CHEUNG WAI LUN v. HUNG CHUN HO

HCPI 273/2022

[2024] HKCFI 3733

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 273 OF 2022

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D E C I S I O N

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1.  Before the master, the plaintiff succeeded in resisting 2 out of 3 questions asked by way of interrogatories served by the defendant without order. The defendant now appeals.

Background

2.  It was a traffic accident involving the parties amongst a group of 10 motorcyclists at the time on 15 December 2019. In 2022, the plaintiff commenced the present action against the defendant for damages for his injuries sustained in the accident. Liability and quantum are in dispute.

3.  By pleading, the plaintiff claims that he worked as a project manager for an interior decoration company earning HK$55,000 monthly salary at the time of the accident. As a result of the accident and injury, he claims to have been incapacitated from resuming such pre-accident job and hence suffering loss of earnings.

4.  By his witness statement, the plaintiff explains that he had entered into 2 employment agreements with his employer. By the agreements, he took up the positions of account manager for a monthly salary of HK$32,000 and project manager for a monthly salary of HK$23,000. He entered into such arrangement at the request of his employer, which in reality did not differentiate between the 2 capacities he occupied in terms of duties or working hours. The medical experts also recorded in their joint report dated 14 April 2023 the plaintiff’s information that he worked for 2 jobs for his employer.

5.  On 23 November 2023, the defendant served interrogatories without order on the plaintiff. 3 major questions were asked. As the master’s order in respect of the third one of these questions does not form the subject of the present appeal, only the disputed first and second questions are set out below (“the 2 Questions”), namely that in respect of his witness statement mentioned above:

(1)  state:

(a)  when the plaintiff started each of the 2 jobs;

(b)  when and why the employer requested him to sign 2 employment contracts;

(c)  what the working days and hours of each of the 2 jobs were; and

(d)  whether the employer contributed to the MPF for each of the 2 jobs and, if yes, identify the documents in support;

(2)  if the employer did not divide/separate the jobs duties between the 2 jobs, why it needed to employ the plaintiff in the 2 capacities.

6.  The parties then ensued in correspondence arguing about the justification for the interrogatories.

7.  The plaintiff has since disclosed and provided to the defendant further documents pertinent to the 2 Questions. The plaintiff has also offered to provide answer by the employer or alternatively by the plaintiff but only if the questions were modified. The disagreement was not resolved.

8.  Eventually, the plaintiff filed his summons on 7 December 2023 for the dismissal and withdrawal of the interrogatories (“7/12/2023 Summons”).

9.  After hearing, the master handed down written decision on 2 May 2024 and directed that the interrogatories in respect of the 2 Questions be disallowed and withdrawn; and the third question be answered by way of affidavit. The master made a nisi order that the costs of and occasioned by the 7/12/2023 Summons including the hearing be in the cause.

10.  By summons filed on 3 May 2024, the plaintiff seeks variation of the nisi costs order so that the defendant should pay his costs of the application. By summons filed on 14 May 2024, the defendant too seeks variation of the nisi costs order with a view to no order as to costs of the plaintiff’s application. By then, the defendant has also lodged his appeal against the master’s decision. At the present hearing, the parties confirmed that the master has subsequent to the taking out of the present appeal dismissed both parties’ summonses for variation of the nisi costs order.

11.  By his notice of appeal filed on 13 May 2024, the defendant seeks to set aside the master’s decision in respect of the 2 Questions asked in the interrogatories. The defendant also seeks to set aside the nisi costs order made by the master and also seeks his costs of and occasioned by the plaintiff’s summons for variation of the nisi costs order, which could only be understood to be consequential upon the event of this appeal being in his favour.

The principles

12.  This appeal pursuant to O58, r1 of the Rules of the High Court, Cap 4A (“RHC”) is effectively re-hearing of the 7/12/2023 Summons taken out by the plaintiff.

13.  O26, r1(1) of the RHC provides that interrogatories must relate to the matter in question between the parties in the cause or matter which are necessary for disposing fairly of the cause or matter or for saving costs. In exercising its discretion in the determination, the court is expected to take into account all the circumstances of the case: see Lau Suk Han Loretta v Li Fung Ming Krizia & Anor, HCPI 859/2016 (15 January 2024) at §15.

14.  There is no argument regarding the principle.

Discussion

15.  It is important to take stock of the facts which the parties ought to know by the time of the 7/12/2023 Summons. They are as follows.

16.  The plaintiff explained and disclosed documents that he entered into a written employment agreement dated 1 March 2018 whereby he was employed as an account manager for a term of 2 years commencing on that day at the monthly salary of HK$32,000 (“the 1^st Agreement”). It was followed by another written employment agreement dated 1 June 2018 whereby the plaintiff was employed as a project manager at the monthly salary of HK$23,000 with effect from that day (“the 2^nd Agreement”)[1]. Neither employment agreement casts light on whether the consecutive agreements amounted to a cumulative or superseding arrangement. But what did the other post-contractual documents manage to tell the defendant?

17.  In its employer’s return for the financial year 2019/2020 (from April to December 2019 which was the end of employment) dated 30 April 2020, the employer reported that the plaintiff received during that 9-month period salaries in the total sum of HK$207,000. That suggested an average monthly sum of HK$23,000. By an employment certificate dated 5 November 2020, the employer confirmed that the plaintiff’s monthly salary since June 2018 until December 2019 was HK$23,000.

18.  The inconsistent description of the plaintiff’s position by the employer in the above 2 documents aside, the employer apparently suggested that it only paid salary in the sum of HK$23,000 to the plaintiff pursuant to the 2^nd Agreement every month.

19.  The MPF statements of the plaintiff project a similar picture. The contribution period began in June 2018, which was the commencement of the 2^nd Agreement, with the monthly contribution by the employer and the plaintiff of HK$1,150 each, which was 5% of HK$23,000.

20.  The bank statements disclosed by the plaintiff contain similar records. Since early July 2018, ie one month after the commencement of his employment pursuant to the 2^nd Agreement, the plaintiff has had a monthly deposit in the sum of HK$23,000. In line with the MPF scheme, the plaintiff started his employee’s first month’s contribution after the first 2 months of his employment pursuant to the 2^nd Agreement, and hence a monthly sum of HK$21,850 (ie HK$23,000 net of HK$1,150 settled by the employer on his behalf) received from the employer since August 2018. By then, the employer had also made its MPF contribution for the first 2 months of the plaintiff’s salaries in the total sum of HK$2,300 (ie HK$1,150 x 2).

21.  Therefore, the above documents suggest that the plaintiff received salaries from the employer at the monthly rate of HK$23,000.

22.  However, the apparent state of affairs mentioned above is equivocal.

23.  First, the bank statements of the plaintiff also recorded that since April 2018, ie one month after the commencement of his employment pursuant to the 1^st Agreement, the plaintiff has begun to receive a monthly deposit in the sum of HK$32,000 during the first week of every month. Not only did such payment continue every month, but it was also made in most months on the same day when the plaintiff received his net salary amount of HK$21,850 mentioned above.

24.  In other words, the plaintiff started to receive the sum of HK$32,000 in April 2018 and, since July 2018 the additional sum of HK$21,850 every month. Only that the 2 sums were paid by separate cheques, and the sum of HK$32,000 was never found to have been taken into account for MPF purpose by either party to the employment.

25.  Second, in his tax return for the year 2018/2019, the plaintiff reported his income from his employer in the total sum of HK$614,000. That suggested an average monthly sum of HK$51,167. For the year 2019/2020 (from April to December 2019 when he met the accident), he reported income from his employer in the total sum of HK$495,000. That suggested an average monthly sum of HK$55,000.

26.  In other words, notwithstanding the state of affairs presented by the employer and the apparent lack of account for MPF in respect of the monthly sum of HK$32,000, the plaintiff in fact did report to the tax authority his monthly salary being the summation of HK$32,000 and HK$23,000. That contradicts what the employer reported in its employer’s return or the employer’s certificate mentioned above.

27.  In the circumstances, how the tax authority proceeded in view of the inconsistent returns of the employer and the plaintiff in respect of the latter’s income in the relevant assessment years becomes relevant and important to ascertaining the actual state of affairs. The tax assessments/demands received by the plaintiff are expected to contain the computation of his tax liability, and hence his yearly income adopted by the authority.

28.  By letter dated 28 September 2023, those acting for the plaintiff provided, amongst other documents, the salaries/personal tax assessments including those for financial years 2018/2019 and 2019/2020 to the defendant. Somehow the letter was exhibited as evidence whereas the enclosed tax assessments/demands were not. I therefore sought and obtained the parties’ consent to produce the missing documents for the purpose of this appeal. Pending that, decision on the present appeal was reserved.

29.  The parties provided this court with the missing documents mentioned above by their joint letter dated 4 October 2024. Now the tax assessments/demands show that the plaintiff’s tax liability was indeed assessed in accordance with the salaries that he reported, ie HK$55,000, as opposed to that reported by his employer. That on its face suffice in clarifying the basis of the plaintiff’s claim that his pre-accident salary was indeed the total sum of HK$55,000 instead of HK$23,000.

30.  It follows from the above that the factual basis of the claim presented by the plaintiff is that he was employed in dual capacities and received salaries pursuant to the 2 employment agreements. They were cumulative, not superseding. Relative to its reasonableness or justifiability, such dual employment agreement arrangement is more relevant as a matter of factual contention for the purpose of the claim in this action. Whether or not the parties to the employment might have withheld part of the plaintiff’s salary for the purpose of the MPF liabilities under the law, if at all, is extraneous.

31.  At the hearing, counsel for the defendant emphasized the relevance of ascertaining the respective job duties and demand as well as the working hours of the two positions of the plaintiff. The 2 Questions were said to be necessary to enable the defendant to know his position in defence.

32.  I do not see how the defendant is handicapped from knowing his position in defence. As mentioned, the plaintiff was not silent in those respects. In his witness statement (§§4-7), the plaintiff did say that his employer made no real differentiation in terms of job duties and working hours between the two capacities in which he was employed. He further spelt out the various duties of his daily job on such basis. Of course, such contention may by all means be tested at trial. However, it is not unclear or embarrassing so that the defendant is unsure of the case to answer or his position in defence.

33.  Where the contention in respect of the dual employment agreement arrangement (and income) are explicable by the documents disclosed to the defendants, and the contention in respect of the job duties and working hours of the two positions on a daily basis is explained by way of witness statement, the decision or persistence to ask the 2 Questions in the interrogatories does not qualify in terms of necessity for the fair disposal of the dispute or saving costs. In the circumstances, this court is not surprised why the 2 Questions were viewed by the master as seemingly geared towards credibility. There is no dispute that interrogatories without order are not justifiable for the purpose of credibility.

34.  Assuming for the purpose of argument that the plaintiff had been assessed to pay tax in accordance with the income reported by his employer, ie HK$23,000 only, there would then have existed basis for the defendant to enquire about the nature of the monthly deposit of HK$32,000 received by the plaintiff since July 2018. Relevant interrogatories and/or request for specific discovery of the documents relating to those deposits may be warranted. Nevertheless, such request or interrogatories would not have been crafted in terms as asked in the interrogatories now served.

35.  I should comment on one point by the way though. Questions (1)(b) and (2) of the 2 Questions entail answer in respect of why the employer of the plaintiff came up with the dual employment agreement arrangement. If ever such interrogatories are found to be legitimately served, it would not have sufficed for the plaintiff to respond that he was not in a position to answer them as if he were expected to speculate on what operated on the mind of the employer. Whether or not the dual employment agreement arrangement was initiated by his employer, it was made with the personal involvement and agreement of the plaintiff as a party to it. As mentioned, the plaintiff himself reported his total salary from both employment positions, but somehow both his employer and he did not report the larger portion of the two for MPF purpose. That the plaintiff claims ignorance in this respect does sound questionable. That said, I would not pre-judge in this respect, and need not do so for the present purpose.

36.  Importantly, what was being asked of the plaintiff could only be his understanding of why and how such dual employment agreement arrangement came about. Irrespective of what understanding he possesses, the plaintiff must be in a position to say what it was. If for reasons he somehow never possesses any understanding whatsoever, he would still be in a position to say that he never know or has never been told. The defendant will then have to take such answer from there.

37.  The correspondence between the parties subsequent to the taking out of the 7/12/2023 Summons reflects that they sort of shared the above understanding. However, the plaintiff somehow insisted that he would either request the employer to answer the interrogatories (subject to modification) or refuse to answer the questions as asked on the basis that any answer to the effect that he had no idea would be meaningless. In my view, the argument insisted was simply unnecessary.

Conclusion and disposition

38.  In conclusion, this court comes to the same conclusion as that of the master in respect of the 2 Questions.

39.  The appeal (§§1-2 of the notice of appeal) is dismissed.

40.  As mentioned, the relief sought by the defendant concerning his costs of and occasioned by the 7/12/2023 Summons and the plaintiff’s subsequent summons to vary the master’s nisi costs order (§3 of the notice of appeal) can only be understood to be consequential upon the event of this appeal being in the defendant’s favour. He has no real basis for setting aside the master’s costs order in view of the outcome of this appeal. Nor is there is costs-only appeal by the plaintiff if the master’s decision is affirmed. In the circumstances, I would not disturb the master’s costs order.

41.  I make a nisi order that the defendant should pay the plaintiff his costs of and occasioned by this appeal, with certificate for counsel. In the absence of application in 14 days to vary, the costs order will become absolute without further order. Upon that the plaintiff do lodge and serve his statement of costs within 7 days, and the defendant may lodge and serve his written comment on the statement within 7 days thereafter. Costs will then be summarily assessed on paper only.