TAN SHAUN ZHI MING v. EUROMONEY INSTITUTIONAL INVESTOR (JERSEY) LTD

CACV 351/2018

[2019] HKCA 523

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 351 OF 2018

(ON APPEAL FROM DCEO 4 OF 2017)

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REASONS FOR JUDGMENT

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Hon Lam VP:

1.  I agree with the Reasons given by Yuen JA and have nothing to add.

Hon Yuen JA:

2.  This is an appeal by Mr Shaun Tan Zhi Ming (“the Claimant”) from a decision of Judge Ko (“the judge”) given on 14 February 2018 (“the Decision”) in Equal Opportunities Action No.4 of 2017 striking out the Notice of Claim against the Claimant’s former employer (“the Employer”) under the Sex Discrimination Ordinance Cap. 480 (“SDO”) and dismissing his action on the ground that the claim was frivolous.  The judge ordered that each party bear his own costs.

3.1.   The Claimant’s application for leave to appeal was refused by the judge on 25 April 2018. 

3.2.   After considering the application on the papers only, this court¹ gave leave to appeal on 23 July 2018 on the basis that there is a reasonable prospect of success in the argument that in determining whether the claim was plainly and obviously unarguable, the assessment of whether discrimination took place on the facts of the present case should not have focused solely on the termination of employment but should also have taken into consideration the issue whether the prior treatment of the Claimant (including demanding him to apologize) was discriminatory.

3.3.   At the conclusion of the hearing before us, we allowed the appeal and indicated that reasons would be handed down.  My reasons appear below.  

Background  

4.  The matter arose against the following background².  The Claimant was employed by the Employer under an Employment Agreement dated 16 November 2016 (“the Emp Agrmt”).  His employment commenced in January 2017 and he completed his 3-month probation period in April 2017.

5.1.   On 2 June 2017, the Claimant joined a group of his colleagues (including their supervisor Ralph Cunningham [“RC”]) for a farewell lunch for a colleague at a popular restaurant in Causeway Bay.  The Claimant was late and the others were already seated.  There was a place available at the table but he had to get a chair for himself.  The place was between a male colleague called Andrew and a female colleague Joey Law (“JL”).  Andrew moved to make space, but there was still not enough space for the Claimant’s chair.  The Claimant then made contact with JL’s waist³ with his hand, (he says) to indicate to her that she should also move to make space for his chair.  Nothing was said about this gesture at the time, and after lunch, the group returned to work. 

5.2.   At about 3:30 pm the same day, JL emailed the Claimant alleging that he had “deliberately pressed on [her] waist with [his] hand when [he] squeezed into the table”.  She alleged she found it disturbing and unacceptable, and believed she had been sexually harassed by him.  She threatened to report the matter to the Human Resources department (“HR”) and the police if he touched her again for whatever reason, and demanded an apology.

5.3.   The Claimant replied to JL later the same day saying he had no interest in her, that she could report it if she wished but there was no reason for anyone to take her seriously, and that she might need therapy.

6.  Subsequently Catherine Wong (“CW”) of HR contacted the Claimant and on 7 June 2017 they had a meeting⁴.  CW informed the Claimant that JL had lodged a sexual harassment complaint against him and that JL wanted an apology.  CW sought information from the Claimant about the incident and about previous interactions between him and JL.  When CW asked the Claimant for his response to JL’s complaint, he told her that he would not apologize as he had not done anything wrong and JL’s feeling was not “backed by something reasonable”.

7.1.   About a week later, on 15 June 2017 the supervisor RC had a meeting with the Claimant⁵.  RC conveyed JL’s demands to the Claimant, which were that:

-   he (the Claimant) should avoid her as far as possible in the future, and

-   he should give her a written apology.

7.2.   The Claimant was agreeable to the first demand but not the second.  RC told the Claimant that the apology did not need to include an admission of fault, but that JL was “upset”, and that if the Claimant did not apologize, JL had said that she would call the police and the matter would then be “out of their hands”. 

7.3.   The Claimant still refused to apologize and told RC there was no reason why JL should have been upset, and that giving her an apology in any form would only encourage her.

8.  On 19 June 2017, the Claimant sent a memo to RC and CW, reiterating his reasons for his stand.

9.1.   Two days later, on 21 June 2017 RC and CW had a meeting with the Claimant⁶.  RC informed the Claimant that they had been investigating JL’s complaint, had interviewed others there (including JL and two other witnesses who were identified), had taken legal advice, and had decided to terminate his employment with immediate effect by paying him wages in lieu of notice.  

9.2.   The Claimant asked how those witnesses could possibly have seen anything when they had not even been sitting nearby, but RC did not reply.When the Claimant asked what the witnesses had said, again RC did not respond.   

9.3.   RC said the Employer was allowed to terminate the Claimant’s contract without reason.  However he also referred to the offers made by CW and himself to the Claimant to apologize to JL, which the Claimant had refused. 

9.4.   CW said they could not force the Claimant to admit wrongdoing, and that was why they had to “find a way to resolve this issue because as an employer we have the responsibility to ensure our workforce is not being threatened by the threat of sexual harassment ...”.

9.5.   RC said to “close down this situation now”, the Claimant was given the option to resign or his employment would be terminated. 

9.6.   The Claimant was not allowed time to consider whether to resign or be terminated. He would not resign and his employment was terminated.  

10.  On 7 July 2017, the Claimant informed the Employer that he had secured the preservation of a CCTV recording at the restaurant on the day in question, and that he had decided to sue the Employer under the SDO unless certain demands were met.

11.  On 13 July 2017, the Employer’s solicitors wrote to the Claimant stating:

(a)   the decision to terminate his employment was not as a result of any claim made against him by any staff member as a result of any alleged inappropriate conduct at the lunch mentioned above;

(b)   rather, the decision was made as a result of the Claimant’s conduct during and following the investigation of that claim, where it became clear that his continued employment justified a termination within s.32K(a) of the Employment Ordinance Cap. 57 (“EO”)⁷; 

(c)   a meeting was therefore held with him on 21 June 2017 where he was given the opportunity to resign but as he was not willing to do so, his employment was terminated by payment of wages in lieu of notice within clause 14.3 of the Emp Agrmt⁸.

Legal proceedings

12.1.   A week later, on 20 July 2017 the Claimant lodged a claim against the Employer under s.5(1)(a) and s.11(2)(c) of the SDO.  Although these sections were expressed in language referring to women, s.6(1) of this Ordinance provides that they should be read as applying equally to the treatment of men.  For ease of reading, the terms have been replaced below based on the alleged facts of the present case. 

12.2.   Section 5(1)(a) would then read as follows:

“A person [the Employer] discriminates against a [man] [the Claimant] in any circumstances relevant for the purposes of any provision of this Ordinance if –

(a) on the ground of [his] sex [it] treats [him] less favourably than [it] treats or would treat a [woman] ...”.

12.3. Section 11(2)(c) is part of Part 3 of the SDO which deals with discrimination⁹ in the employment field. Section 11 deals with discrimination against employees¹⁰. It would then read as follows:

“It is unlawful for a person [the Employer], in the case of a [man] employed by [it] at an establishment in Hong Kong, to discriminate against [him] –

(c) by dismissing [him], or subjecting [him] to any other detriment”.

13.  On 18 August 2017, the Employer filed its Response which was amended on 6 October 2017.  The Employer denied the claim and averred that the Claimant’s employment was terminated in accordance with (i) the terms of his Emp Agrmt and (ii) s.32K of the EO.

14.1.   On 30 November 2017, the Employer applied to strike out the Claim on all the grounds under O.18 r.19 District Court Rules.  There was an affidavit from the Employer’s solicitor in support of the summons, which only exhibited some documents. It is notable that none of the Employer’s staff provided any affidavits or witness statements, nor did it exhibit any manuals or protocols or internal emails (other than with the Claimant) as to how it dealt with complaints of sexual harassment, whether in general or specifically. 

14.2.   The Claimant filed an affirmation in opposition exhibiting various documents including transcripts of recordings he had made at the meetings with the Employer’s representatives.

14.3.   On 11 January 2018, the Employer’s solicitors filed an Outline of Arguments stating its case that as the Emp Agrmt was terminated in accordance with its terms, the Claimant had no cause for complaint.  On19 January 2018, the solicitors filed a supplemental skeleton with submissions on the case of Ko Hon Yue v Chiu Pik Yuk¹¹to which the judge had referred at an earlier hearing¹². The solicitors submitted that “the employment of the Claimant was terminated lawfully and there is no indication of sexual discrimination against the Claimant on the basis of such termination”¹³ (Emphasis added).

The judge’s Decision

15.1.   The strike-out summons was heard on 23 January 2018.  At the hearing, the Employer’s positionregarding the terminationwas solely that termination by payment of wages in lieu of notice was lawful under the Emp Agrmt, andit did not pursuethe argument based on the Claimant’s conduct and s.32K of the EO.  

15.2.   In the Decision, the judge held that on the documentary evidence¹⁴ and the transcript of the meeting on 21 June 2017¹⁵, it was apparent that the Claimant’s employment was terminated by payment in lieu of notice in accordance with the Emp Agrmt, irrespective of what the Employer thought of the Claimant’s conduct during the investigation¹⁶. 

15.3.   The judge further held that as he had before him all the evidence of the Claimant, there was “nothing to show that but for his sex, the [Employer] would not have dismissed him.  An inference of sexual discrimination cannot be drawn from the fact that the Claimant happens to be male (or his accuser is female) or that the [Employer] has acted unreasonably or unfairly in the investigation”¹⁷.

15.4.   The judge noted that the Claimant did not intend to file a claim in the Labour Tribunal and was not alleging any breach of the Emp Agrmt or the EO on the part of the Employer.  The judge held that the Claimant’s claim was, on his analysis, “obviously unsustainable and [could] not possibly succeed”¹⁸.  Accordingly he struck out the claim and dismissed the action on the ground that the claim was frivolous.  

Discussion

16.  It is well-established that a strike-out decision is made in the exercise of a judge’s discretion, and that an appellate court would not interfere unless there was an error in law, or misapprehension of material facts, or the judge had failed to take into account relevant matters, or had taken into account irrelevant matters, or the decision was plainly wrong. 

17.1.   In the present application, it is clear from the Transcript that by the time of the hearing, the Employer had restricted its strike-outapplication to one ground only – that the claim was frivolous¹⁹.  Further the Employersubmitted that itwas entitled under the Emp Agrmt to terminate the Claimant’s employment by payment of wages in lieu and it did not pursuethe issue of the Claimant’s conduct during and following the investigation.  This led to the judge’s observation that it was “puzzling”²⁰ that the solicitors had invoked s.32K(a) of the EO in the pleaded Response, and that it was “unfortunate that the reference to s.32K(a) has led the Claimant into thinking that there were some other reasons for his dismissal”²¹.

17.2.   So pausing there, it is clear from the Outline of Arguments and Supplemental Skeleton referred to in §14.3 abovethat the Employer’s application for strike-out was made solely on the basis that the Claim was frivolous because termination of the Emp Agrmt by payment of wages in lieu of notice was lawful, and this rendered previous events (the Employer’s manner of dealing with JL’s complaint, including its treatment of the Claimant) irrelevant; or to put it colloquially, that that mode of termination “trumped” the Employer’s treatment of the Claimant which gave rise to his claim made under the SDO.  

17.3.   In my view, given that position of the Employer, its application to strike-out should have been dismissed.  It is at least reasonably arguable²² that the mode of termination of employment does not determine the issue whether the Claimant’s dismissal was lawful or not under s.11(2)(c) of the SDO.  As the long title of the SDO indicates, the Ordinance is to “render unlawful” acts of discrimination.  To take an absurd example, if an employer were to terminate a female employee’s employment by handing her wages in lieu of notice whilst saying to her “I’ve chosen you for termination of employment just because you are a woman”, it cannot possibly be argued that that termination is nevertheless lawful because of the payment of wages in lieu.  It has been rendered unlawful by the discrimination.  At the hearing before this court, Mr Hart did not dispute that proposition.

17.4.   The case of Ko Hon Yue is, with respect to the judge who referred the parties to it, immaterial.  The relevant principles in that case were contractual²³, whereas in our case, it is the SDO which (if certain facts are found) is the overriding legal principle.

18.1.  1.   This brings us to the judge’s consideration of the factual evidence which he discussed even though the Employer’s application for strike-out was based²⁴ on the mode of termination of employment.  At §36 of the Decision, he said:

“If I accept (for the purpose of argument) that the claimant had been treated unreasonably or even unfairly in the investigation process, that does not mean that the [Employer] had committed any act of discrimination under the SDO”.

18.2.   The judge cited Glasgow City Council v Zafar ²⁵and The Law Society v Bahl ²⁶in which it was held that discrimination is not determined by reference to the conduct of a hypothetical reasonable employer, but by reference to the conduct of the subject employer, who might not be a reasonable employer.  The question is whether the subject employer has treated the claimant “less favourably” for the purposes of the SDO.  

19.1.   In the present case, there is no actual comparator.  That of course would make it more difficult for the Claimant to prove his claim.  However with respect to the judge, it seems that he has erroneously restricted the purview of the relevant circumstances in the exercise of his discretion. 

19.2.   At §39, the judge stated the view that there was “nothing to show” that but for his sex, the Employer would not have dismissed the Claimant. 

20.  It is well-established that it is unusual to find direct evidence of discrimination.  What the court must do is to consider primary facts, and then see what inferences may be drawn from those primary facts.  

21.  In my view, the following pieces of evidence are sufficient to enable the Claimant to withstand a strike-out application based on the ground that the claim is “frivolous”, which the court should only permit if the claim is “not capable of reasoned argument, without foundation orwhere it cannot possibly succeed”²⁷. The court should not at this stage comment on the full merits of the claim which would be determined after full discovery, witness statements and trial.   

22.1.   First, there is evidence in the Claimant’s witness statement that there had been no complaints about his performance at work, and the Employer had in fact intended to send him to overseas conferences in August and October.  This has not been disputed. 

22.1.   Further, there is the Employer’s own evidence (in the letter dated 13 July 2017 from its solicitors) which expressly stated that the decision to terminate was not as a result of any claim made against the Claimant arising from the lunch on 2 June 2017.  As noted earlier, there was reliance in that letter on his conduct during and following the investigation, but this wasnot pursued at the hearing. 

23.1.   So one considers the other evidence on the reason for the termination of the Claimant’s employment.

23.2.   RC and CW were recorded at the meeting of 21 June 2017 referring to the Claimant’s refusal to apologize to JL, who RC had described as being “upset” because the Claimant had made contact with her waist to ask her to make room for his chair.  In the Claimant’s witness statement²⁸, he has asked the court to infer that in favouring and appeasing JL (when on the facts as recounted by him²⁹ there was no reason for her to complain), the Employer was exhibiting a pro-female bias, the direct corollary of which was that he, as a man, was discriminated against (to the extent that he was dismissed when he refused to apologize).  In other words, what the Claimant is saying is that if a woman (the hypothetical comparator) had made contact with JL’s waist to ask her to make space for a chair, the Employer would not have dismissed her (the hypothetical comparator) just for refusing to apologize.

24.  As noted earlier, there was no evidence from any staff of the Employer at the hearing before the judge (i) to substantiate the “conduct during and following the investigation” reason for termination, or (ii) to explain why it placed such importance on the refusal of an apology from the Claimant to JL, even without admission of fault.  If no explanation is forthcoming, or if it is inadequate or unsatisfactory, then it would be legitimate for the court to infer that there was discrimination against the Claimant by reason of a pro-female bias³⁰.  As was held in the Law Society case³¹,

“although bias may be inferred if there is no explanation for unreasonable behaviour, it is not the mere fact of unreasonable behaviour which entitles the court to infer discrimination, but rather the fact that there is no reason advanced for it”.

25.  With respect to the judge, in finding that there was “nothing to show that but for his sex, the [Employer] would not have dismissed him”, it would appear that he had failed to take into account the absence of evidence from the Employer to explain its conduct in the circumstances set out by the Claimant.  Exercising the discretion afresh, I take the view that the Employer has not reached the high threshold needed to strike-out the claim on the “frivolous” basis.  

Order

26.  For the foregoing reasons, the appeal was allowed, and the following consequential directions are made: the judge’s order be set aside, and the summons to strike-out be dismissed with no order as to costs (as the Claimant indicated that he would not seek costs).  The Claimant may proceed with the proceedings in the District Court which should be dealt with by a different judge. 

Hon Barma JA:

27.  I agree with the reasons for judgment of Yuen JA and the orders she proposes.