RYDIN PER NICLAS HAKAN v. WUZA YAKI LTD

HCLA 10/2026

[2026] HKCFI 2940

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 10 OF 2026

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 3259 OF 2024)

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D E C I S I O N

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A.  INTRODUCTION

1.  By an Application for Leave to Appeal on Point of Law dated 18th March 2026 (“the Application”), the Defendant seeks leave to appeal against the Judgment of the Deputy Presiding Officer Benning Wong (“the DPO”) of the Labour Tribunal (“the Tribunal”) made on 11th March 2026 (“the Judgment”), in which the DPO made an award in favour of the Claimant (“the Award”).

2.  By a summons of 23rd March 2026, the Defendant further seeks a stay of execution of the Award pending determination of the Defendant’s Application, and, if leave to appeal is granted, pending determination of the appeal (“the Stay Summons”).

B.  THE BACKGROUND

B1.  The factual background

3.  The Defendant is engaged in fish trading.

4.  Pursuant to an employment contract between the Defendant and the Claimant dated 1st July 2013 (“the Employment Contract”), the Defendant engaged the Claimant as its Vice President of Sales from 1st July 2013.

5.  The Employment Contract provided, inter alia, as follows.

“ 7.2 Medical Insurance

Niclas is invited to join the Company’s Medical Insurance scheme, details of the scheme will be provided separately.

…

8.2 Non-Competition

Niclas hereby undertakes to the Company … :-

8.2.1 not during a period of six (6) months from the date of termination of this Agreement to carry on or be engaged directly or indirectly and whether as principal, shareholder, partner, employee, agent or otherwise (except as a shareholder in a public listed company holding not more than five per cent of the issued share capital, of any class, of such public company) in any business of development, producing, promoting and performing the Company Business …

[cll. 8.2.2 to 8.2.6 contained further undertakings by the Claimant as to what he would or would not do upon the termination of the Employment Contract]

8.3 The Company may in its absolute and sole discretion waive any of the aforesaid restrictions and subsequently release Niclas from such restriction(s) on a case by case basis, but in case Company shall decide to uphold the non-compete restriction the Company must notify Niclas thereof latest within three (3) weeks from the date when the Company or Niclas served notice of termination. In case the Company shall choose to uphold the restriction in 8.2.1 above the Company must offer Niclas financial compensation, equal to hundred per cent (100%) of the annual salary Niclas is entitled to as an employee of the Company, for the inconvenience, which may be caused to Niclas because the restriction in 8.2.1 is upheld. For the avoidance of doubt, the expression “annual salary” shall be interpreted to mean the basic salary, excluding any bonuses and other fringe benefits, paid by the Company to Niclas during the fiscal year immediately proceeding [sic] the year during which the employment of Niclas with the Company became terminated either by the Company or by Niclas.”

6.  On 22nd February 2024, the Defendant terminated the Claimant’s employment by making payment in lieu of notice. The Defendant set out its proposed terms of termination in a letter dated 22nd February 2024 (“the Termination Letter”). They included the following.

“ [4][1] From your last official service day 22nd February 2024 all your other benefits will be terminated, however your medical insurance will continue to be in place until 22nd August 2024.

…

[9] Your acceptance of the separation terms and payments is in full and final settlement of all and any claims or rights of action that you may have against the Company or any of our employees or officers relating to your employment, the termination of your employment or any other matter including any contractual claims or statutory clams under the Hong Kong employment-related legislation.

…

[10] In consideration of the separation terms and payments to be made to you pursuant to points above, you agree:

to abide by the restrictions in clause 8 of your employment contract; and

not to knowingly make, publish or otherwise issue or make any detrimental or derogatory statements concerning the Company …

…

[13] Please sign, date and return the attached copy of this letter indicating your acceptance of these terms.”

7.  There is no dispute that the Claimant rejected these terms. The Defendant’s evidence was that its director Mr Mansfield met the Claimant on 22nd February 2024 to explain the terms of the Termination Letter and how the amounts therein had been calculated; after about ten minutes, the Claimant stood up and said “I understand. I don’t agree” and then left without signing the Termination Letter.

8.  The Claimant was paid the amounts in the Termination Letter, being amounts to which he was entitled by law under the Employment Ordinance (Cap.57), comprising salary for the days worked in February 2024, payment in lieu of notice, and long service pay.

9.  From March 2024 to August 2024, the Claimant and his family members continued to use the medical insurance provided by the Defendant.

B2.  The proceedings in the Tribunal

10.  On 3rd September 2024, the Claimant commenced a claim in the Labour Tribunal for $2,598,384, being a year’s salary, under clause 8.3 of the Employment Contract. The Claimant’s case was that the Termination Letter expressly required him to abide by the restrictions in cl.8 of the Employment Contract. This amounted to notification by the Defendant of its decision to uphold the Non-Competition clause (cl.8.2.1), and pursuant to cl.8.3, the Claimant was entitled to financial compensation equal to 100% of his annual salary.

11.  The Defendant advanced numerous defences. It also advanced a counterclaim to recover payments made to the Claimant, alleging that he was in repudiatory breach of the Employment Contract.

12.  On 11th March 2026, the DPO handed down the Judgment, awarding the Claimant $2,598,384 under cl.8.3 of the Employment Contract and costs, together with interest on both. The counterclaim was dismissed.

C.  THE SCOPE OF AN APPEAL FROM THE LABOUR TRIBUNAL

13.  Under s.32 of the Labour Tribunal Ordinance (Cap.25), a party may apply for leave to appeal against the Tribunal’s award, order or determination only on the grounds that it is erroneous in point of law, or outside the jurisdiction of the Tribunal.

14.  An appeal on a question of law lies only in limited circumstances. Where the issue sought to be raised relates to a finding of fact, the appellate court may intervene only if it is based on a finding of fact or inference from the facts which is perverse or irrational; or there was no evidence to support it; or it was made by reference to irrelevant factors or without regard to relevant factors. See Kwong Mile Services Ltd v Commissioner of Inland Revenue (2004) 7 HKCFAR 275 (Bokhary PJ at [31] to [34]).

D.  THE GROUNDS OF APPEAL

15.  I do not need to go into all of the issues debated before the DPO, as counsel for the Defendant, Ms Annie Leung, helpfully indicated that the Defendant’s application for leave to appeal is directed at paragraphs 44 to 52 of the Judgment.

16.  The Application stated ten grounds of appeal in a lengthy manner. Ms Leung grouped and restated them, in essence, as follows.

16.1  As regards the contractual construction of the Termination Letter:

16.1.1  whether settlement of claims have to arise from actual disputes between parties, or whether settlements can cover potential or unknown disputes;

16.1.2  whether the claims to be settled between the parties in the present case would cover any claim made under cl.8.3 of the Employment Contract;

16.1.3  whether the Termination Letter was a mere notification of termination or contained an offer, the acceptance of which would constitute a binding contract;

16.1.4  whether the offer in the Termination Letter could be accepted only by signing and returning the Termination Letter, or whether it could be accepted by the Claimant’s conduct in using the medical insurance provided by the Defendant.

16.2  The plainly and obviously erroneous factual finding that despite the Claimant’s use of the medical insurance provided by the Defendant, the Claimant had rejected the offer in the Termination Letter, or that the offer did not remain open for acceptance.

16.3  The DPO’s error that no adequate consideration was provided in the offer in the Termination Letter.

16.4  The DPO’s error that provision of the medical insurance would not constitute consideration as the Defendant did not have to pay any extra premium to provide it.

16.5  The plainly and obviously erroneous factual finding that the provision of the medical insurance was by reason of generosity.

16.6  The DPO erred in being minded to accept that the medical insurance was to continue for six months, being the period of the restrictive covenant under cl.8.2.1 of the Employment Contract. This was said to be a ground raised “out of abundant caution” as the DPO did not actually make any finding to this effect.

16.7  The DPO erred in finding that there was no waiver of rights. The Claimant had settled or waived his rights under cl.8.3 of the Employment Contract.

17.  It can readily be seen that the critical matter for the Defendant to establish, were leave to be given, is that the Claimant accepted the offer in the Termination Letter by conduct through his (and his family’s) use of the medical insurance provided by the Defendant. The grounds of appeal all depend on this point, or else are of no consequence in the absence of a favourable finding on this point. Ms Leung agreed that this was the case.

18.  The DPO found that even if the Termination Letter constituted an offer to settle any claims the Claimant had against the Defendant, there was no valid acceptance, given that the Defendant’s own evidence was that after the Termination Letter had been explained to him, the Claimant had said “I understand. I don’t agree” and then left without signing the Termination Letter (Judgment at [49(1)]). This finding is unassailable, and Ms Leung did not seek to challenge it. Rather, she submitted that:

18.1  whether a contract was concluded should be assessed objectively;

18.2  as a matter of law, an offer can be made by conduct, and the offer in the Termination Letter was “revived”.[2]  The revival was by reason of the fact that the medical insurance remained available for the Claimant’s use; and

18.3  the Claimant accepted the offer by using the medical insurance provided by the Defendant.

19.  The burden of establishing that a contract has been created by conduct lies on the person asserting its existence. The court will not imply such a contract lightly. The conduct relied on must be unequivocally referable to the contract sought to be inferred. Whilst the approach is an objective one, so that evidence of a party’s actual intentions will generally be excluded as irrelevant, this is subject to the qualification that where a party knows that the other party in fact has no intention to contract with him, no contract will be implied. The party who does not intend to be bound will not be bound if his state of mind was actually known to the other party. See Shanghai Tongji Science & Technology Industrial Co Ltd v Casil Clearing Ltd (2004) 7 HKCFAR 79 at [37] to [46].

20.  The DPO was aware that the question of whether a contract has been concluded by conduct is to be considered objectively (see for example Judgment at [49(9)]). He was also aware that the conduct needs to be unequivocally referable to a contract (see Judgment at [49(5)] and [49(6)]).

21.  An objective approach does not mean a blinkered one. The fact that the medical insurance was available for use by the Claimant cannot be considered in isolation from the circumstances.

22.  On the issue of whether the Defendant’s conduct in continuing to make available medical insurance to the Claimant amounted to an offer to settle with the Claimant any claim under cl.8.3 of the Employment Contract, it is relevant to have regard to the following findings of the DPO (see Judgment at [24], [49(2)], [49(4)], [49(5)]), which are unchallenged.

22.1  The Termination Letter expressly asked the Claimant to accept its terms by signing, dating and returning the attached copy of the letter. The Claimant never did this.

22.2  Nothing was ever communicated to the Claimant, whether expressly or impliedly, that the terms of the Termination Letter were either (1) intended to be a continuing offer despite rejection by the Claimant, or (2) revived after such rejection, in either case such that the terms were open to the Claimant to accept by conduct.

22.3  The Defendant’s own intention could not have been for the Claimant to accept the terms of the Termination Letter by conduct. The Defendant never checked whether the Claimant used the medical insurance after the termination of his employment. The Claimant instituted proceedings in September 2024. The trial in the Labour Tribunal took place on 15th, 16th and 17th October 2025. The Defendant never suggested, in defending the claim, that the Claimant’s claim had been settled by an offer and acceptance by conduct. It was only at some point after all the evidence had concluded that the Defendant sought to raise a new argument that the Claimant’s claim had been settled. As a result, the DPO directed that there be a further hearing on 10th February 2026.

23.  Ms Leung submitted that the continued provision of the medical insurance could only be referable to the offer in the Termination Letter, as there was no other “source” for it.[3]  However, the continued provision of the medical insurance was not a positive act of the Defendant, but due to the Defendant not taking action to discontinue the insurance. It could not be said that objectively, this was unequivocally referable to a continuation or revival of the rejected Termination Letter offer when this was not communicated to the Claimant. It was equally referable to simple inaction or omission on the part of the Defendant – and indeed this would be consistent with the Defendant’s failure to rely on its provision of medical insurance as a defence throughout the entirety of the proceedings until after the evidence-taking at the Tribunal was completed.

24.  Then there is also the question of acceptance.

24.1  The DPO found (Judgment at [49(1)]) that the conduct of the Claimant at the meeting with Mr Mansfield on 22nd February 2024 meant that it was “obvious that the Claimant had rejected the Termination Letter once and for all”.

24.2  At the further hearing on 10th February 2026, the Claimant adopted his additional witness statement of 24th December 2025. In this statement, he asserted that his use of the medical insurance was not unequivocal acceptance of a settlement. He explained that his family used the medical insurance because it was still active and available; his wife contacted the insurer to ask about options to continue coverage after provision by the Defendant ended, and during the discussions, the insurance company recommended use of the insurance coverage for eye examinations. This evidence was not challenged.

25.  Objectively, therefore, it could not be said that the continued provision of medical insurance was unequivocally referable to a continuation or revival of the offer in the Termination Letter, when the Defendant had not taken any positive action to indicate that its offer was nevertheless continuing, or revived, despite the Claimant having unequivocally rejected it. Nor could it be said that the use of the medical insurance was unequivocally referable to an acceptance of the terms of the Termination Letter, when the Claimant had expressed his rejection of it in no uncertain terms, and when the continued usage could be explained by reference to the fact that the insurance cover simply remained available to be used and the insurance company had recommended its use. On the contrary, if one stands back to look at the facts objectively, it makes no sense to interpret them as being a case of the Claimant having emphatically rejected the terms of the Termination Letter and then changing his mind to accepting them without telling the Defendant.

26.  In the light of the above, I cannot see how it can be said that the DPO took an erroneous approach in law; or that his finding that no agreement to settle the Claimant’s claims was reached, can be said to be perverse or irrational, made without evidential support, or made by reference to irrelevant factors or without regard to relevant factors.

27.  Accordingly, the Defendant identifies no arguable error of law for which leave to appeal should be granted.

E.  DISPOSITION

28.  I dismiss the Application and the Stay Summons. For the avoidance of doubt, the interim stay which I granted at the hearing of the Application is discharged.

29.  I further order, on a nisi basis, that the costs of and occasioned by the Stay Summons (but not the ex parte Notice of Application) be paid by the Defendant to the Claimant, to be summarily assessed. The Claimant is to lodge and serve a statement of costs, in bullet point form limited to 1 page, within 14 days, setting out any items for which costs are claimed, with a brief explanation. The Defendant is to lodge and serve its list of objections, in bullet point form limited to 1 page, within 7 days thereafter. The Claimant has leave to lodge and serve a reply, if any, within 7 days thereafter. I will rule on the matter on the papers without further notice to the parties.