WENG CHI CHEONG v. BARCLAYS CAPITAL ASIA LTD

HCA 741/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 741 OF 2016

________________________

________________________

________________

D E C I S I O N

________________

I. INTRODUCTION

1.  On 22 March 2016, the plaintiff (“P”) commenced the present action against his former employer the defendant (“D”). In the Statement of Claim (“SoC”) endorsed on the Writ of Summons (“WoS”), P claimed that since December 2010 he was employed by D as Vice President, Global Technology pursuant to Written Particulars of Employment dated 25 November 2010 (“Written Contract”), and his work was to develop D’s SubM Native, a hardware-based high frequency trading direct market access platform. P claimed that in more than 6 months prior to termination of his employment he raised concerns on numerous occasions about major compliance violations in the design of SubM Native that was approved by D’s Noel Chetty (“Chetty”), Sumit Singhal (“Singhal”) and Loveen Jain (“Jain”) who were aware of such violations. P claimed that on 24 July 2012 he had a performance review meeting with his managers Singhal and Jain when he confronted them about SubM Native’s compliance violations. They indicated his performance review would continue the following day, but when P returned to the office the following day he was escorted to D’s human resources office where Chetty called to tell him they had lost confidence in him and his employment would be terminated. P was informed by human resources personnel he was fired because he did not get along with Singhal and Jain. Since then neither Singhal/Jain nor D explained to P the reason(s) why P was summarily dismissed. P averred that although he immediately filed complaint, D never held Singhal, Jain and Chetty accountable. P claimed that “[by] summarily firing [him] for raising [his] concerns about [D’s] compliance violations, [D] had breached the implied duty of mutual trust and confidence that it owed to [P] in the way it treated [him] leading to [his] summary dismissal”, and he claimed $8,000,000 for “reputation damage and future lost wages”, costs and further and/or other relief.

II.  PROCEDURAL HISTORY

2.  There was no dispute P sent a soft-copy of the WoS in the present action to D by email on 22 March 2016, and he physically delivered the WoS to D’s office address the following day on 23 March 2016. On 5 April 2016, D by its solicitors filed acknowledgment of service (“AS”) giving notice of intention to defend.

3.  On 3 May 2016, D filed a summons (a) pursuant to Order 12 rule 8 of the Rules of the High Court (“RHC”) to set aside the WoS, and further or alternatively, to seek a declaration that in the circumstances of the present action and pursuant to section 7 of the Labour Tribunal Ordinance Cap 25 (“LTO”), the court had no jurisdiction over D in respect of the subject matter of the claim or relief/remedy sought in the present action, and (b) costs of these proceedings be summarily assessed and paid by P to D (“Set Aside Summons”).

4.  On 6 May 2016, P filed a summons to dismiss or reject D’s Set Aside Summons. On the same day, P filed his affirmation in support of his summons (“1^st P Aff”).

5.  D filed the 1^st and 2^nd affidavits of its solicitor Gillian Louise McKenzie (“GLM”) (“1^st and 2^nd GLM Affs”) respectively on 3 May and 15 June 2016 in support of the Set Aside Summons.

6.  On 1 June 2016, Master Ho ordered inter alia that the 1^st P Aff shall stand as P’s affirmation to oppose the Set Aside Summons. On 8 July 2016, Master Chow granted leave for P to file/serve his affirmation made on 20 June 2016 (“2^nd P Aff”) to oppose the Set Aside Summons. On 25 October 2016, Master Leong granted retrospective leave for P to file/serve a further affirmation dated 8 July 2016 (“3^rd P Aff”) to oppose the Set Aside Summons (“3^rd P Aff Order”).

7.  At the substantive hearing of the Set Aside Summons on 25 October 2016 (“Master Hearing”), Master Leong delivered an oral decision (“Oral Decision”), and ordered the WoS be set aside (“Set Aside Order”), and costs of the action summarily assessed at $180,000 be to D and paid forthwith by P (“Cost Order”) (collectively, “Master Order”). The approved 3^rd P Aff and Master Orders both dated 25 October 2016[1] were sealed/filed on 24 November 2016.

8.  On 1 November 2016, P filed his Notice of Appeal against 2 facets of the Oral Decision: (a) “email is not an accepted way of serving [the WoS]”, and (b) legal costs to be paid by P, and asked for an order to be made on appeal that (i) “in the context of [P’s] lawsuit, [service by] email is not different from post”, and (ii) a taxing master be assigned to make a final determination on legal costs (“Notice of Appeal”). The hearing of the Notice of Appeal came before me on 30 November 2016 (“Appeal Hearing”).

9.  P’s appeal against a facet of the Oral Decision, ie “email is not an accepted way of serving [the WoS]”, was not an appeal against the Set Aside Order. But in an email dated 24 November 2016 P informed D’s solicitors the Notice of Appeal “was just a place holder because [he] had to file the appeal within 14 days without the actual court order”, and in fact he intended to appeal against the entire Master Order (“24/11/16 Email”). At the Appeal Hearing P confirmed such intention, but by then his intended challenge against the Set Aside Order was already out of time. Order 58 rule 1(3) of the RHC provides that “[unless] the court otherwise orders, the [Notice of Appeal] must be issued within 14 days after the judgment, order or decision appealed against was given or made ......” In my view, P could not file a limited Notice of Appeal against parts of the order made below within time, and then attempt to expand the scope of the appeal by tacking on further challenge(s) against other aspects of the order made below out of time. Such approach runs counter to the purpose of Order 58 rule 1(3) of the RHC which is to prescribe a time limit for putting forward a Notice of Appeal that clearly spells out the specific order or part thereof that is impugned so as to properly inform the court and respondent.

10.  But P claimed it was only on 24 November 2016 (ie the date of the 24/11/16 Email) that he came across crucial evidence that revealed strong grounds for him to challenge the entire Master Order including the Set Aside Order. It transpired that such allegedly crucial evidence was a series of emails between P and D’s solicitors (“New Email Evidence”).

11.  I will return to P’s oral applications made at the Appeal Hearing for leave (a) to appeal against the Set Aside Order out of time (“Appeal Application”) and (b) to rely on the New Email Evidence for the purpose of his appeal (“Evidence Application”). But before doing so, it will be useful to refer to other events that took place after the Master Hearing/Order.

III.  RELATED PROCEEDINGS

12.  On 4 November 2016 (ie after P filed the Notice of Appeal), P commenced LBTC3668/2016 in the Labour Tribunal (“Tribunal”) against D to claim damages in the sum of $104,055,763.30,[2] and to seek the following “ruling, orders and claims from the Tribunal”:

(a) a ruling that D’s termination of his employment was illegal;

(b) an order that D shall immediately reinstate his position or pay him future loss of earnings to be assessed;

(c) an order that D shall pay him compensation for his reputation loss;

(d) an order that D shall pay for all costs incurred; and

(e) further and/or other relief.

13.  In his claim in LBTC3668/2016, P also repeated the contents of the SoC in the present action, and added/claimed that:

(a) the SubM Native team was entitled to profit-sharing from revenue generated by the system as their annual bonus, but as he was dismissed by D other members of the team including Singhal, Jain and Chetty took his “slice of the bonus”;

(b) there had been tensions between him and Singhal/Jain/Chetty which culminated in the meeting on 24 July 2012;

(c) there were 8 main reasons why D dismissed him for which he gave details/particulars; and

(d) by summarily dismissing him on 25 July 2012, “[D] breached the implied duty of mutual trust and confidence, the implied term of anti-avoidance, and the implied irrationality terms of the employment contract, and other laws and regulations”.

14.  On 24 November 2016, D filed its statement to oppose P’s claim in LBTC3668/2016, claiming inter alia that (a) D validly terminated P’s employment with effect on 25 October 2012 by giving 3 months’ written notice (“Written Notice”) pursuant to the Written Contract, (b) on 25 July 2012 P signed/returned copy Written Notice indicating his agreement to its terms, (c) no further payment was due to P because on/about 20 October 2012 a final sum of $141,089.80 was paid to P comprising his wages up to 25 October 2012 and an amount for accrued but unused annual leave, and (d) the basis for P’s claim for damages was arbitrary, untenable and unsupported by particulars. In its statement, D also set out its case on relevant events that led to termination of P’s employment.

IV. LEGAL PRINCIPLES: APPEAL

15.  It is trite that an appeal from the master to judge in chambers is dealt with by an actual rehearing of the application which led to the order under appeal, and the judge treats the matter as though it came before him for the first time. The judge will give the weight it deserves to the previous decision of the master; but he is in no way bound by it.[3]

16.  At the Appeal Hearing, P made grave criticisms in respect of alleged ex parte, secret and corrupt communications between Master Leong and D’s solicitors that “kept him out of the loop”. Save that it would be necessary to refer to the Master Hearing, Master Order and transcript of the Oral Decision (“Transcript”) to address such criticisms, I shall treat P’s appeal (including the proposed appeal against the Set Aside Order for which I heard submissions on de bene esse basis) as an actual re-hearing without revisiting the reasons for decision given by Master Leong.

V.  LEGAL PRINCIPLES: APPEAL OUT OF TIME

17.  Under the proviso “unless the court otherwise orders” in Order 58 rule 1(3) of the RHC (see paragraph 9 above) and pursuant to Order 3 rule 5 of the RHC, the court has a discretion to grant enlargement of time to appeal. In Postwell Ltd v Cheng Kap Sang,[4] DHCJ Wong Yan Lung SC stated that:

“...... Although I agree ...... that the absence of an acceptable explanation for the delay does not preclude the court’s discretion to extend time, I am of the view that in applications for extension of time to appeal an adverse order or adjudication, as opposed to extension of time to remedy other procedural default, the court should be slow to accede to the application in the absence of an acceptable reason for the delay.”

18.  In considering whether to extend time to appeal, the court has to consider all relevant factors, particularly (a) the length of the delay, (b) the reasons for the delay, (c) the merits of the proposed appeal, and (d) the degree of prejudice to the other party.[5] DHCJ Peter Ng SC (as he then was) in Hady v Bazar[6] reminded that after the Civil Justice Reform (“CJR”) it is incumbent on the court to give effect to the underlying objectives of the RHC when exercising any of its powers,[7] but the court must always recognise the primary aim in exercising the powers of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.[8]

19.  In respect of P’s oral Appeal Application, Mr Thomas, solicitor for D, objected to P’s attempt at such late stage to expand his grounds of appeal to challenge the Set Aside Order. At my invitation, both Mr Thomas and P eventually agreed to deal with the Appeal Application on a de bene esse basis.[9]

20.  Although the length of the delay was not too substantial, P only intimated his intention to challenge the Set Aside Order just 6 days before the Appeal Hearing. In my view, the reason for delay was insufficient. P was well aware of the 14-days’ time limit for appeal. The 24/11/16 Email only suggested P had not received a sealed copy of the Master Order, but that should not deter him from appealing against the Set Aside Order (had he wished to do so) since he was present at the Master Hearing and must have heard the delivery of the Oral Decision. It was therefore incumbent on P to appeal against the Set Aside Order in a timely fashion.

21.  At the Appeal Hearing P submitted that his proposed appeal against the Set Aside Order rested on revelations in the New Email Evidence that came to his attention on 24 November 2016, but I am not persuaded by such explanation. First, as explained in the above paragraph, P was present at the Master Hearing and must have known there and then from the Oral Decision the grant of the Set Aside Order and also Master Leong’s reasons for decision. If he considered Master Leong erred in granting such order, he could have appealed on the perceived demerits of such decision irrespective of the New Email Evidence. Secondly, P’s proposed appeal would have entailed actual rehearing of the Set Aside Summons that led to the Set Aside Order as though it came before the judge hearing such proposed appeal for the first time, and such judge would not be bound by Master Leong’s decision. Hence, P’s reliance on the New Email Evidence to impugn the integrity of Master Leong’s decision was at best of peripheral significance to the proposed appeal. Thirdly, for reasons explained in Part XII below, P’s arguments that rested on matters canvassed in the New Email Evidence were unmeritorious and would not have constituted any valid ground of appeal. In the circumstances, I am not persuaded P’s explanation for the delay was satisfactory.

22.  But I accept lack of satisfactory reason for the delay was only one factor to be taken into account in the exercise of my discretion. Despite Mr Thomas’ complaint, I am not persuaded such delay would have caused substantial prejudice to D. It was clear from Mr Thomas’ written submissions that he was prepared to deal with a full-spectrum appeal, and he was able to respond to the New Email Evidence at the Appeal Hearing. Thus, the primary consideration in the exercise of my discretion is to secure a just resolution of the dispute between the parties.  For the reasons set out below, I consider (on de bene esse basis) the proposed appeal against the Set Aside Order wholly unmeritorious, and I therefore dismiss the Appeal Application for leave to appeal against the Set Aside Order out of time.

VI.  LEGAL PRINCIPLES: FURTHER EVIDENCE

23.  On 1 November 2016, P filed a further affirmation in support of the Notice of Appeal (“4^th P Aff”). In the 4^th P Aff, P disputed Master Leong’s view that delivery of a soft copy of the WoS to D by email on 22 March 2016 was not an accepted method of service, and P also disagreed he should pay legal costs in a sum more than $100,000 to D. These matters were in effect his submissions in respect of the Notice of Appeal. Mr Thomas had no objection for P to rely on the 4^th P Aff at the Appeal Hearing, and I granted leave for such purpose.

24.  In respect of P’s oral Evidence Application made at the Appeal Hearing for leave to rely on the New Email Evidence for his appeal under the Notice of Appeal and also for his proposed appeal against the Set Aside Order, Order 58 rule 1(5) of the RHC provides that “[no] further evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made) may be received on the hearing of an appeal under this rule except on special grounds”. The New Email Evidence came into existence after Master Leong granted the Master Order, so P argued he was entitled to rely on the New Email Evidence for the purpose of his appeal.

25.  At my invitation at the Appeal Hearing, both Mr Thomas and P agreed for me to receive the New Email Evidence on de bene esse basis. Having considered the matter, I am prepared to exercise my discretion to admit the New Email Evidence for P’s use at the Appeal Hearing. But, as seen in Part XII below, such fresh evidence could not assist P in his appeal under the Notice of Appeal. I have also considered the New Email Evidence on de bene esse basis for the purpose of P’s proposed appeal against the Set Aside Order, but again it did not aid P in such cause.

VII.  D’s AFFIDAVIT EVIDENCE

26.  D claimed it employed P pursuant to the Written Contract. On 25 July 2012, D served P the Written Notice to terminate P’s employment, and the last day of P’s employment with D was 25 October 2012. D claimed the Tribunal had exclusive jurisdiction over the subject matter of P’s claim in the SoC indorsed on the WoS, and this court had no jurisdiction over the proceedings in the present action. In April 2016, D’s solicitors wrote to inform P of D’s position and to invite him to withdraw his claim in the present action, but P refused. D added that the Set Aside Summons was not made out of time because P served the WoS on D’s office only on 23 March 2016, and his delivery of a soft copy of the WoS by email to D on 22 March 2016 did not constitute valid service.

VIII.  P’s AFFIRMATION EVIDENCE

27.  P claimed D filed its AS on 5 April 2016, but only filed the Set Aside Summons on the 29^th day counting from 5 April 2016, so it was not made “within the time limited for service for a defence” as prescribed by Order 12 rule 8(1) of the RHC, and as D failed to contest his claim by either applying for an order to dismiss it or filing a defence against it within time, it was sufficient for the court to dismiss or reject the Set Aside Summons. Further, it was said that in the context of the present action P’s email of 22 March 2016 that sent a soft copy of the WoS to D “is no different from post mail and should be accepted as such”, and P complained in the 4^th P Aff that Master Leong cut short his explanation of the whole sequence of events when Master Leong delivered the Oral Decision that service of the WoS by email was not permitted in Hong Kong.

28.  In the 3^rd P Aff, P claimed (a) D committed the tort of conspiracy against him by terminating his employment in order to cover up its compliance violations in multiple jurisdictions over a long period of time, and the main conspirators were Singhal, Jain and Chetty, (b) D intentionally inflicted emotional stress upon him by summarily firing him without giving him any reason and/or letting him clear his desk (and P repeated the matters set out in the SoC in the present action), (c) D violated his human rights (specifically the right of freedom of speech) protected by the Hong Kong Basic Law by summarily terminating his employment to punish him for speaking up, (d) D in summarily terminating P’s employment also violated Hong Kong’s anti-discrimination law in that Singhal, Jain and Chetty[10] were all of Indian race and he was “fired partially because [he was] Chinese”, and (e) D was in breach of its implied duty of trust and confidence by violating his right of freedom of speech and by discriminating against P because of his race.  P therefore suggested these matters put the present action squarely within the jurisdiction of the High Court.

29.  P claimed the High Court had in the past handled numerous cases related to breach of employment contract arising from breach of mutual trust and confidence, eg Deutsche Bank AG (Hong Kong Branch) v Daniel Mamdou-Blanco,[11] Tadjudin Sunny v Bank of America, National Association[12] and Grant David Vincent Williams v Jefferies Hong Kong Limited.[13] He pointed out that in both Tadjudin Sunny and Grant David Vincent Williams the plaintiffs (who were wrongfully and unfairly dismissed without reason) sued their former employers for a sum of money arising from breach of their employment contracts, more specifically for breach of implied duty of mutual trust and confidence against their former employers, and in those cases the court had ruled in favour of the employee plaintiffs, which demonstrated the High Court had jurisdiction over defendants in cases arising from breach of implied duty of mutual trust and confidence. On such basis, P claimed he could sue D for reputation damage and other causes in the High Court without going through the Tribunal, especially in the context of potential illegal trading activities and an attempt to cover up in multiple jurisdictions as referred to in paragraph 28 above.

30.  P suggested the informal Tribunal was to provide a quick, inexpensive and informal procedure for adjudicating disputes between employees and employers with proceedings mostly conducted in Cantonese, but the social complexity nowadays could not have been foreseen when the Tribunal was set up in 1973. P claimed the nature of the present action involved potential “serious, repeat and wilful violations of regulatory compliance and public policy by [D] in more than one region for a long period of time and [D’s] attempt to conceal such wrongdoings by firing [him]. Lawsuit of such nature is obviously too complicated for the [Tribunal] to handle. Furthermore, the cause of action is also tortious in nature and hence the case is outside the [Tribunal]’s jurisdiction”. After all, section 3 of the High Court Ordinance Cap 4 (“HCO”) provides that the High Court had unlimited civil and criminal jurisdiction.

31.  P claimed this was echoed by the presiding judge in Deutsche Bank AG (Hong Kong Branch) who observed that claims based on tort, breach of common law duties or statutory duties and the like are likely to be too complicated for the Tribunal to be able to deal with them speedily, and the establishment of the Tribunal was intended to provide an informal forum for employees to pursue their claims for unpaid wages and other statutory payments in a speedy manner. P also reminded that Deutsche Bank AG (Hong Kong Branch) held that the Tribunal had no jurisdiction to hear a claim for breach of confidence which could be founded in both contract and tort.

32.  P claimed that recently D’s former Asia Global Finance Chair Jon Pratt sued D in HCA1295/2016 (filed on 17 May 2016) for a sum of $18,922,017.20 arising out of breach of the terms of his employment contract. This case was initiated in the Tribunal as LBTC736/2016, and on 29 April 2016 the presiding officer ordered that the case be transferred to the Court of First Instance (“CFI”). P suggested such transfer showed the High Court had jurisdiction over the present action as both HCA1295/2016 and the present action were similar in nature, ie D’s former employees sued D for a sum of money arising out of breach of the terms of the employment contract.

33.  P also stated he had made a lot of effort by way of correspondence to explain to D’s solicitors why the High Court and not the Tribunal had jurisdiction over his claim in the present action. He perceived the Set Aside Summons as a tactical step to delay the proceedings after D failed to file a Defence.

IX.  SERVICE BY EMAIL

34.  In a nutshell, P claimed that because he sent a soft copy of the WoS to D by email on 22 March 2016, which should be treated the same as valid service by post, D in filing the Set Aside Summons on 3 May 2016 was outside the time limit prescribed by Order 12 rule 8 of the RHC. In my view, P’s such arguments had no merit.

35.  Section 827 of the Companies Ordinance Cap 622 (equivalent to section 356 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance Cap 32) provides that “[a] document may be served on a company by leaving it at, or sending it by post to, the company’s registered office” (my emphasis), which provision does not refer to service by email at all. There are also specific requirements in the RHC for service of a WoS. Order 10 rule 1 of the RHC provides that:

“(1) A writ must be served personally on each defendant by the plaintiff ......

(2) A writ for service on a defendant within the jurisdiction may, instead of being served personally on him, be served –

(a) by sending a copy of the writ by registered post to the defendant at his usual or last known address, or

(b) if there is a letter box for that address, by inserting through the letter box a copy of the writ enclosed in a sealed envelope addressed to the defendant.

......”

36.  The requirements of Order 10 rule 1 are clear. The starting point is that the WoS must be served personally. Order 65 rule 2 of the RHC provides that personal service of a document (including a WoS) “is effected by leaving a copy of the document with the person to be served”. The only alternatives to personal service of the WoS (ie physical delivery by leaving the WoS with the defendant) are by registered post (rule 1(2)(a)) or by insertion through a letter box (rule 1(2)(b)). Order 65 rule 3(2) of the RHC provides that:

“Where a writ is served on a body corporate in accordance with Order 10, rule 1(2), that rule shall have effect as if for the reference to the usual or last known address of the defendant there were substituted a reference to the registered or principal office of the body corporate ......”

For a corporate defendant, Keith J in Guangdong International Trust and Investment Corporation Hong Kong (Holdings) Ltd v Yuet Wah (Hong Kong) Wah Fat Ltd & anor held that service of a WoS on a company was governed by Order 10 rule 1 and Order 65 rule 3(2) of the RHC.[14] Consequently, the only valid mode of service (as alternative to personal service) was to serve the WoS on D’s registered or principal office.

37.  Plainly, other modes of service do not constitute valid service of the WoS as made clear in Hong Kong Civil Procedure 2017 as follows:[15]

“Although permitted for service of other documents, the use of a document exchange or facsimile transmission facilities is not permitted for the service of originating process. Email is not currently permitted for the service of any court documents, whether originating or otherwise, although a party could in theory agree to receive originating process by email. See para.10/1/6.” (my emphasis)

P suggested there was international acceptance of email as a proper mode of service.  But this was irrelevant here as the RHC did not permit such mode of service, and there was no evidence D had agreed to accept service of the WoS by email. In the circumstances, P only validly served the WoS by physical delivery of the WoS in the present action to D’s office on 23 March 2016.

38.  Order 12 rule 8(1) of the RHC provides that a defendant who wishes to dispute the jurisdiction of the court in the proceedings “shall, within the time limit for service of a defence, apply to the court” for such purpose. Since the WoS was served on 23 March 2016, the date by which D was required to acknowledge effective service of the WoS was 14 days later on 6 April 2016 (see Order 12 rule 5(a) of the RHC). But D filed the AS on 5 April 2016. Nevertheless, the date by which D was required to file its Defence was 28 days after 6 April 2016, ie 3 May 2016 (see Order 18 rule 2(1) of the RHC). D filed the Set Aside Summons on 3 May 2016 which was within the time limit for service of its Defence, so the Set Aside Summons was made within the time prescribed by Order 12 rule 8 of the RHC.

39.  In any event, even if D had filed the Set Aside Summons after expiration of the time prescribed by Order 12 rule 8 of the RHC (which I disagree), it would not have mattered as there was no time-bar against the Set Aside Summons. The essence of D’s application in the Set Aside Summons was that the CFI had no jurisdiction to entertain P’s claims in the WoS/SoC in the present action, which claims, according to D, were within the exclusive jurisdiction of the Tribunal. It was said (and I agree) Order 12 rule 8 of the RHC had no application. In Borchert v Drmyo Ltd & anor, DHCJ L Chan (as he then was) held that “Order 12 rule 8 of the [RHC] does not apply to claims that are within the exclusive jurisdiction of the [Tribunal]. It is not too late for the 2^nd defendant [in that case] to apply to strike out the employment claims for want of jurisdiction”.[16]

X.  JURISDICTION OVER P’s CLAIMS

40.  Section 7(1) of the LTO provides that the Tribunal shall have jurisdiction to inquire into, hear and determine the claims specified in the Schedule. The Schedule of the LTO provides as follows:

“1. A claim for a sum of money, whether liquidated or unliquidated, which arises from –

(a) the breach of a term, whether express or implied ...... of a contract of employment, whether for performance in Hong Kong or under a contract to which the Contracts for Employment Outside Hong Kong Ordinance (cap 78) applies;

......

(b)the failure of a person to comply with the provisions of the Employment Ordinance (Cap 57) ......

......

3. Notwithstanding paragraphs 1 and 2, the tribunal shall not have jurisdiction to hear and determine a claim for a sum of money (whether liquidated or unliquidated), or otherwise in respect of a cause of action, founded in tort whether arising from a breach of contract or a breach of duty imposed by a rule of common law or by any enactment.

......”

41.  Section 7(2) of the LTO provides that “[save] as is provided in this [LTO], no claim within the jurisdiction of the tribunal shall be actionable in any court in Hong Kong”. However, once the claimant commences proceedings in the Tribunal in respect of claims that are within its exclusive jurisdiction, the Tribunal may, at any stage of proceedings, if it is of the opinion that for any reason the claim should not be heard and determined by it, decline jurisdiction (see section 10(1) of the LTO). Further, when the Tribunal declines jurisdiction under section 10(1) of the LTO, it can transfer the claim to the CFI, District Court or Small Claims Tribunal (see section 10(2) of the LTO).

42.  In short, if any claim is within the exclusive jurisdiction of the Tribunal, then such claim must be commenced in the Tribunal as it is not actionable in any other court in Hong Kong (including the CFI), and then it is for the Tribunal (not, say, the CFI) to exercise its discretion to decline jurisdiction and/or to transfer such claim to another court (eg the CFI). This is borne out by the authorities. In Borchert, DHCJ L Chan (as he then was) at p 172 said he did not think section 10 of the LTO permitted the CFI to exercise jurisdiction generally over claims that are within the exclusive jurisdiction of the Tribunal, and he added that the CFI would only have jurisdiction if the claim is transferred by the Tribunal to it under section 10 of the LTO. Similar observations were made by DDJ Nancy BY Leung in Zhu Li v Mayer Brown JSM (a firm):[17]

“38. Section 7 of the [LTO] clearly confers jurisdiction on the [Tribunal] for the subject matter of this dispute and no claim within the jurisdiction of the tribunal is actionable in any court in Hong Kong unless it has been transferred from the [Tribunal]. I hence rule that this is not a case where a waiver can apply.”

Likewise in Lee Man Yee Norman v International Contractors Supply Ltd, Master H Au-Yeung said as follows:[18]

“...... once the court is satisfied that the case before it should be within the exclusive jurisdiction of the [Tribunal], the normal order to make is for the claim be struck out, and the plaintiff would have to commence a new action at the [Tribunal]. The [CFI] does not have any power, whether under the statutes or in its inherent jurisdiction, to transfer or refer the matter to the [Tribunal].”

43.  I agree with the above principles, and further agree with what DHCJ Lok (as he then was) said in Deutsche Bank AG (Hong Kong Branch), a case which P strongly relied, to be the true issue:

“11. In determining whether the [SoC] should be struck out, the first question I have to consider is whether the plaintiff’s claim falls within the exclusive jurisdiction of the [Tribunal]. If the answer is in the affirmative, this court has no option but to strike out the claim.”

44.  I now turn to consider whether P’s claims as pleaded in the SoC endorsed on the WoS in the present action (and not other wide-ranging matters set out in the 1^st, 2^nd, 3^rd and 4^th P Affs) were claims within the exclusive jurisdiction of the Tribunal. As seen from paragraph 1 above, P’s pleaded claims were for a sum of money (ie $8,000,000 for reputation damage and future loss of wages), and the cause of action was D’s breach of its implied duty of mutual trust and confidence owed to P. For reasons set out below, I have no hesitation in concluding this was a contractual employment claim falling within the exclusive jurisdiction of the Tribunal. I first turn to the trilogy of cases P relied for his contentions otherwise.

45.  In Deutsche Bank AG (Hong Kong Branch), the defendant (employee) resigned by giving 3 months’ notice to the plaintiff (employer), and he was placed on garden leave. Subsequently, the employer discovered the employee had sent an email containing confidential information of senior employees to his personal email address. The employer initiated a disciplinary investigation,[19] and alleged the employee also acted in breach of his duties of good faith and fidelity by encouraging his colleagues to leave and join a competitor. The employer sued its former employee to claim unliquidated damages and for a declaration that he was still bound by the non-competition and non-solicitation clause in his employment contract. The former employee applied to strike out such claim inter alia on the ground that it was within the exclusive jurisdiction of the Tribunal.

46.  It was held that a claim for unliquidated damages for breach of an employment contract is still one within the exclusive jurisdiction of the Tribunal under paragraph 1(a) of the Schedule to the LTO (pp 180-181). Provided that the claimant is not claiming for other than monetary relief, a claim by an employer against an employee or former employee for loss and damages arising from breach of an express or implied term of the contract of employment or breach of fiduciary duties was one falling within the exclusive jurisdiction of the Tribunal (p 182).

47.  In that case, DHCJ Lok held the CFI had jurisdiction over the employer’s claim because it was a claim for “breach of confidence” supported by the facts pleaded by the employer which could be founded both in contract and tort (and the employer’s claim for breach of fiduciary duty was more or less the same as the claim for breach of confidence), so paragraph 3 of the Schedule of the LTO was applicable to the cause of action for “breach of confidence” (and the employer’s claim was essentially a single claim for a sum of money based on 2 separate causes of action) (pp 183-185).

48.  In my view, far from being similar to the present action as P alleged, Deutsche Bank AG (Hong Kong Branch) concerned distinctly different facts. Here, there was no cause of action for “breach of confidence”; rather P’s pleaded claim rested on breach of an implied contractual term, ie D’s implied duty of mutual trust and confidence. Although the word “confidence” is used in these 2 causes of action, these causes of action are wholly distinct and different:

(a) A claim for “breach of confidence” is one for damages for misuse of confidential information.[20] Such cause of action can be tortious (ie under common law) or it can be contractual (eg breach of an express confidentiality provision in an employment contract).

(b) A claim for breach of the implied duty of mutual trust and confidence is a purely contractual claim based on breach of an implied term of contract, and the breach being alleged here was D driving P out of his employment.[21] If such breach is proved, it allows the employee to recover damages to the extent that “[the employee] suffered any additional pecuniary loss which is not too remote as a result of the [employer’s] breach of the implied trust and confidence term by driving [the employee] out of [his/her] employment ......”,[22] which in an appropriate case may include damages for financial loss flowing from damage to reputation.[23]

49.  From the above, it was immediately apparent that P’s pleaded claim here was not a claim by the employer against the employee for “breach of confidence” (and hence was wholly different from Deutsche Bank AG (Hong Kong Branch)), but was a claim against the employer for breach of the implied duty of mutual trust and confidence. It was clearly a contractual claim, and D’s solicitors had explained so to P in their letter to him dated 20 April 2016. Indeed, this was reinforced by the Court of Appeal in their judgment handed down on 20 May 2016 in Tadjudin Sunny in which they described the contractual nature of such cause of action as follows:

“58. It is now well recognized, at least in the United Kingdom and in this jurisdiction, that there exists an implied obligation of mutual trust and confidence between employer and employee: see Malik v Bank of Credit and Commerce International SA (in compulsory liquidation) [1998] 2 AC 20 (HL); Evelyn Semana Bachicha v Poon Shiu Man Henry [2000] 2 HKLRD 833 (CA); Ko Hon Yue v Liu Chung Leung and Others [2011] 1 HKLRD 733 (CA).

59. The obligation of mutual trust and confidence between employer and employee has been said to be “an overarching obligation implied by law as an incident of the contract of employment”: see Johnson v Unisys Ltd [2003] 1 AC 518 at paragraph 24, per Lord Steyn. In the same case, Lord Hoffmann said, at paragraph 35, that the contribution of the common law to the employment revolution has been the evolution of implied terms in the contract of employment, of which the most far reaching is the implied term of trust and confidence.

60. Nevertheless, the majority of the House of Lord (Lord Steyn dissenting on this issue) held that this implied obligation of mutual trust and confidence cannot be utilised to form the platform to allow an employee to recover damages for loss arising from the manner of his dismissal, ......”

50.  P also relied on Grant David Vincent Williams. In that case, the plaintiff (employee) was summarily dismissed by the defendant (employer) for gross misconduct for one issue of a marketing newsletter collated/edited by the employee that contained some inappropriate reference but was distributed before it had been reviewed/approved. DHCJ Seagroatt held the circumstances of the employee’s dismissal were unfair, and there was no justification for such dismissal. The learned judge also held “[the] way the [employer] handled the matter of the [employee’s] dismissal, the explanatory e‑mail and the excision of the [employee] from all contact with and association with the company was ...... in clear breach of the implied duty of trust and confidence which they owed him”. He awarded the employee contractual loss of earnings and benefits, damages for breach of the implied term of trust and confidence, etc.

51.  P claimed that both Grant David Vincent Williams and Tadjudin Sunny were actions for breach of contract of employment, and they demonstrated the CFI had jurisdiction over such claims, especially over claims for damages for breach of the implied duty of mutual trust and confidence, without going through the Tribunal. I am not persuaded by such submissions. The judgments in these 2 cases merely showed these 2 cases were tried in the CFI. P had not even begun to demonstrate these 2 cases were commenced in the CFI without, as P said, going through the Tribunal. As explained in paragraphs 41-42 above, if a contractual employment claim was properly commenced in the Tribunal, the presiding officer could exercise his discretion to decline jurisdiction and to transfer the claim to, say, the CFI, so the fact a contractual employment claim was tried in the CFI did not ipso facto mean the CFI had jurisdiction to deal with such claim in the first place prior to any transfer from the Tribunal. In fact, Jon Pratt’s claim in HCA1295/2016 was initiated in the Tribunal as LBTC736/2016, and subsequently transferred to the CFI by the order of the Tribunal’s presiding officer (see paragraph 32 above).

52.  For all the above reasons, I am of the view the CFI had no such jurisdiction over P’s claim despite P’s reminder that the High Court had unlimited civil jurisdiction pursuant to section 3 of the HCO. In fact, the CFI’s jurisdiction was circumscribed by section 7 and the Schedule of the LTO which gave exclusive jurisdiction of certain employment claims to the Tribunal (see paragraphs 40-43 above).

53.  P next suggested the prayer of reliefs in the SoC endorsed on the WoS in the present action sought inter alia costs and further and/or other relief, so P’s claim was a mixed claim and not merely a claim for a sum of money. There is no merit to such argument. As explained above, P’s sole cause of action was a contractual claim for breach of the implied duty of mutual trust and confidence, and the substantive relief sought was a sum of money, ie $8,000,000 for “reputation damage and future lost wages”. The claim for costs was to ask for a sum of money albeit undetermined at this stage. In any event, section 28(1)-(2) of the LTO provides the Tribunal may award costs and expenses,and in making such award of costs the Tribunal shall include a direction as to the amount to be paid by each party who is so liable to pay costs. As for the prayer for further and/or other relief, P did not articulate what particular further/other relief he had in mind. In any event, given the sole pleaded cause of action was a contractual one, there was no basis to suggest such prayer of relief concerned “unliquidated tort damage”.

54.  P next argued the present action was not a simple case as it involved potential criminal conduct in covering up massive compliance violations across multiple jurisdictions, and hence was unsuited for handling by the Tribunal which was intended to be an informal forum for employees to pursue their claims for unpaid wages and other statutory payments in a speedy manner. It was suggested the Tribunal did not have capacity to handle P’s present claim.

55.  Be that as it may, it was not for P or the CFI to decide which contractual employment claim was fit to be dealt with by the CFI or by the Tribunal. Sections 7 and 10 and the Schedule of the LTO are unambiguous; P was bound to commence his claim as pleaded in the SoC in the Tribunal, and then it was for the Tribunal’s presiding officer to exercise his/her discretion to determine whether to retain the claim in the Tribunal or to decline jurisdiction and transfer the claim to another court, say, the CFI. It was not for the CFI to usurp that discretion (see paragraph 41 above).

56.  In the 3^rd P Aff, P raised a number of allegations against D, eg that D committed the tort of conspiracy against him, that D intentionally inflicted emotional stress upon him, that D violated his human rights, that D violated anti-discrimination law etc. But these claims were not pleaded in the SoC in the present action and were therefore irrelevant. In fact, they formed the subject matter of P’s pleaded claim in HCA1996/2016 commenced on 1 August 2016 against D. In that case, P sued D for $16,000,000, costs and other relief in respect of the “tort of conspiracy and injury, tort of fraudulent concealment and tort of intentional interference of employment contract relationship, intentional violation of [his] human rights (specifically the rights to freedom of speech and expression), systemic, structural and institutional discrimination based on race, breach of implied covenant of good faith and dealing”.

57.  In the circumstances, I hold the CFI had no power/jurisdiction to entertain P’s claims in the SoC endorsed on the WoS in the present action, and the only order that could be made would be to strike out the SoC and set aside the WoS for want of jurisdiction.

58.  But even if the CFI had jurisdiction over P’s claims in the present action (which I disagree), I still would have struck out the SoC and set aside the WoS. After Master Leong granted the Master Order and indeed after P filed the Notice of Appeal, P commenced LBTC3668/2016 at the Tribunal. One of P’s pleaded causes of action in LBTC3668/2016 was breach of the implied duty of mutual trust and confidence (see paragraph 13(d) above), and some of the reliefs P sought were for future loss of earnings to be assessed and compensation for his reputation loss (see paragraph 12(b)-(c) above). Further, P’s statement by the claimant in LTBC3668/2016 repeated the fact/matters set out in the SoC endorsed on the WoS in the present action (see paragraphs 12-13 above).

59.  In short, P’s claims in LBTC3668/2016 repeated and duplicated P’s entire claim in the present action. In my view, it would be an abuse of process for P to maintain 2 legal actions on the same subject matter and the same claim. Halsbury’s Laws of Hong Kong at paragraph [90.0948] states that “[an] action may also be struck out where it is duplicitous in the sense that an action claiming materially the same relief has already been filed”.[24] Recently, HHJ Ko in Yuen Oi Yee Lisa v Charoen Sirivadhanabhakdi & ors also stated it is an abuse of process to commence multiple proceedings for the same claim.[25] Plainly, in view of the existence of LBTC3668/016, P’s claim in the present action was unnecessary and duplicitous. In my view, it would be an abuse of process to allow P to proceed with the present claim. There was no reason to disturb the Set Aside Order.

XI. COSTS BELOW

60.  P took exception to Cost Order made by Master Leong that awarded costs of the present action in D’s favour, which Master Leong summarily assessed at the Master Hearing to be $180,000 (ie roughly 60% of D’s original claim of $292,316.90 in its statement of costs).

61.  Mr Thomas submitted that since P by his Notice of Appeal did not appeal against the Set Aside Order, his appeal was in effect an appeal as to costs. On such basis, paragraph [90.1188] of Halsbury’s Laws of Hong Kong states that “[appeals] against costs order involve rather different considerations and an appeal against a master’s order as to costs will only be allowed if it can be shown that the order made was unreasonable, or erred in law or either failed to take into account proper matters or took into account matters that should not have been taken into account”.[26] But since P’s proposed appeal against the Set Aside Order was heard on de bene esse basis, the relevant principles in paragraph 15 above were applicable.

62.  For the reasons set out above and also in Part XII below, the Set Aside Order could not be faulted, and there was no merit to P’s proposed appeal against the Set Aside Order, which I have considered on de bene esse basis. That being the case, there was no reason why costs should not follow event (see Order 62 rule 3(2) of the RHC). I agree that P should be liable to pay costs of the action to D.

63.  I also agree this was a suitable case for summary assessment of costs. After the CJR, the preferable course is for judges/masters to summarily assess the costs of a case if practicable (see paragraph 6 of Practice Direction 14.3).  Here, the present action was arrested by the Master Order soon after the WoS was filed, and hence such proceedings were eminently suitable for summary assessment of costs.

64.  On the quantum of summarily assessed costs, P raised a number of complaints in the 4^th P Aff:

(a) D should not have continued to engage P in protracted argument which would have saved a lot of costs. The letter by D’s solicitors dated 15 April 2008 already threatened to apply to set aside the WoS for want of jurisdiction within 7 days, and when P refused to withdraw his claim on the following day D should have immediately filed the Set Aside Summons. Instead, D’s solicitors sent P another email on 20 April 2016 warning that action would be taken unless P withdrew his claim by 22 April 2016. Again P refused, but D’ solicitors argued with him via email why P’s claim should not belong in the CFI in an effort to persuade/convince him to withdraw the claim.

(b) Since P never signed any formal retainer with D’s solicitors, there could not have been any costs for “attendance” on P.

(c) The quantum of costs claimed was exaggerated, and there was no justification for D’s solicitors to involve 4 fee-earners given the nature of the present action and the Set Aside Summons, and in particular (i) there was no need to  involve a senior fee earner such as Mr Thomas or to have 3 fee-earners attend the Master Hearing (when GLM was said to be an experienced employment law specialist), and (ii) time was wasted at the Master Hearing because a fee-earner “messed up the dates in some of the letters to the Court”.

(d) In the 2^nd GLM Aff, GLM said legal costs in the order of $280,000 had been incurred as at 10 June 2016, which was excessive for perusal of the 1^st/2^nd P Affs, and which P suspected was due to egregious double billing by GLM as condoned by Mr Thomas. Since D’s statement of costs at the Master Hearing sought a sum of $292,316.90, it appeared that D only incurred $12,316.90 for the period from 11 June to 25 October 2016. P suggested the significant disparity between the 2 periods supported his “theory” that both GLM and Mr Thomas engaged in deceptive double billing when the workload in the 1^st period should be significantly less than that in the 2^nd period.

On the basis of the above arguments, P submitted that “anything more than HKD 5,000 is not justified”.

65.  I disagree with P’s submissions. As a starting point, Master Leong had reduced the quantum of D’s claim for costs from $292,316.90 to $180,000, and D did not appeal against such assessment. So it was incumbent on P to show why the assessed sum of $180,000 (and not the original $292,316.90) was unjustified. In respect of paragraph 64(b) above, I am afraid P misunderstood the standard form statement of costs prescribed in Appendix A of Practice Direction 14.3. “Attendance on the other side” refers to communications with the other side, eg telephone calls, letters, emails, meetings etc, and not solicitor and own client communications. In respect of paragraph 64(d) above, P also misunderstood the distinction between solicitor and own client costs and costs assessed on party and party costs. When GLM referred to legal costs of $280,000 had been incurred up to 10 June 2016 she was referring to costs incurred by D as client payable to its solicitors pursuant to their retainer (ie solicitor and own client costs), but costs in the sum of $292,316.90 claimed in the statement of costs were on party and party basis which was the basis for assessing costs payable by P as the paying party to D as receiving party under the Cost Order. There was no justification for P’s criticisms over the disparity between what he described in the 1^st and 2^nd periods, and no basis for P’s surmise of any alleged egregious or deceptive double billing.

66.  In respect of paragraph 64(a) above, D did file the Set Aside Summons within time and could not be faulted. In seeking to persuade P to withdraw his claim by explaining D’s position and the fallacy of P’s stance, D by its solicitors was attempting to avoid the costs for the Set Aside Summons, the supporting/ opposing affirmations, and the Master Hearing (and call-over hearing) and consequential professional work, and these costs could have been avoided had P heeded D’s suggestion to withdraw rather than to persist with his claim. Indeed, P himself chose to argue with D’s solicitors (which arguments I rejected), and in the 1^st P Aff he stated “[in] the past few weeks, [he] already spent a lot of time and effort explaining ...... to defendant’s legal counsel as to why the High Court, not [the Tribunal], should have jurisdiction over [his] case” (see paragraph 33 above).

67.  In respect of the summary assessment of costs of the present action, I bear in mind the guidance by the Court of Appeal for the two-stage approach in Poon Shu Fan v Wong Tin Yan.[27] In taking a global approach, I am not persuaded the total amount of $180,000 was disproportionate, and I find the items of costs claimed (as reduced globally to $180,000 by Master Leong) appeared to be reasonably incurred. In reviewing the amount of P’s claim in the statement of costs (as reduced by the learned master), I propose to adopt a broad-brush approach and not deal with every item since it is not the purpose of a summary assessment of costs to carry out any mini-taxation. Having considered the nature and scope of the SoC endorsed on the WoS, the Set Aside Summons, the relevant affirmations/affidavits, the list of authorities, what transpired at the Master Hearing, the non-involvement of counsel, I find the sum of $180,000 to be necessary and proper party and party costs for the action. In coming to this view, I have already taken into account the appropriate notional solicitor to deal with the matter, the need to delegate some professional work to junior fee-earners (with corresponding need for general care and supervision by senior fee-earner), and possible duplication of work. Having so considered the items of costs, I uphold Master Leong’s assessment.

XII. NEW EMAIL EVIDENCE

68.  The New Email Evidence consisted of a series of emails between P and D’s solicitors:

(a) On 22 November 2016, GLM wrote to P in relation to the hearing bundle for the Appeal Hearing, and proposed inter alia to use the same hearing bundle for the Master Hearing on 25 October 2016 with the following additions:

“1. the order of Master Leong, dated 27 October 2016;

2. the Notice of Appeal, which you filed on 1 November 2016;

3. a copy of the transcript of the judgment given by Master Leong on 25 October 2016, which we have requested but not yet received from the High Court; and

4. a copy of the [WoS] which you filed in the High Court in action number HCA 1996/2016, a copy of which was handed up to Master Leong during the hearing on 25 October 2016.”

(b) On the same day, P wrote to GLM asking for “a copy of the order that you have received”.

(c) On the same day, an associate of D’s solicitors replied to say they were still awaiting sealed copy of Master Leong’s order and copy transcript of his ruling “both relating to the hearing on 25 October 2016” from the court, and they “have followed up with the court in this regard and will let you have copies of these as soon as we receive them”.

(d) On 23 November 2016, P wrote to D’s solicitors to propose to postpone the appeal to a later date “when both parties have the official order and copy of the transcript needed”.

(e) On the same day, Mr Thomas replied to say “[we] are continuing to follow up with the Court as regards the status of our draft Orders, but we understand that the relevant transcript will be ready this afternoon. We will let you have copies of these once they are available”. Mr Thomas went on to say D considered it would not be appropriate to adjourn the Appeal Hearing.

(f) On the same day, P wrote to D’s solicitors to query “What is this “draft Orders”? I was asking for an official Court order from the hearing on Oct 25, not “draft Orders””.

(g) On the same day, Mr Thomas replied to explain that “[the] procedure is to lodge a draft of the order made by the Master, liaise with his Clerk to agree the wording and then have the Order sealed. This process is ongoing. Once the orders are sealed we will send you a copy of the sealed orders”.

(h) On the same day, P wrote to ask D’s solicitors to send him “a draft of the order made by the Master that you lodged with the Court? You are required to send me a copy of it”.

69.  On the basis of the New Email Evidence, P submitted there were private communications between D’s solicitors and Master Leong by which the former heavily influenced the latter in making the Master Order. He complained he was not “included in the loop” in respect of these private communications and he was not shown the “draft Orders” when all along he was asking for an “official Court order”. He claimed D’s solicitors and Master Leong were “negotiating” the Master Order behind his back, and it was a corrupt practice that required investigation by the judiciary. P claimed D should have waited for Master Leong to issue the “official Court order” and not communicate privately with Master Leong. P further claimed that as a result of these private communications, everything Master Leong did was cast into doubt, and he lost all confidence in Master Leong. He even suspected Master Leong had other private communications with D’s solicitors that he was unaware of.

70.  P submitted the Set Aside Summons was scheduled to be heard before Master Wong but was subsequently re-fixed to be heard by Master Leong at the Master Hearing. He was suspicious of the re-fixing of hearing before Master Leong. P also queried why the Transcript only comprised the Oral Decision and not the full Master Hearing. He also questioned why Mr Thomas referred to “draft Orders” in the plural in his email dated 23 November 2016 (see paragraph 68(e) above), and why GLM referred to the order of Master Leong dated 27 and not 25 October 2016 (see paragraph 68(a) above).

71.  On the above basis, P urged the court to grant the following reliefs for the appeal:

“1. Order a High Court investigation into this matter to see of any law or code of conducts had been broken by Master Leong and/or [D’s] counsels

2. Declare the hearing before Master Leong on Oct 25, 2016 invalid

3. Order a new hearing before Master Wong be held based all the submissions to the Court by October 25, 2016. If the Court cannot appoint a specific master, I request the Court to at least exclude Master Leong from this case

4. Order all the judgment and orders made by Master Leong be struck out

5. Order the costs rewards of today’s appeal go to the [P]

6. Order all the costs incurred as a result of this matter be paid by [D]”

72.  P’s contentions were serious allegations against both Master Leong and D’s solicitors, but in my view the New Email Evidence did not form any or any cogent basis for making such serious allegations. I find P’s allegations to be wholly without merit, and are almost scandalous.  They are firmly rejected by this court.

73.  As a starting point, a court order takes effect on the date when it was pronounced. Order 42 rule 3 of the RHC provides:

“(1) A judgment or order of the Court takes effect from the date of its date.

(2) Such a judgment or order shall be dated as of the day on which it is pronounced, given or made ......

......”

This meant the Master Order (ie the Set Aside and Cost Orders) and the 3^rd P Aff Order took effect as from the Master Hearing on 25 October 2016 when Master Leong granted such orders. P was present at the Master Hearing and was aware of such orders being made. Notwithstanding his severe criticisms over the preparation of the sealed copies of the Master and 3^rd P Aff Orders and the Transcript of the Oral Decision, P was conspicuously silent on how and in what respects the sealed copies of the Master and 3^rd P Aff Orders did not reflect the orders Master Leong actually granted at the Master Hearing. There was no merit to his complaint.

74.  P viewed the Transcript in a sinister light, but again there was no merit to his complaint. As part of open justice, parties to a proceeding are entitled to a copy of the written judgment made by a judge/master in that proceeding free of charge. If there is no written judgment prepared by the judge/master, a party to the proceeding who applies for a transcript of the oral judgment audio-recorded by the court shall be supplied with it free of charge. This was what D’s solicitors sought and what the court supplied. Indeed, P himself could have asked for the Transcript of the Oral Decision, which was certified by the official transcriber. Since it was not D’s appeal, D had no obligation to bespeak the transcript of the full Master Hearing when (a) application had to be made with payment of necessary charges, and (b) it was equally open to P as the plaintiff/appellant to apply for such full transcript if he wished. In any event, such full transcript was unnecessary for the appeal which was by actual rehearing. More importantly, despite P’s complaints, he did not articulate at all in what respects the available Transcript did not reflect the Oral Decision delivered at the Master Hearing.

75.  As regards the complaint of private communications between Master Leong and D’s solicitors, it is entirely without merit. Here, D being the party who filed the Set Aside Summons had carriage of the Master Order. It is not for the court (ie Master Leong) to issue any “official Court order” but rather, as Mr Thomas explained to P in his email dated 23 November 2016 (see paragraph 68(g) above), it was for D’s solicitors to submit draft order for approval by Master Leong’s clerk. Order 42 rule 5 of the RHC provides that:

“......

(5) Every order made and required to be drawn up must be drawn up by the party initiating the application upon which the order was made and if that party fails to draw up the order within 7 days after it is made any other party affected by the order may draw it up.

(6) The order referred to in paragraph (5) must, when drawn up, be produced at the Registry, together with a copy thereof, and when passed by the Registrar the order, after it had been sealed, shall be returned to the party producing it and the copy shall be lodged in the Registry.”

As explained in Hong Kong Civil Procedure 2017, “[after] hearing an application in chambers, before either a master or judge, the successful party is required to draw up the order. The draft order must be signed by the solicitor personally, and submitted to the Registrar or judge’s clerk, as appropriate for approval. Once approved, the order is collected by the party with carriage of the order, finalised, and submitted to the Registry for sealing”.[28] All this is done between the party having carriage of the order and the court, and there is no need to involve the other party. After all, the order has already been made by the master/judge and is effective on the date it was pronounced, and the task of drawing up the order is administrative in the sense of ensuring there was a formal record. D’s solicitors’ unilateral submission of drafts of the Master and 3^rd P Aff Orders to Master Leong’s clerk for approval was prescribed by Order 42 rule 5 of the RHC, and hence above suspicion.

76.  There was also no basis at all to say D’s solicitors influenced Master Leong and they “negotiated” the Master Order. The Master Order took effect on 25 October 2016 when it was pronounced, not when it was drawn up, sealed and filed with court. Amendments made by a master’s/ judge’s clerk to draft order submitted for approval, and communications between such clerk and the party having carriage of the order over the draft order and/or marked up amendments (if any) are quite usual and anticipated. Practice Direction 16.1 provides as follows:

“1. A draft order should be submitted for approval as soon as practicable but in any case not later than 7 days after the pronouncement of the order. ......

2. Draft orders will only be accepted by the Court if signed personally by a solicitor.

3. If, thereafter, a solicitor disagrees with any amendment made by the Judge or Master or his clerk, he should seek an appointment before the Judge or Master.

......

5. Solicitors are reminded that it is their duty to submit a well-considered draft for approval and they should not expect Judges or their clerks or the Registry to amend badly prepared draft orders or judgments for them. If the draft submitted requires more than minor amendments, it will be returned to the solicitors for re-drafting and re-submission for approval within a reasonable time and without delay.

6. Solicitors are also reminded that upon receipt of a sealed order from the opposite party, they should counter check the accuracy in the contents of the order and its recital.

7. A court order should properly recite parties who have attended and their representation, if any.

8. Solicitors should make sure that they have included in the recital all summonses, affidavits or affirmations relevant to the hearing / application laid before the Court when making the order.

9. Any order made at the hearing allowing or refusing leave to adduce affidavits or affirmations should also be included in the draft order.

10. Paragraphs 8 and 9 are important as a properly drafted order will, among other things, enable the appeal court to know what has been referred to and whether or not a party is seeking to adduce new evidence on appeal.

.......

12. This Practice Direction is applicable to the ...... High Court .....” (my emphasis)

It is obvious from the above that (a) the master/judge or mostly his clerk will vet and, if required, amend and mark up the draft order, and (b) there will be communications or, if required, an appointment to deal with amendments to the draft order (if any) or need for re-draft and/or re-submission of the draft order (if necessary). There is no basis whatsoever to suggest D’s solicitors influenced Master Leong or they negotiated the terms of the Master Order that had already been pronounced at the Master Hearing. It was especially telling that P did not articulate what was inaccurate in the sealed copy of the Master Order for even he accepted the learned master at the Master Hearing did set aside the WoS and did order him to pay costs of the action to D summarily assessed in the sum of $180,000.

77.  I cannot understand why P raised alarm over there being “draft Orders” in the plural. Master Leong granted the Master Order and 3^rd P Aff Order at the Master Hearing. In fact, P was the party who had carriage of the 3^rd P Aff Order, but apparently he did not draw up such order. Here, in view of the Notice of Appeal filed by P, D’s solicitors were plainly mindful of paragraphs 9-10 of Practice Direction 16.1 (see the above paragraph), and extended the professional courtesy of drawing up the 3^rd P Aff Order as well. I do not believe P disagreed that Master Leong did allow him to rely on the 3^rd P Aff at the Master Hearing, so there was no understanding of his complaint.

78.  As regards P’s query as to why GLM referred to the order of Master Leong dated 27 October and not 25 October 2016, this was plainly a clerical error. GLM’s email dated 22 November 2016 did refer to the Master Hearing held on 25 October 2016. This was clarified in the email on the same date by D’s solicitor to P that the order was “relating to the hearing on 25 October 2016” (see paragraph 68(c) above). There is also nothing in the fact that Master Leong and not Master Wong presided at the Master Hearing even though the hearing was initially scheduled to be before Master Wong. Judicial diaries are subject to exigencies of court hearings and other judicial commitments which are not always predictable.

79.  P had chosen to see a shadow in every corner, but there is nothing of substance in his complaints. In respect of the reliefs he asked for as set out in paragraph 71 above, item 1 is outside the remit of this appeal and is in any event wholly without merit. As regards items 2-3, I am unable to see any basis for such reliefs. The Master Hearing had been heard and P took the matter on appeal to this court which heard the appeal by way of rehearing. It was for this court to deal with the appeal, and there was no basis for remitting the Set Aside Summons to be heard afresh by another master. For all of the reasons set out in this Decision, I see no basis to set aside the Master Order (including the Set Aside Order[29] and Cost Order). In the circumstances, I reject items 1-4 of the reliefs sought as set out in  paragraph 71 above.

XIII. CONCLUSION

80.  In the circumstances, P’s appeal is dismissed. I also reject items 5-6 of the reliefs sought as set out in paragraph 71 above. There is no reason why costs should not follow event. I therefore grant a costs order nisi that P do pay D costs of the appeal (including all costs reserved if any) to be summary assessed and paid forthwith. D had already lodged/served its statement of costs in respect of the appeal. I grant the following directions for summary assessment of costs:

(a) P do within 14 days from the date hereof file with court and serve on D a succinct summary of objections to D’s statement of costs for the appeal of not more than 2 pages; and

(b) unless otherwise directed, the summary assessment of costs will be by paper disposal.