7 days’ annual leave pay (because the defendant agrees in Court that it should be “7” days instead of only “5” days as pleaded by the plaintiff);

The total was $8,800.00.

The Conclusion 

33. I order the defendant to pay the plaintiff the total sum of $8,800.00 with interest at judgment rate from the date the Writ of Summons was filed.  On 14 March 2006, namely a day before trial, the defendant had already paid $8,632.98 into court.  There is no apparent reason why costs should not follow the event.  The plaintiff succeeds in part and fails in part of her Claim.  I shall apportion the costs.  The plaintiff shall have half of the costs of this consolidated case, with a certificate for counsel.  I make this cost order nisi.  It shall become absolute after 14 days from today.   

Dated this 31 March 2006