CHEUK KIT MAN v. FWD LIFE INSURANCE COMPANY (BERMUDA) LTD AND OTHERS

HCA 2698/2018 and
HCA 1713/2017
(Consolidated)

[2025] HKCFI 1369

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS. 2698 OF 2018 AND 1713 OF 2017

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(Transferred from DCEO 12/2017 pursuant to Order made by
District Judge Winnie Tsui dated 10^th October 2018)

____________________

 (Consolidated pursuant to Order made by Mr. Registrar S. Kwang
dated 29^thApril 2019)

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J U D G M E N T

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A. INTRODUCTION

1.  The Plaintiff (“Ms Cheuk”) claims against the Defendants for damages for breach of contract and for remedies for discrimination on the grounds of marital status and family status.

2.  The 1st Defendant (“FWD”) counterclaims against Ms Cheuk for amounts said to be due under the contract.

3.  By the time of the trial, Ms Cheuk acted in person.  However, the claims which have been brought were formulated by her former legal representatives.  Her pleadings were settled by counsel and senior counsel, at least initially, and thereafter bore her solicitors’ name.  She remained legally represented until about November 2022, by which time the parties had exchanged their respective witness statements.

B.  THE FACTUAL BACKGROUND

4.  The following matters are taken from the parties’ agreed statement of facts and chronology, matters accepted by the witnesses in their oral evidence at trial, matters stated by the witnesses and not challenged in cross-examination, or are otherwise not controversial, and I find them as facts.

B1.  Ms Cheuk’s time at Convoy

5.  Ms Cheuk started working as an insurance agent in 2008.  She worked for Convoy Financial Services Ltd (“Convoy”) from May 2008 to June 2015.

6.  Ms Cheuk married Billy Ng in 2010. At the time, both of them were working as insurance agents at Convoy, but in different teams.

7.  Ms Cheuk decided to move from Convoy to FWD as Convoy was involved in a lot of litigation at the time and it was receiving negative press coverage.  She felt that the company’s growth prospects were not good, and that this would affect her own business prospects. She did not know how many agents eventually left Convoy to join FWD, as she was just a “small potato”.

8.  Billy Ng confirmed that as Ms Cheuk was not a senior manager at the time of the move, she did not have access to the data regarding the move.  Billy Ng himself was a senior manager and was one of the persons responsible for organising the move of agents from Convoy to FWD; around two hundred and fifty agents intended to make the move.

9.  Ms Cheuk stopped working as an insurance agent of Convoy on 17th June 2015.

B2.  The Offer Letter 

10.  FWD is a licensed insurer under the Insurance Ordinance (Cap.41).

11.  On 8th May 2015, Ms Cheuk accepted FWD’s offer to be a Senior Agency Director as set out in its Letter of Offer dated 27th April 2015 (“the Offer Letter”).  The Offer Letter provided that in addition to the remuneration to which Ms Cheuk would be entitled under the Individual Agent’s Agreement between the parties, an additional remuneration package was offered exclusively to Ms Cheuk.  This package comprised three elements:

11.1  a one-off Signing Fee (“the Signing Fee”) of HK$2,174,414;

11.2  a Monthly Special Bonus (“the Monthly Bonus”) of HK$90,601 for 24 months, subject to Ms Cheuk meeting certain validation requirements as set out in Appendix 1 to the Offer Letter.  The Monthly Bonuses were to be validated based on the Production Credit Requirement set out in Appendix 1.  A percentage of the business procured by Ms Cheuk’s downline agents would also be counted towards Ms Cheuk’s own production credit; and

11.3  a Performance Bonus (“the Performance Bonus”) at the 24th, 36th 48th and 60th validation months, subject to Ms Cheuk meeting certain validation requirements by those months as set out in Appendix 2 to the Offer Letter.  Taking the first of these bonuses as an example: if Ms Cheuk achieved a production credit of $3,624,749 by the 24th validation month, she would be entitled to a Performance Bonus of $1,304,648 (or 50% of this if she achieved a production credit of $2,900,669 by the 24th validation month).

12.  The Signing Fee, Monthly Bonus and Performance Bonus (collectively, the “Additional Remuneration”) were expressed to be subject to clawback by FWD in various circumstances.  One of these was as follows.

“If your [Individual Agent’s Agreement] is terminated by [FWD] / [Ms Cheuk] for any reason within the following period from the date of your [Individual Agent’s Agreement], all received [Signing Fee, Monthly Bonus or Performance Bonus] shall be forthwith repaid by you according to the following proportion:-

Termination within	Percentage of [Signing Fee/Monthly Bonus/Performance Bonus] to be repaid
First 24th contractual month	100%
25th to 36th contractual month	60%
37th to 48th contractual month	40%
49th to 60th contractual month	20%

13.  The Offer Letter further provided that the Additional Remuneration was payable as advancements and was to be repayable according to the terms and conditions provided.  In the event that payment under the clawback clauses was not made within fourteen days upon demand, FWD was to have the right to impose interest on any amount due at the rate of 3% over the best lending rate of the Hong Kong and Shanghai Banking Corporation Limited.

14.  Ms Cheuk has received the Signing Fee of $2,174,414 and Monthly Bonuses totaling $1,993,222 (being $90,601 for twenty-two months) pursuant to the Offer Letter.

B3.  The IAA

15.  On 24th July 2015, Ms Cheuk and FWD entered into an Individual Agent’s Agreement (“the IAA”).  The IAA contained the following terms.

“3. INDEMNITY

The Agent shall indemnify the Company, its officers, directors, employees and other agents and hold them harmless against all and any losses, damages, claims, demands, expenses including legal costs on an indemnity basis and other liabilities that may be imposed on, incurred by or asserted against the Company or its officers, directors, employees or other agents as a result of any breach of the terms of [the IAA] by the Agent …

…

5. REMUNERATION

5.1 For the services to be rendered by the Agent under this Agreement, he shall be entitled to the remuneration calculated in accordance with the Schedule of Commission and Conditions of Remuneration (including the Agency Compensation Package & Fringe Benefits) as amended by the Company from time to time…

…

7. TERM AND TERMINATION

…

7.2 This Agreement may be terminated by the Company immediately and without notice and liability to the Agent in the event of:

7.2.1 fraud, dishonesty or breach of trust…

7.2.2 a material breach of any of the provisions of this Agreement…

7.2.3 the Agent being the subject of a bankruptcy petition…

7.2.4 the Agent failing to meet the minimum standards of competence….

7.3 Subject to Clause 7.4 of this Agreement, this Agreement may be terminated by either the Company or the Agent giving to the other not less than six (6) days’ prior written notice or a shorter notice period as agreed by the Company and the Agent.

…

7.10 Upon the termination of this Agreement, the Company will, as soon as practicable, compute the balance of the commission account of the Agent as of that date. If there is a credit balance:

7.10.1 all advances made by the Company to the Agent pursuant to Clause 6 and any other indebtedness of the Agent to the Company, irrespective of whether such advances or other indebtedness are otherwise repayable on the termination of this Agreement or on the occurrence of any other event, shall be deducted from that credit balance…

7.11 In the event that the balance of the commission account as calculated in accordance with Clause 7.10 is a debit balance, then the aggregate of:

7.11.1 the amount of such debit balance; and

7.11.2 all the advances and indebtedness of the kind referred to in Clause 7.10.1, shall be paid forthwith by the Agent to the Company. ... All fees, expenses and charges incurred by the Company in relation to the debt recovery/ collection shall be borne by the Agent.

…

16.  Ms Cheuk and FWD also entered into an Agency Management Agreement on the same date, but this is not relevant for present purposes.

B4.  “Give Me Five” Sales Incentive Scheme

17.  FWD operated an incentive scheme called the “Give Me Five” Sales Incentive Scheme.  Rule 5 of the scheme rules provided that if an agent’s Individual Agent’s Agreement was terminated for whatever reason on or before 30th April 2018, he would have to repay all incentives received under the scheme, and that the scheme rules would form part of the agent’s contractual relationship with FWD.

18.  Ms Cheuk received $15,363.23 pursuant to the scheme for 2015 and $4,190.78 pursuant to the scheme for 2016 (totaling $19,554.01) (“the Incentive Payments”).

B5.  The personnel and organisation structure at FWD

19.  Ms Cheuk joined Region 54 within FWD.  Her supervisor and direct manager^[1] was the 5th Defendant Mr Li Yuk Shu (“D5 Dick Li”), who held the position of Regional Director.  D5 Dick Li in turn reported to the 3rd Defendant Mr Chow Kin Fai (“D3 Ricky Chow”), who was employed as the Assistant Vice President (Agency Recruitment) of FWD at the material time, responsible for (inter alia) the appointment, management and termination of insurance agents.  D3 Ricky Chow in turn reported to the 6th Defendant Mr Joseph Ho (“D6 Joseph Ho”), who was employed as the Chief Agency Officer of FWD.

20.  Billy Ng joined FWD shortly after Ms Cheuk joined, pursuant to an IAA dated 29th July 2015.  A large group of agents, including D5 Dick Li and Mr Chik, had left Convoy together and joined FWD.

21.  Region 54 then had three regional directors: Billy Ng, D5 Dick Li and Chik Wing Keung (“Mr Chik”).  Each of these regional directors had their own separate teams of agents.  Ms Cheuk was in D5 Dick Li’s team and had no formal working relationship with either Billy Ng or Mr Chik.

22.  The other personnel of FWD who are defendants in these proceedings are the 2nd Defendant Mr Wong David Tai Wai (“D2 David Wong”), who was the Chief Executive Officer at the material time, and was responsible for directing and overseeing the management of FWD’s overall operations and business development, and the 4th Defendant Ms Yvonne Poon (“D4 Yvonne Poon”), who was the Senior Manager of Agency Recruitment at the material time, and a subordinate of D3 Ricky Chow.

23.  In January 2017, Billy Ng left Region 54 and set up Region 59.

B6.  Ms Cheuk’s performance in FWD

24.  As Senior Agency Director, one of Ms Cheuk’s main duties was to recruit insurance agents for FWD so that the sales team for FWD’s products would grow.  When Ms Cheuk joined FWD, she had a team of about thirty or forty agents downline from her.  During her twenty-two months with FWD, she managed to expand this to a team of about ninety agents.  She says, without challenge, that this was proof that she managed her team well enough to attract and retain talent.

25.  Ms Cheuk attended work diligently. In the months of March, April and May 2017 (the period scrutinised at trial), Ms Cheuk went to the office regularly.

26.  Ms Cheuk’s production credit for the twenty-two month period from July 2015 to April 2017 was $2,298,199.58, which exceeded the Monthly Bonus validation requirements set out in the Offer Letter. Accordingly, Ms Cheuk was paid Monthly Bonuses for every one of the twenty-two months she spent with FWD.  Before leaving FWD, she did not achieve the $3,624,749 requirement (to be achieved within twenty-four months) for the grant of a Performance Bonus (or the $2,900,669 requirement for the grant of 50% of the bonus).

27.  Ms Cheuk received payments under the “Give Me Five” Sales Incentive Scheme in both 2015 and 2016.

28.  Ms Cheuk was awarded an International Management Award Platinum by the General Agents and Managers Association International Hong Kong in 2017.  D5 Dick Li acknowledged that not many colleagues in his team received awards.

29.  D5 Dick Li gave evidence that he was satisfied with Ms Cheuk’s performance during her time at FWD.

30.  Ms Cheuk did not receive any complaint or warning about her work performance at FWD.

B7.  The events leading to termination of Ms Cheuk’s IAA

31.  Billy Ng was dissatisfied with various aspects of working at FWD.  He said that FWD made various unilateral changes without consulting its agents.  He complained to D6 Joseph Ho about these matters. In about February 2017, he was invited by the Chief Agency Officer of another insurer (“AIA”) to join them.  He did not commit to doing so at that stage.

32.  Back at FWD, from about March 2017, he told D6 Joseph Ho that if his grievances were not addressed, he would leave FWD, and take his team with him.  He also suggested to Mr Chik and D5 Dick Li that they should leave together, as (in his view) FWD was not a good company. Initially, he did not in fact intend to leave FWD, but simply to get FWD to address what he considered to be the inadequacies of FWD.  Subsequently, he became determined to leave.  He told about ten-odd colleagues that he would be leaving, and the reasons for his decision (in evidence, he said that he told less than ten of his downline agents and less than three other agents).

33.  There is a factual dispute as to whether Billy Ng told others that Ms Cheuk would leave with him as well, whether Ms Cheuk herself indicated that she wanted to leave, and whether Ms Cheuk solicited colleagues to leave.  In particular, the Defendants allege that there was a dinner in about April 2017, attended by Billy Ng, Ms Cheuk, Charleson Ng and his wife, at which Billy Ng and Ms Cheuk sought to persuade Charleson Ng, an Agency Director within Region 54, to leave FWD for AIA.  I return to these matters below.

34.  D6 Joseph Ho, Mr Chik, and D5 Dick Li sought to persuade Billy Ng to stay, but they were unsuccessful.  On 28th April 2017, there was a meeting between D3 Ricky Chow and Billy Ng at the clubhouse of The Harbourside, at which the latter expressed his intention to leave FWD. There is some dispute as to what was said at this meeting.

35.  On 5th May 2017, Billy Ng gave written notice to FWD to terminate his IAA.  FWD subsequently acknowledged this in a letter of 12th May 2017, and acknowledged that the IAA would be terminated with effect from 12th May 2017.

36.  Also on 5th May 2017, D5 Dick Li signed an “Individual Agent Termination Form” recommending termination of Ms Cheuk’s IAA (“the Termination Form”).  On the form, in the section “Reason(s) for Termination”, none of the pre-printed reasons were selected, and no reason was stated in the blank provided for the filling in of reasons other than the pre-printed reasons.  D5 Dick Li submitted the form on that day to the Distribution Support department for further processing.

37.  On 8th May 2017, FWD gave notice to Ms Cheuk of termination of her IAA, to take effect on 17th May 2017 (“the Termination Letter”).  When Ms Cheuk went to work on 8th May 2017, she had not yet received the notice, as this had been posted to her.  She was surprised to discover that she was unable to access the FWD intranet.  She was devastated when she received the Termination Letter, and could not believe that FWD had terminated her IAA in such a manner given all the effort she had put into her work.

B8.  The reasons given to Ms Cheuk for the termination of her IAA and the aftermath of the termination

38.  The Termination Letter did not state a reason for the termination.  Ms Cheuk repeatedly sought an explanation from D5 Dick Li, who was her direct supervisor.  It was only in her conversations of 21st and 25th August 2017 with D5 Dick Li that she received an indication of the reasons for the termination.  D5 Dick Li alluded to the fact that Ms Cheuk and Billy Ng were a couple, and also to someone having said something about Ms Cheuk talking to someone about something.  He said that the decision to terminate had been made by D2 David Wong.  The Defendants’ pleaded case is that no reason was given to Ms Cheuk during these conversations.

39.  The Defendants’ Defences^[2] pleaded that when FWD issued the Termination Letter, one of its main concerns was to control the damage caused by the solicitations of FWD’s agents by Ms Cheuk and Billy Ng to join AIA.

40.  The transcripts of Ms Cheuk’s conversations with D5 Dick Li also show, and FWD has not suggested otherwise, that Ms Cheuk initially was willing to pay the amounts demanded by FWD in instalments, but she was unable – at least as at August 2017 – to get FWD to accept this arrangement.

41.  FWD sent letters to the clients dealt with by Ms Cheuk, presumably to notify them about her departure.  She said that although she understood that FWD would have to give such a notification, such letters made her look irresponsible.  Presumably, given that she had no advance warning of the termination, she did not have the opportunity to talk to her clients first.

B9.  FWD’s demand

42.  At the time when Ms Cheuk’s IAA was terminated, FWD owed her commission in the amount of $116,507.71, as shown by the credit balance in her commission account with FWD (“the Credit Balance”).

43.  On 31st May 2017, FWD issued a letter to Ms Cheuk, demanding repayment of $4,070,682.30, calculated as follows.

Signing Fee	$2,174,414.00
Monthly Bonuses	$1,993,222.00
Incentive Payment for 2015	$15,363.23
Incentive Payment for 2016	$4,190.78
Credit Balance - commission outstanding from FWD	($116,507.71)

C.  THE PARTIES’ CASES

44.  Ms Cheuk says that she never indicated that she was going to leave FWD; nor did she ever solicit colleagues to leave FWD to join AIA. She says that the Defendants wrongly attributed her husband’s intentions and actions to her.  She is aggrieved that FWD terminated her IAA simply because Billy Ng gave notice that he would leave FWD.

45.  The case pleaded by lawyers on Ms Cheuk’s behalf is twofold.

46.  First, it is said that the Defendants acted in breach of the IAA by terminating it and by refusing to explain the termination to Ms Cheuk. It is said that the IAA contained two implied terms:

46.1  that the power to terminate the IAA under cl.7.3 would be exercised in good faith and would not be exercised arbitrarily, capriciously, perversely or for irrational reasons (“the Good Faith Term”); and

46.2  that the IAA would not be terminated under cl.7.3 without valid reasons (“the Valid Reasons Term”).

47.  It is said that the breach of the implied terms caused Ms Cheuk to lose the Credit Balance of $116,507.71, and the Performance Bonus of $1,304,608 which she could have expected to receive after twenty-four months.

48.  Second, it is said that Ms Cheuk’s marital status or family status, as the wife of Billy Ng, was the sole reason, or one of the reasons, for the Defendants’ decision to terminate her IAA, and that this was unlawful under the Sex Discrimination Ordinance, Cap.480 (“the SDO”) or the Family Status Discrimination Ordinance, Cap.527 (“the FSDO”).

49.  In addition to the lost Credit Balance and Performance Bonus, the Statement of Claim seeks declaratory relief, injunctive relief, an apology, damages for injury to feelings, punitive damages, and an order that FWD was not entitled to repayment of the Signing Fee, Monthly Bonuses, and Incentive Payments received by Ms Cheuk.

50.  The Defendants deny that the IAA contained the implied terms contended for.  They say that in any event, there was no breach, because one of FWD’s main concerns when it issued the Termination Letter was to control the damage caused by the solicitation of its agents by Ms Cheuk and Billy Ng; and another of its concerns was that FWD’s confidential information to which Ms Cheuk had access could potentially be leaked to AIA via Billy Ng.  For the same reason, the Defendants say that there was no discrimination against Ms Cheuk.

51.  FWD counterclaims for the Signing Fee, Monthly Bonuses and Incentive Payments received by Ms Cheuk, giving credit for the Credit Balance.

D.  THE DISPUTES OF FACT

52.  I first deal with the factual disputes between the parties.  As mentioned above, the pleaded defence for all of the Defendants was that one of the main concerns of FWD in issuing the Termination Letter was to “control the damage caused by the solicitations of [FWD’s] agents by [Ms Cheuk] and the Husband to join AIA”.^[3]  The Defences also refer to FWD’s concern about the leak of confidential information, but as explained by various witnesses at trial, this was part and parcel of the concern about solicitations of FWD’s agents – the concern was that FWD’s information could be used to tailor an attractive package to entice away its agents.

D1.  Whether Ms Cheuk engaged in solicitation of FWD’s agents

53.  I do not accept that Ms Cheuk engaged in solicitation of FWD’s agents.  I find that she did not.

54.  Ms Cheuk was a straightforward witness who gave her evidence clearly and without embellishment.  I find her to be a truthful witness, and whilst there may have been one or two discrepancies in her account when comparing her witness statements and her oral evidence, on the whole I accept her evidence.  It will also be seen below that I consider the evidence of D5 Dick Li, D3 Ricky Chow and D6 Joseph Ho to be unsatisfactory and unreliable in a number of respects, and I therefore prefer the evidence of Ms Cheuk where there is a conflict with the evidence of those witnesses.

55.  Ms Cheuk explained that Billy Ng first indicated to her in about April 2017 that he intended to leave FWD and join AIA.  Whilst she supported Billy Ng’s decision as his wife, she expressly told him that she herself would stay in FWD to develop her career.  Furthermore, since he would be taking a more adventurous path, she believed that she should be more conservative and stay in FWD to earn a relatively stable income, so as to ensure that the family would have adequate financial resources to support their two children.  About two-thirds of Ms Cheuk’s income was generated by the production of her downline team rather than Ms Cheuk’s direct sales.  She pointed out in cross-examination that there was no reason for her to give up such a stable income.

56.  Ms Cheuk also explained that she was aware of the fact that if she resigned before the end of her sixtieth contractual month, she might have to repay all or part of her Signing Fee and bonuses to FWD.  This consideration further reinforced her belief that she should stay with FWD.

57.  Whilst AIA had made her an offer, this was something communicated through Billy Ng.  She had not approached AIA, nor had AIA approached her.  She had turned down the offer.  It is true that after FWD terminated her IAA, she joined AIA in July 2017, but that had not been her plan.  She did this because the termination was sudden, so that at that point in time, she had “no direction” as to what to do, and then after she joined AIA, she gained some clients, so that she did not later look for a different insurer to move to.

58.  She was aware that at some point, Billy Ng told Mr Chik about his intention to leave FWD.  She was not aware, until she read the witness statements in this case, that Billy Ng had also told D5 Dick Li and D6 Joseph Ho of his intention to leave FWD.  She was not present at any of the discussions at which D5 Dick Li said that he, Mr Chik and D6 Joseph Ho had with Billy Ng in order to persuade him to stay with FWD.

59.  In Ms Cheuk’s witness statement, she referred to the allegation in the Defendants’ Defences that she and Billy Ng had enticed Charleson Ng and other agents of FWD to leave it to join AIA.  She denied this allegation.  I note that Billy Ng in his oral evidence acknowledged that he had indeed asked some colleagues whether they might want to leave FWD to join AIA, including Mr Chik and D5 Dick Li, three of his own downline agents, and Charleson Ng, although he said that these were not conversations to which Ms Cheuk was privy.  Ms Cheuk’s witness statement is incorrect in this regard as regards Billy Ng’s solicitation. However, it does not follow from this that Ms Cheuk engaged in solicitation herself, or even that she was aware of Billy Ng’s discussions with his colleagues.  When, as explained in this section, the whole of the evidence is considered, I am satisfied that she did not engage in the alleged solicitation.

60.  From the start, there has been a paucity of particulars, let alone evidence, of the supposed solicitation carried out by Ms Cheuk.  Given the allegation made by the Defendants,^[4] Ms Cheuk asked for further and better particulars.  The allegation, or to be more precise, the three allegations, were that:

“In or about April 2017, [D5 Dick Li] was informed by Mr Charleson Ng … that he was invited to dinner with his wife by [Ms Cheuk] and [Billy Ng] to discuss … joining [AIA], a major competitor of [FWD]”;

“[D5 Dick Li] was then shown the whatsapp messages sent by [Ms Cheuk and Billy Ng] to Mr Charleson Ng enticing him to leave [FWD] to join [AIA]”; and

“In or about April to May 2017, [D5 Dick Li] also saw whatsapp messages from [Ms Cheuk and Billy Ng] to other agents of [FWD] enticing them to leave [FWD] to join [AIA]”.

61.  When the allegations were made, D5 Dick Li was not yet a defendant to the proceedings, but was clearly the source of the information for this allegation made by the 1st to 4th Defendants (as he acknowledged). However, he was unable to provide particulars of the allegations to enable the 1st to 4th Defendants to answer the request for particulars.^[5]

61.1  When asked for particulars of the allegation regarding the dinner with Charleson Ng, all that the 1st to 4th Defendants could say (in February 2019) was that “Mr Li was not informed of such details” and that his request for details had been turned down by Charleson Ng.  What is noteworthy is that although D5 Dick Li had supposedly alleged that Ms Cheuk had solicited Charleson Ng, he shrank from this when providing the information for the 1st to 4th Defendants’ particulars.  In particular, when asked whether Ms Cheuk had (1) solicited Charleson Ng during the dinner, (2) said that she would leave FWD, or (3) said that she would join AIA, D5 Dick Li said that he was not informed of such details.

61.2  When asked for particulars of the allegation regarding the WhatsApp messages sent by Ms Cheuk to Charleson Ng enticing him to leave FWD to join AIA, such as whether they had actually been sent by Ms Cheuk herself, all that the 1st to 4th Defendants could say was that “Mr Li was unable to recall such details”.  Yet these were messages which D5 Dick Li had supposedly seen and which formed the basis of the allegation that Ms Cheuk had sent WhatsApp messages to Charleson Ng enticing him to leave FWD.

61.3  When asked for particulars of the allegation regarding the WhatsApp messages sent by Ms Cheuk to other agents enticing them to leave FWD, all that the 1st to 4th Defendants could say was that “Mr Li had not been shown such whatsapp messages who [sic] had only heard from other agents about such enticing act by [Ms Cheuk and Billy Ng] (necessary amendments to the Defence will be made)”.  In other words, D5 Dick Li shrank from his allegation that Ms Cheuk had sent enticement WhatsApp messages to other agents.  I would note here that in the Defence of the 1st to 4th Defendants and the Defence of the 5th Defendant, the allegation was changed to one of being that D5 Dick Li “heard” that Ms Cheuk and Billy Ng had sent WhatsApp messages to other agents enticing them to leave FWD.  When cross-examined about the allegation that Ms Cheuk had recruited other agents, D5 Dick Li’s response was that there were “some rumours” which he could not confirm.  In other words, he shrank further from the original allegation.

62.  Of the Defendants’ witnesses, only D5 Dick Li gave any evidence in his witness statement that there had been solicitation by Ms Cheuk.  He said that in about April 2017, Charleson Ng told him that Ms Cheuk and Billy Ng had invited him and his wife to dinner to discuss joining AIA, and that during the dinner, Ms Cheuk and Billy Ng had shown him the remuneration package for AIA.  He further said that other agents had told him that Billy Ng “and/or” Ms Cheuk had approached them to try to persuade them to leave FWD and join AIA.  This evidence did not stand up to cross-examination.

62.1  When asked about the WhatsApp messages allegedly sent by Ms Cheuk and Billy Ng to Charleson Ng, D5 Dick Li said that Charleson Ng told him about them but he did not look at them. Then he said that Charleson Ng showed him a WhatsApp conversation, but he could not remember what it was about, and he could not remember who was on the other end of the conversation from Charleson Ng;

62.2  As regards the “other agents” allegedly solicited by Ms Cheuk, initially D5 Dick Li said that there were three or four such other agents, but he was unable to recall their names; later on he said that in fact the agents were solicited by Billy Ng and not Ms Cheuk (and that of these he only reported the “serious” ones to FWD), and that the only agent solicited by Ms Cheuk was Charleson Ng; and still later on he said that there were “some rumours” which he could not confirm about Ms Cheuk soliciting other agents.

63.  Billy Ng explained that he and Ms Cheuk had had dinner with Charleson Ng and his wife, as Ms Cheuk had known Charleson Ng’s wife for many years even prior to her time at Convoy.  Billy Ng considered Charleson Ng and his wife to be friends, so he wanted to explain to them why he was leaving FWD.  At the dinner, Billy Ng did not talk about his remuneration package at AIA, as Charleson Ng would have known about this, given his seniority in the industry.  Rather, he talked about why he thought the prospects at FWD were not so good, and he talked about what developments at AIA might be like.  He did not think that he asked Charleson Ng’s interest in leaving at the dinner, because he recalled that it was after the dinner that he messaged Charleson Ng to see whether he might want to know more about AIA; Charleson Ng replied to say that it was not necessary, and that was the end of it.

64.  Billy Ng’s account of the dinner with Charleson Ng was not challenged, and I accept it.  The Defendants put forward a different version of the dinner, supposedly relying on what Charleson Ng told D5 Dick Li,^[6] but they did not call Charleson Ng, who is still with FWD, to give evidence. Mr Chan submitted that there was no basis to draw an adverse inference by reason of such failure, and that Ms Cheuk could equally have called Charleson Ng to give evidence.  However, this is not a matter of drawing an adverse inference.  It is simply a question of looking at what evidence has been placed before the court, and assessing how reliable such evidence is.  On the one hand, there is evidence from Ms Cheuk, who was at the dinner, and says that she did not solicit anybody, whether at the dinner or otherwise; and from Billy Ng, who was also at the dinner, and says that it was a dinner amongst friends at which he explained why he was leaving. On the other hand, there is hearsay evidence from D5 Dick Li, of a shifting nature, and which when scrutinised does not in fact even amount to hearsay evidence that Ms Cheuk solicited Charleson Ng at the dinner.

65.  The Defendants submitted that Ms Cheuk herself gave no positive case regarding the dinner, that her pleaded case did not even acknowledge that the dinner had occurred, that her pleaded position was contradicted by Billy Ng’s admission that he sent a message to Charleson Ng about joining AIA, and that the dinner was for the purpose of discussing joining AIA, so that Ms Cheuk’s denial that Billy Ng sought to persuade Charleson Ng to leave FWD and join AIA was “patently false”.  However, Ms Cheuk, who was acting in person, cannot really be criticised for not having said much about the dinner.  The cross-examination of Ms Cheuk on behalf of the 1st to 4th and 6th Defendants on this topic was confined to attempts to ask about D5 Dick Li’s and FWD’s beliefs as to whether Ms Cheuk had solicited colleagues, which were of course not matters which Ms Cheuk could be expected to speak to.  On behalf of the 5th Defendant, D5 Dick Li’s description of the dinner was put to Ms Cheuk, who disagreed with it.  There was then no further exploration of the subject.

66.  There is then the evidence of D3 Ricky Chow, to whom D5 Dick Li reported.  He did not mention any solicitation by Ms Cheuk in his witness statement at all.  At best, he says that after Billy Ng tendered his notice of termination, D5 Dick Li recommended that Ms Cheuk’s IAA be terminated, “to avoid disclosure of confidential commercial information and to upkeep the morale of Regions 54 and 59”.  This could be said to be linked to a fear of potential use of information for solicitation, but is not evidence that prior to Billy Ng’s departure, Ms Cheuk had engaged in any solicitation.

67.  In cross-examination, D3 Ricky Chow’s evidence mutated.

67.1  When he was first asked whether he had evidence that Ms Cheuk had solicited her colleagues to leave FWD, he said that there were witnesses to the solicitation, who complained to D5 Dick Li and Mr Chik; he named Charleson Ng as a witness (he named no others).  However, he himself did not have any contact with any agent who told him about such solicitation.  It was only D5 Dick Li and Mr Chik who complained to him about this.

67.2  A few questions later, he said that he received complaints from D5 Dick Li and Mr Chik that Billy Ng intended to leave and had solicited colleagues.  When he was asked whether he contacted Charleson Ng to find out about the complaints, D3 Ricky Chow said that he did ask him – thus contradicting his earlier answer that he did not speak to any of the agents solicited.

67.3  When he was later asked why he had approached Charleson Ng, D3 Ricky Chow said that he was a victim of solicitation, so he wanted to see what Charleson Ng had to say.

67.4  A few questions later, he then said that he was “sure” that at the dinner, Mr and Mrs Ng (Billy Ng and Ms Cheuk) were the recruiters, and that Charleson Ng was being recruited.  D3 Ricky Chow said that this was not his mere speculation because Charleson Ng himself told him this.

67.5  A few questions later, he said that Charleson Ng “complained” to him about the attempt to recruit him, as did D5 Dick Li.

68.  I cannot place any credence on this evidence, which changed from one of not having talked to any of the agents being solicited, including Charleson Ng, to one of being sure that Charleson Ng was recruited by Ms Cheuk and Billy Ng at the dinner because Charleson Ng directly complained about this to D3 Ricky Chow himself.

69.  Next, there is the evidence of D6 Joseph Ho, to whom D3 Ricky Chow reported.  Again, D6 Joseph Ho did not mention any solicitation by Ms Cheuk in his witness statement.  The statement mentioned D5 Dick Li’s recommendation, after Billy Ng had given notice of termination, to terminate Ms Cheuk’s IAA, to “avoid leaks of confidential commercial information to competitor and to restore the morale of the agency teams that Ng had left”.  The statement went on to say that D3 Ricky Chow took the view that Ms Cheuk’s agency should be “terminated for controlling the damage caused by the departure of Ng and avoiding the risk of leaking confidential information to competitor”.  In his oral testimony, D6 Joseph Ho said that this latter part included a reference to Ms Cheuk soliciting colleagues to leave FWD.

70.  Regarding the dinner with Charleson Ng, D6 Joseph Ho said that he did not speak to Charleson Ng, but he had heard about it from D3 Ricky Chow, D5 Dick Li and Mr Chik.  His evidence could therefore not take the matter any further than the evidence from D3 Ricky Chow and D5 Dick Li.

71.  D6 Joseph Ho was also asked whether he had heard from Mr Chik or D5 Dick Li that Ms Cheuk (rather than Billy Ng) had attempted to solicit the two of them to join AIA.  He said that he could not remember.

72.  The other witnesses called by the Defendants had no evidence to give as regards the allegation that Ms Cheuk solicited her colleagues to leave FWD to join AIA.

73.  Ms Cheuk was extensively cross-examined about her involvement in Synnix, said to be an unofficial group of agents established by Billy Ng in order to promote team culture by holding recruitment functions, training and team bonding activities for the agents of FWD.  The cross-examination proceeded along the lines that Synnix was some sort of cross-team, tight-knit organisation, of which Ms Cheuk was a senior member, and that many of its members had been part of the move from Convoy to FWD.  Insofar as the suggestion was that although Ms Cheuk was not in the same team of agents as Billy Ng, she worked closely with him and engaged in joint recruitment activities, and that this was part of Ms Cheuk’s solicitation of agents, I do not accept this.  I accept Ms Cheuk’s evidence about Synnix, which was as follows.  There was no such thing as “membership” of Synnix, as it was an unofficial and open group, and anyone could take part in its activities, which included hiking and social events.  She took part in some of the group’s activities.  She was not one of the persons in charge of the group.  She was asked to present awards at some of the activities because she was relatively more experienced, or relatively more senior in her involvement with Synnix activities, so she was invited as a guest to present the awards.  The people who took part in the activities were not all from her or Billy Ng’s team.  The agents who left Convoy to join FWD were not all Synnix participants.  After Billy Ng joined FWD, he continued to organise recruiting, training and team activities in the name of Synnix.  The activities were open to clients, agents’ friends, or agents from other insurance companies to join.  Ms Cheuk rarely attended the events herself, so she could not say what activities took place from January to April 2017.

74.  There was no contemporaneous record of the alleged solicitation by Ms Cheuk.

74.1  The Termination Form signed by D5 Dick Li recommending termination of Ms Cheuk’s IAA left blank the section for “reasons for termination”.

74.2  The Termination Letter did not state that Ms Cheuk had engaged in solicitation.

74.3  In D5 Dick Li’s conversation with Ms Cheuk of 25th August 2017, when Ms Cheuk asked what reason was given to D5 Dick Li asking him to sign the Termination Form, D5 Dick Li said that someone – probably D3 Ricky Chow – said something about Ms Cheuk talking to someone about something.  In the cross-examination of D5 Dick Li by Mr Ho, it was sought to say that this was a reference to Ms Cheuk’s solicitation of Charleson Ng and four agents, and D5 Dick Li took up this suggestion.  It is difficult to accept that D5 Dick Li could in 2025 clearly recall that this vague transcribed statement was such a reference.  Mr Chan himself submitted that it would be unsafe to rely on words used in the conversation unless their meaning was clear from the face of the words used.

75.  Mr Chan submitted that even if Billy Ng was the primary instigator of various acts of solicitation, it was likely that Ms Cheuk “assisted or at least supported” his attempts.^[7]  This was not the Defendants’ pleaded case.  The pleaded case against Ms Cheuk is that she and Billy Ng solicited FWD’s agents to join AIA.  It was not the case put to Ms Cheuk either.

76.  To sum up, the Defendants produced no credible or reliable evidence of, or witnesses to, Ms Cheuk’s alleged solicitation of FWD agents, even though such solicitation supposedly went on for a sustained period and was witnessed by various persons: according to D3 Ricky Chow, he and D6 Joseph Ho kept hearing lots of news from March to May 2017 that Billy Ng and Ms Cheuk had been carrying out solicitation of agents and that this was witnessed by various agents, who complained about the matter to D5 Dick Li and Mr Chik.

D2.  Whether Ms Cheuk indicated that she planned to leave FWD

77.  In fact, not only was there no credible or reliable evidence of solicitation by Ms Cheuk, there was also no credible or reliable evidence to substantiate the Defendants’ claim that Ms Cheuk indicated that she was planning to leave FWD.  I find that she did not give any such indication.

78.  Of the Defendants’ witnesses, only D5 Dick Li gave evidence in his statement that Ms Cheuk intended to leave FWD.  He claimed that he heard from Billy Ng and Ms Cheuk “since about March 2017” that they were planning to leave FWD to join another insurance company.  But when D5 Dick Li was cross-examined as to whether there were any words or actions on Ms Cheuk’s part that showed that she would leave FWD, all he could say, after hesitation, was that he “was aware” that Ms Cheuk would leave.  It is difficult to see how he acquired this “awareness”:

78.1  he did not ask Ms Cheuk directly about the matter – even though he said he wanted Ms Cheuk to stay and was satisfied with her work performance, he did not speak to her to find out whether she really wanted to leave, or to try to retain her;

78.2  he accepted that Billy Ng did not directly tell him that Ms Cheuk would leave.  To be fair, he then claimed that it was something mentioned in discussions in which he and one or more of D6 Joseph Ho, D3 Ricky Chow, Mr Chik, and Billy Ng participated in at different times – but without pinpointing any particular discussion.  However, he then said that Billy Ng had at an early stage said that everyone in the team would leave together with him, but that later on this topic was no longer discussed;

78.3  he acknowledged that at a later stage, he had heard that Billy Ng had said that Ms Cheuk did not want to leave FWD and was staying.  (This was also Billy Ng’s evidence in his statement and oral testimony, which I accept.)

79.  I accept Ms Cheuk’s evidence that she had never said to D5 Dick Li that she would leave FWD.  As she explained in cross-examination, she seldom talked to or interacted with him – she was an independent worker, and he “regrettably” did not carry out his duties of teaching and managing the agents downline from him – and D5 Dick Li did not refute her evidence about their lack of interaction when he came to give evidence.

80.  D3 Ricky Chow in his witness statement did say that there were signs of Billy Ng intending to leave FWD, in that starting from March 2017, he failed to turn up for weekly meetings with him, Mr Chik and D5 Dick Li, and that he failed to attend an annual award presentation ceremony in March 2017.  He also referred to his meeting with Billy Ng at the Harbourside on 28th April 2017, at which Billy Ng said that he would leave. (Billy Ng says that he told D3 Ricky Chow at this meeting that Ms Cheuk did not want to leave and would stay with FWD, which I accept.)  However, in his oral testimony, D3 Ricky Chow claimed that Ms Cheuk also did not turn up for work starting from March 2017, and that she also failed to attend the award ceremony.  These were not matters put to Ms Cheuk (not surprisingly, as none of the witnesses had hitherto suggested them), so she did not have the opportunity to give evidence that she did attend.  She tried to later cross-examine D6 Joseph Ho about her presence at the award ceremony but he said he could not remember.  She also cross-examined D5 Dick Li about her presence at work, and he confirmed that she did attend work regularly from March to May 2017.

81.  D6 Joseph Ho in his witness statement also did not suggest that Ms Cheuk had indicated any plan to leave FWD.  He mentioned that D3 Ricky Chow had reported that Billy Ng was thinking of leaving, but not Ms Cheuk.

82.  The Defendants say that Ms Cheuk that she did not expressly tell people in FWD that she would not leave.  But, as Ms Cheuk put to D5 Dick Li, what was she supposed to do? She turned up for work regularly and continued to perform her duties to D5 Dick Li’s satisfaction. She had never announced that she was leaving, so there was no announcement to the contrary to be made.  Although D5 Dick Li now claims that he thought and knew that Ms Cheuk was going to leave, he never approached her about this, so she could not have known that he needed to be disabused of any misconception.  In these circumstances, Ms Cheuk can hardly be criticised for not taking steps to reassure her colleagues that she was staying at FWD. In any event, such a lack of action cannot amount to a positive indication of an intention to leave FWD.

D3.  The real reason why Ms Cheuk’s IAA was terminated

83.  It will be recalled that Billy Ng gave notice of termination of his IAA on 5th May 2017, which was a Friday.  The Termination Form was signed and submitted by D5 Dick Li on 5th May 2017.  The Termination Letter addressed to Ms Cheuk was dated 8th May 2017, which was a Monday.

84.  The witness statements of D5 Dick Li, D3 Ricky Chow and D6 Joseph Ho all sought to portray the chronology of the decision to terminate Ms Cheuk’s IAA as being a case of Billy Ng submitting his notice of termination, the personnel of FWD then starting to worry about leakage of confidential information by Ms Cheuk, D5 Dick Li then deciding to recommend the termination of Ms Cheuk, D3 Ricky Chow then considering and endorsing the recommendation and making a further recommendation to D6 Joseph Ho, and finally D6 Joseph Ho approving the termination of Ms Cheuk’s IAA.  This version of events unraveled in cross-examination.

85.  Of these three witnesses, D3 Ricky Chow gave evidence first. He said that he was on leave and away from Hong Kong from 4th May 2017 to 7th May 2017, and not in the office from 8th to 10th May 2017.  It was therefore not possible for the three witnesses to have met in person to confer about Ms Cheuk’s case prior to D5 Dick Li’s signing of the Termination Form, or the issue of the Termination Letter.  Notwithstanding this, he sought to maintain that the decision to terminate Ms Cheuk’s IAA was one considered and taken only after Billy Ng’s notice of termination was received.  He said that “we” received the Termination Form from D5 Dick Li on 5th May 2017 and then FWD decided to exercise its contractual right to terminate Ms Cheuk’s IAA.

86.  It was only afterwards that he said that he did not see the Termination Form, and he referred obliquely to certain “risk management measures” having been put in place such that if a notice of termination was received from a certain regional director, then there would be an immediate execution (of what, he did not say).  He originally referred to such risk management measures as though they were some sort of generally applicable procedure.  After being asked for clarification a few times, eventually it became clear that what he was really saying was that in the present case, measures had been put in place such that if a notice of termination was received from Billy Ng, then FWD would proceed to terminate Ms Cheuk’s IAA without further ado.  He said that D5 Dick Li should have put “internal recruitment” (of agents) as the reason for termination on the Termination Form.  Later on, he said that the reason why Billy Ng’s notice of termination factored into his decision to terminate Ms Cheuk’s IAA was his view that Ms Cheuk would ask her clients to terminate their policies with FWD and start new ones at AIA.  Pausing here, I would note that no basis for thinking that Ms Cheuk would act in breach of her duties under the IAA to maintain confidentiality, or to act in the best interests of her clients, was ever identified by any of the witnesses.

87.  D6 Joseph Ho claimed that upon the giving of notice by Billy Ng, he called a meeting in his office, attended by D3 Ricky Chow and D5 Dick Li, to discuss how to handle the situation.  He said that D5 Dick Li recommended the termination of Ms Cheuk and that D3 Ricky Chow agreed with this.  Even when it was pointed out to him that D3 Ricky Chow was away at the time, he sought to explain this by saying that the meeting did not take place right away after Billy Ng’s resignation.  When he was asked directly whether the recommendation of the termination could have happened before Billy Ng resigned, he said “definitely not” and proceeded to explain why he was so sure that this was the case.  It was only after the chronology was gone through again that D6 Joseph Ho said that there had been previous discussions and a decision that if Billy Ng resigned, Ms Cheuk’s IAA would be terminated.  He said that the rationale for this was the solicitation which Ms Cheuk had already carried out.

88.  D5 Dick Li, who was the last witness to give evidence, admitted that the decision to terminate Ms Cheuk’s IAA in the event of Billy Ng tendering his own notice of terminate was a pre-ordained decision, but he claimed that he did not make the decision himself – he merely signed the Termination Form given to him by D3 Ricky Chow.  He did then acknowledge that he made the recommendation for the termination.  He also took part in the discussions about the termination.

89.  In closing submissions, Mr Chan submitted that it was indeed the case that FWD’s management (but not D5 Dick Li) had reached a consensus, prior to Billy Ng’s notice of termination, that they would terminate Ms Cheuk’s IAA in the event that he gave notice but she did not.^[8]

90.  I find that the real reason why Ms Cheuk’s IAA was terminated was not because she had engaged in solicitation of agents, or indicated that she was going to leave FWD, but because FWD’s management, together with D5 Dick Li, had pre-determined that in the event that Billy Ng gave notice to terminate his IAA, Ms Cheuk’s IAA would also be terminated.  Insofar as the rationale for this decision was based on a perception that Ms Cheuk had carried out solicitation of FWD agents or a view that Ms Cheuk would ask her clients to terminate their policies with FWD and start new ones with AIA, I find that there was no factual basis to support such views.

D4.  Involvement of the 2nd and 4th Defendants in the termination

91.  D2 David Wong’s evidence was that as Chief Executive Officer of FWD, he was not involved in the recruitment and termination of agents.  He said that he was not involved in Ms Cheuk’s IAA at all.  I accept his evidence.  Ms Cheuk had sued him as D5 Dick Li had told her that the decision to terminate her IAA had been made by D2 David Wong.

92.  D4 Yvonne Poon’s evidence was that she had been asked by her supervisor D3 Ricky Chow to sign the Termination Letter on his behalf as he was on leave.  She said that she was not involved in the termination of Ms Cheuk’s IAA.  I accept her evidence.  Ms Cheuk had sued her as she had signed the Termination Letter.  It will also be recalled that initially, Ms Cheuk was unable to ascertain the reasons for the termination of her IAA.

E.  WHETHER THE IAA CONTAINED THE IMPLIED TERMS CONTENDED FOR

E1.  The relevant principles

93.  As held by the Court of Final Appeal in Kensland Realty Ltd v Whale View Investment Ltd & another (2001) 4 HKCFAR 381 at [23] and [59], the following conditions must be satisfied in order for a term to be implied into a contract (citing Lord Simon’s summary in BP Refinery (Westernpoint) Pty Ltd v Shire of Hastings (1977) 180 CLR 266:

93.1  it must be reasonable and equitable;

93.2  it must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it;

93.3  it must be so obvious that “it goes without saying”;

93.4  it must be capable of clear expression; and

93.5  it must not contradict any express term of the contract.

94.  In Marks and Spencer plc v BNP Paribas Securities Trust Co (Jersey) Ltd and another [2016] AC 742, Lord Neuberger added six comments to Lord Simon’s summary, as follows.

94.1  The implication of a term was not critically dependent on proof of an actual intention of the parties when negotiating the contract.  The question is what notional reasonable people, in the position of the parties at the time at which they were contracting, would have intended.

94.2  A term should not be implied into a detailed commercial contract merely because it appears fair or merely because one considers that the parties would have agreed it if it had been suggested to them.  Those are necessary but not sufficient grounds for including a term.

94.3  It is questionable whether the requirement of reasonableness and equitableness will add anything: if a term satisfies the other requirements, it is hard to think that it would not be reasonable and equitable.

94.4  Although Lord Simon’s five requirements are otherwise cumulative, business necessity and obviousness (the second and third requirements) can be alternatives in the sense that only one of them needs to be satisfied, although in practice it would be a rare case where only one is satisfied.

94.5  If one approaches the issue by reference to the officious bystander, it is vital to formulate the question to be posed by him with the utmost care.

94.6  Necessity for business efficacy involves a value judgment.  The test is not one of absolute necessity.  A more helpful way of putting the requirement may be that a term can only be implied if, without the term, the contract would lack commercial or practical coherence.

95.  In Nazir Ali v Petroleum Company of Trinidad and Tobago [2017] UKPC 2, Lord Hughes (with whom Lord Neuberger, Lord Clarke and Lord Carnwath agreed), after referring to Marks and Spencer plc, observed as follows.

“… It is enough to reiterate that the process of implying a term into the contract must not become the re-writing of the contract in a way which the court believes to be reasonable, or which the court prefers to the agreement which the parties have negotiated.  A term is to be implied only if it is necessary to make the contract work, and this it may be if (i) it is so obvious that it goes without saying (and the parties, although they did not, ex hypothesi, apply their minds to the point, would have rounded on the notional officious bystander to say, and with one voice, “Oh, of course”) and/or (ii) it is necessary to give the contract business efficacy.  Usually the outcome of either approach will be the same.  The concept of necessity must not be watered down.  Necessity is not established by showing that the contract would be improved by the addition.  The fairness or equity of a suggested implied term is an essential but not a sufficient pre-condition for inclusion.  And if there is an express term in the contract which is inconsistent with the proposed implied term, the latter cannot, by definition, meet these tests, since the parties have demonstrated that it is not their agreement. ”

96.  It is not enough that an implied term complies with the reasonable expectations of the parties: Marks and Spencer plc at [23] (Lord Neuberger).

97.  The construction of express terms and implication of implied terms involve different techniques.  Although the overall exercise is an iterative one, in most cases it is appropriate to start from the construction of the express terms by reference to the context and surrounding circumstances known to the parties.

E2.  Whether implied terms in the present case

98.  Clause 7 of the IAA is headed “Term and Termination”. Clause 7.2 of the IAA sets out the circumstances in which the IAA may be terminated by FWD, and without notice or liability to the agent.  Such circumstances include fraud, a material breach of the IAA, bankruptcy or incompetence of the agent.

99.  Clause 7.3 of the IAA provides that it may be terminated by either FWD or the agent giving to the other not less than six days’ prior written notice.  The clause appears on its face to be unrestricted in its application; all that is required is the giving of notice.

100.  The Defendants referred to the reference in the Offer Letter to amounts being clawed back if the IAA was terminated “for any reason”.  I do not agree that this conferred on FWD any right to terminate the IAA “for any reason”.  What was being conferred on FWD was the right to claw back payments made in the event of termination of the IAA, without limitation as to what the reason for the termination may have been.

101.  The implied terms contended for in the present case are very broadly expressed.  It cannot be said that either of them is necessary or obvious to give business efficacy to the IAA.  The clause enables either party to an IAA to terminate the relationship without having to justify the same to the other party.  This is a right which either FWD or an agent may seek to exercise – as Billy Ng did in the present case, pursuant to the terms of his IAA.

102.  Of course, it may be the case that the negative impact of the clause is greater for an individual agent than FWD, in that upon termination, the agent may have to repay amounts subject to a (separate) agreed clawback provision, but it does not follow that it is necessary to imply a term that an IAA can only be terminated for valid or rational reasons.  In any event, the implication of the terms contended for would not prevent such a negative impact from arising – if, for example, FWD had valid and rational business reasons to downsize and terminate the IAA of an agent, thus triggering the requirement to pay back amounts due under an agreed clawback provision, the existence of the implied terms would not prevent such a clawback.

103.  Furthermore, the implied terms contended for are contrary to the express terms of the IAA, namely, cl.7.3, which does not require there to be any reason for either party’s exercise of the right thereunder.  This may be contrasted with termination under cl.7.2, pursuant to which one of the specified reasons must be present before the right of termination can be exercised.

104.  Counsel have cited a number of other cases in the context of agreements between insurance companies and their agents where it has been held that similar termination clauses entitled termination without justification, such as Shek Kin Pong and others v FTLife Insurance Company [2019] HKCFI 1781 at [48] (Mimmie Chan J) or Cheung Li On v Sun Life Hong Kong Limited [2021] HKCFI 3784 at [115] (Au-Yeung J).^[9] This is akin to the right to terminate a contract of employment unreasonably or capriciously so long as it is exercised in accordance with the contract: see Lam Siu Wai v Equal Opportunities Commission [2021] 5 HKLRD 30 at [29] (Anthony Chan J), citing Malloch v Aberdeen Corp [1971] 1 WLR 1578 and Johnson v Unisys Ltd [2003] 1 AC 518.  I would, however, note that each case turns on its on facts – cases such as Shek Kin Pong and Cheung Li On did not involve argument on the basis that termination was carried out for a bad reason.

105.  I do however note that the Court of Appeal has recognised one situation in which a term may be implied to restrict the circumstances in which the right of termination may be exercised.  In Tadjudin Sunny v Bank of America, unreported, CACV 12/2015, 20th May 2016 (Kwan and Barma JJA, Chow J, as Kwan JA and Chow J then were), the court referred to the principle that an apparently unqualified power or discretion given to a party to a contract should generally be construed as being subject to some implied restrictions regarding the exercise of that power or discretion, and held at [64] to [66] that there should be implied into the employment contract in that case a term that the employer’s power of termination could not be exercised in order to avoid the employee being eligible under the employer’s performance incentive program.

106.  Similarly:

106.1  in Union of Shop, Distributive and Allied Workers and others v Tesco Stores Ltd [2025] ICR 107 (“USDAW”), the Supreme Court held that the employment contracts in that case contained an implied term that the employer was precluded from exercising its contractual right of dismissal by notice for the purpose of removing or diminishing the employees’ rights to receive permanent retained pay.  The circumstances of that case were that dismissal would have denied the employees the very benefit which they had been promised would be paid permanently; and

106.2  in Bank of New Zealand v The Christian Church Community Trust [2024] NZCA 645  at [132], the New Zealand Court of Appeal noted that there may be cases where the purpose for which a termination clause may be exercised is qualified by an express term, or by a term implied in fact in circumstances where termination would defeat or undermine the purpose of a contract by denying the very benefit promised under it (although the court then went on to hold that it was not arguable in that case that there was any such implied term).

107.  However, in the present case, it is not Ms Cheuk’s pleaded case that there was an implied term preventing termination of the IAA for the purpose of undermining her contractual entitlements or triggering the agreed clawback provisions; nor was it her case on the facts that this was the purpose of the termination.

108.  I have considered whether it could be said, following on from Tadjudin Sunny, that there should be an implied term that the power to terminate the IAA under cl.7.3 would not be exercised arbitrarily where the effect (even if not the purpose) is to trigger the agreed clawback provisions, thus depriving Ms Cheuk of her Signing Fee, Monthly Bonuses and Performance Bonus.  After all, the factual matrix in which the IAA was made was that (as D6 Joseph Ho explained) these items of remuneration were over and above an agent’s regular compensation and paid to incentivise an agent to stay with FWD for five to ten years, bring in business and build a lasting team of agents.  Termination before the end of the clawback period would have foreseeable financial consequences: FWD would gain by being able to claw back advances made, whilst reaping continuing benefit from the policies already sold, and team already built, by the departing agent; in contrast, the agent would lose by having to pay back advances, and at the same time losing the downline team from which he derived a share of his commission income.  These items of remuneration could arguably be said to be illusory if the agent could be deprived of them for arbitrary reasons, even if the agent had met all his contractual performance targets and was not guilty of any fault. 

109.  However, it still would not follow that an implied term against arbitrary termination is necessary or obvious.  Ms Cheuk would have been aware of the provisions of cl.7.3 in the IAA and the clawback provisions in the Offer Letter requiring clawback in the event of termination for any reason.  She would have been in a position to assess the risks of this arrangement and to decide whether to accept or reject it.

110.  In any event, it is not Ms Cheuk’s pleaded case that the terms to be implied into the IAA include the effect of triggering the clawback provisions (as part of the implied terms).

111.  Furthermore, and as addressed below, a finding of an implied term (whether as pleaded or otherwise) would not advance Ms Cheuk’s claim overall, as she would still not be able to establish the loss and damage claimed.

F.  WHETHER BREACH OF THE IAA

112.  Given that the IAA did not contain implied terms contended for, it follows that the Defendants were not in breach of the IAA as alleged.

113.  I would further make this observation.  As a simple point of contract law, the individual Defendants (the 2nd to 6th Defendants) could not in any event have been liable for breach of the IAA, as they were not parties thereto.  It is regrettable that the then legal representatives of Ms Cheuk saw fit to plead and persist in such a claim. Even when the Defence for D5 Dick Li pointed this out, the legal representatives of Ms Cheuk denied on her behalf that this was so, and sought to add, through an amendment to the Reply, an assertion that D5 Dick Li was liable for procuring the wrongful termination of the IAA.  However, and despite subsequent amendments to the Statement of Claim by Ms Cheuk’s legal representatives, no such cause of action was ever added.

G.  LOSS AND DAMAGE

114.  Even if some form of term could be implied into the IAA, this would in any event not have enabled Ms Cheuk to obtain the damages claimed in the SOC.

115.  The claim for damages arising from breach of contract pleaded by Ms Cheuk’s lawyers on her behalf sought damages for (1) the loss of the Credit Balance of $116,507.71, and (2) the Performance Bonus of $1,304,608 which Ms Cheuk could have expected to receive after twenty-four months.

116.  The Credit Balance was lost as FWD set this off against the amounts which it claimed under the clawback provisions. In the SOC, there was no plea as to what would have happened had there been no breach as alleged.  It was not said, for example, that the IAA would have continued until the sixtieth month so that there could have been no clawback by FWD and hence no set-off of the Credit Balance.

117.  Furthermore, in the events which have happened, Ms Cheuk joined AIA on 2nd June 2017.  She has not suggested that any credit should be given for the amounts earned from AIA which would not have been earned but for the alleged breach of contract.

118.  As regards the Performance Bonus, Appendix 2 to the Offer Letter provided that if Ms Cheuk achieved a production credit of $3,624,749 by the 24th validation month, she would be entitled to a Performance Bonus of $1,304,648.^[10]  The evidence was that by the end of April 2017, Ms Cheuk had achieved a production credit of $2,298,199.58. This equated to an average monthly production credit of $104,463.62.  In order for Ms Cheuk to have reached the necessary production credit of $2,298,199.58 by the end of June 2017, she would have had to achieve a further $1,326,549.42 production credit in the space of two months, which equates to an average of $663,274.71 per month – some six times the amount of her average monthly production credit.

119.  Whilst Ms Cheuk said that she would have “brushed up” her production credit before the milestone date of the 24th month, I accept Mr Ho’s submission that there is no basis to infer that Ms Cheuk could have achieved this.  In particular, Mr Ho pointed to the fact that two-thirds of Ms Cheuk’s production credit came from her downline agents and that those agents might not have shared the same milestone date as Ms Cheuk (as she frankly accepted), so that they might not have had the same incentive to do any “brushing up”, and the fact that Ms Cheuk could not point to any substantial policies which she had been about to conclude at the time of the termination of her IAA.

H.  THE CLAIM UNDER THE SEX DISCRIMINATION ORDINANCE

120.  Ms Cheuk’s pleaded case is that her marital status and/or her family status, or status as the wife of Billy Ng, was the sole reason, or one of the reasons, for the Defendants’ decision to terminate the IAA.  It is said that the Defendants’ acts were unlawful under the SDO and FSDO.  In this section, I first deal with the claim under the SDO.

H1.  The relevant provisions of the SDO and the applicable principles

121.  The relevant provisions of the SDO are as follows.

2.  Interpretation

…

marital status (婚姻狀況) means the state or condition of being –

(a)  single;

(b)  married;

(c)  married but living separately and apart from one’s spouse;

(d)  divorced; or

(e)  widowed;

…

4.  Act done because of sex, etc. and for other reason

If –

(a)  an act is done for 2 or more reasons; and

(b)  one of the reasons is—

(i)   a person’s sex;

(ii)  a person’s marital status;

(iii) a woman’s pregnancy; or

(iv) that a woman is breastfeeding,

whether or not it is the dominant or a substantial reason,

then, for the purpose of this Ordinance, the act shall be taken to be done for the reason specified in paragraph (b).

…

7.  Discrimination against married, etc. persons

(1)  A person discriminates against a person of either sex in any circumstances relevant for the purposes of any provision of Part 3 or 4 if –

(a)  on the ground of his or her marital status (the relevant marital status) he treats that person less favourably than he treats or would treat a person of the same sex with a different marital status; or

…

10.  Comparison of cases under sections 5(1), 7(1) and 8

A comparison of the cases of persons –

(a)  of different sex under section 5(1);

(b)  of different marital status under section 7(1);

(c)  who are pregnant and not pregnant under section 8,

shall be such that the relevant circumstances in the one case are the same, or not materially different, in the other.

…

46.  Liability of employers and principals

(1)  Anything done by a person in the course of his employment shall be treated for the purposes of this Ordinance as done by his employer as well as by him, whether or not it was done with the employer’s knowledge or approval.

(2)  Anything done by a person as agent for another person with the authority (whether express or implied, and whether precedent or subsequent) of that other person shall be treated for the purposes of this Ordinance as done by that other person as well as by him.

(3)  In proceedings brought under this Ordinance against any person in respect of an act alleged to have been done by an employee of his it shall be a defence for that person to prove that he took such steps as were reasonably practicable to prevent the employee from doing that act, or from doing in the course of his employment acts of that description.

…

122.  In Leung Kwok Hung (Long Hair) v Commissioner of Correctional Services (2020) 23 HKCFAR 456, Ma CJ (with whom the other members of the court agreed) set out a four-step approach to considering whether discrimination under s.5(1)(a) SDO (on the grounds of sex) was established.  Mr Ho submitted, and I accept, that given the similarity between s.5(1)(a) and s.7(1)(a), a similar test should be adopted in considering whether discrimination under s.7(1)(a) has been established. In other words, in order to establish discrimination on the grounds of marital status under s.7(1)(a):

122.1  there must be a difference in treatment between the complainant and another person of the same sex, real or hypothetical, with a different marital status (“the comparator”);

122.2  the relevant circumstances between the complainant and the comparator are the same or at least not materially different;

122.3  it must then be shown that the treatment given to the complainant is less favourable than that given to the comparator;

122.4  the difference in treatment is on the basis of marital status.

123.  It is necessary to identify a suitable comparator, and then compare how the defendant would have treated such a comparator.  The burden lies on a plaintiff to prove on the balance of probabilities that the defendant treated him or her less favourably than how he would have treated a person of a different marital status.  See Ma Bik Yung v Ko Chuen [2000] 1 HKLRD 514 at 522B-F (Mayo VP), in the context of the Disability Discrimination Ordinance (Cap.487).^[11]

124.  Whilst the comparator should be somebody who has a different marital status to that of the complainant, it is important that the circumstances between the two persons are otherwise the same or not materially different.  See M v Secretary for Justice [2009] 2 HKLRD 298 at [45] to [50], where Tang VP cited Gleeson CJ’s description in Purvis v State of New South Wales (2003) 217 CLR 92 of the appropriate comparator in determining whether a pupil with a disability causing violent behaviour had suffered discrimination:

“… The required comparison is with a pupil without the disability; not a pupil without the violence. …”

125.  The appropriate comparator in a case of alleged discrimination on the grounds of marital status will therefore usually be someone in a relationship akin to marriage but who is not actually married: cf. Hawkins v Atex Group [2012] ICR 1315 at [9] (Underhill J, sitting as President of the Employment Appeal Tribunal).^[12]

126.  In Hawkins, Underhill J went on at [10] to say that the paradigm case of discrimination was where a woman was dismissed or otherwise less favourably treated simply because she was married.  He then considered a more complex case at [11]:

“A rather less straightforward case is where the reason for the treatment in question comprises both the fact that the complainant is married and the identity of her husband – that is, where she is (say) dismissed not simply because she is married but because of who she is married to. On ordinary principles such a case will fall within section 3 because the fact that she is married is an essential part of the ground of the employer’s action, even though the identity of her husband is an additional element. But it is important to appreciate that this will not be so in every case where a woman suffers less favourable treatment because of her relationship to her husband. It is essential that the fact that they are married is part of the ground for the employer’s action. As Ms Sen Gupta succinctly put it, it is important to get the emphasis in the right place: the question is not whether the complainant suffered the treatment in question because she was married to a particular man, but whether she suffered it because she was married to that man. Some subtleties are involved here. In many, perhaps most, cases of this kind the ground for the employer’s action will not be the fact that the complainant and her husband are married but simply the closeness of their relationship and the problems to which that is perceived to give rise: applying the other half of the “two-part test” (see para 7(1) above), a common law wife would have been treated in the same way. The employer may in giving his reasons for the conduct complained of have referred to the fact that the two of them are married, or have used the language of husband and wife, but if that merely reflects the fact that in their particular case the close relationship takes the form of marriage, and he would have treated her the same if they were common law spouses, then section 3 will not apply. Deciding whether the fact that the complainant is married – rather than simply that she is in a close relationship with the man in question – is the ground of the employer’s action (in either of the ways identified in para 7(2) above) will often be easy enough; but sometimes it may be more difficult. There will certainly be some cases where the reason is indeed “marriage-specific”: one example is Chief Constable of the Bedfordshire Constabulary v Graham [2002] IRLR 239, which I consider at para 18 below.”

127.  What this analysis highlights is the importance of identifying whether the difference in treatment complained of is attributable to the fact of the marital status, or the identity of the spouse.  The UK anti-discrimination legislation is targeted at the former, not the latter.  This is the case for the SDO as well, as can be seen from the wording of ss.4, 7 and 10.

H2.  Wong Lai Wan Avril v Prudential Assurance Co Ltd

128.  Counsel have rightly cited Wong Lai Wan Avril v Prudential Assurance Co Ltd [2010] 5 HKLRD 39 (HH Judge HC Wong), a case in which an insurance agent claimed that the termination of her agency agreement on the grounds of being the wife of H, her direct supervisor, amounted to discrimination on the grounds of marital status and family status.  HH Judge HC Wong declined to strike out the claim, noting that the application rested entirely on the defendant’s answer to a request for further and better particulars to the effect that the agency of an unmarried person who was the de facto spouse of H would also have been terminated, and holding that the case should go to trial so that the plaintiff would be able to supply the grounds and details of evidence in support of her case and the defendant would be given an opportunity to offer an explanation (see [40], [67] to [69]).  This was therefore not a case in which it was necessary to come to a concluded view as to the construction of provisions in the SDO.

129.  Having said that, the learned Judge did make the following observations, which might be said to support Ms Cheuk’s claim of discrimination in the present case.

129.1  In B v Ontario (Human Rights Commission) [2002] 3 SCR 403,^[13] the Supreme Court of Canada adopted a broad meaning of “marital status” and “family status” to encompass circumstances where discrimination results from the particular identity of the complainant’s spouse.  That approach resembled that of the Court of Final Appeal in Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4 in giving a generous interpretation to the provisions in Chapter III of the Basic Law which dealt with constitutionally guaranteed rights and freedoms.  (See [54], [58].)

129.2  It was misleading to say that just because the Hong Kong legislation failed to adopt the equivalent of ss.39(1)(b) and (c) of the New South Wales Anti-Discrimination Act 1977 (“the NSW Act)^[14] in the SDO, the legislative intention was that persons coming within these two groups should be excluded from protection.  The Hong Kong legislation was based on the UK SDA 1975, where “marital status” was not specifically defined.  The exclusion of the three groups of persons under s.39(1)(a) to (c) of the NSW Act tended to support the argument that individuals were not required to fall into one of the three groups to succeed in proving discrimination.  (See [53], [61].)

129.3  The Australian Administrative Decisions Tribunal in Liseo v Canterbury City Council [1999] NSW ADT 118 adopted a different interpretation of “marital status”, when it accepted that “marital status” discrimination apply to not merely to “marital status” as a concept but also to the “marital status” of a particular person (in other words, the identity of the spouse). (See [44], [62].)

129.4  Since de facto spouses were not protected in the same way that married persons were under the legislation, a de facto spouse would not be a suitable comparator.  (See [45], [64].)

130.  On the point about the approach to interpretation:

130.1  I bear in mind that the legislation should be interpreted with a purposive approach so that its objects can be achieved: Tsang v Cathay Pacific Airways Ltd [2002] 2 HKLRD 677 at [23] to [26] (Mayo VP);

130.2  whilst the SDO should of course be interpreted as far as possible to conform with the Basic Law (see in particular article 25) and the Hong Kong Bill of Rights (see in particular article 22), this does not mean that it should be interpreted otherwise than in accordance with its plain meaning: cf. M v Secretary for Justice at [57] (Tang VP).

131.  On the point about the scope of discrimination on the grounds of marital status under Australian legislation:

131.1  in Liseo, the question of whether discrimination on the grounds of marital status under the Australian NSW Act extended to discrimination on the grounds of the identity of a complainant’s spouse was not in issue, as it was simply conceded by the respondents that it did so extend.  See Liseo at [7];

131.2  three other Australian authorities were considered in Wong Wai Lan Avril (see [28] and [34]).  Their approach to the interpretation of “marital status” in the context of anti-discrimination legislation similar to that in the SDA 1975 and the SDO was similar to that in Hawkins.

131.2.1  In Boehringer Ingelheim Pty Ltd v Reddrop [1984] 2 NSWLR 13, the New South Wales Court of Appeal considered s.39 of the NSW Act.  It held that s.39(1)(a) did not extend to proscribe discrimination based upon the identity of a person’s spouse. Maloney JA held (at 21A) that:

“The definition of “marital status” in s 4(1) refers to “the status or condition of being” married. That definition does not refer to, eg, the characteristics or proclivities of the particular spouse and I do not think that this paragraph intended to remove these from the area of considerations to which an employer might legitimately refer. I do not think the paragraph would prevent an employer refusing to engage as a live-in cook a man who was co-habiting with Typhoid Mary.”

131.2.2  This interpretation of s.39(1)(a) was re-affirmed by the New South Wales Court of Appeal in Waterhouse v Bell (1991) 25 NSWLR 99.

131.2.3  In Re Mount Isa Mines Ltd [1997] 1 Qd R 249, the Supreme Court of Brisbane considered ss.4 and 7 of the Anti-Discrimination Act 1991 (“the Queensland Act”).^[15]  Shepherdson J held (at 258 line 29) that:

“In the present case the definition of “marital status” in the Act focuses on the fact that a particular employee is married or is a de facto spouse.  The definition does not extend beyond the limits of the person being married or a person being a de facto spouse.  The definition does not permit consideration of whether the person to whom that employee is married or who is the de facto spouse of that employee is a person employed by ISA.”

132.  It is true that in contrast, in the Canadian case of B, the Supreme Court of Canada held that discrimination on the grounds of “marital status” and “family status”^[16] in the Ontario Human Rights Code (“the Ontario Code”) should be interpreted to include discrimination based on the identity of a spouse or family member.  However, the Ontario Code is quite different from the SDO.

132.1  Section 5 of the Ontario Code provides that every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, record of offences, marital status, family status or handicap.^[17]

132.2  Under ss.7(1) and 10 SDO, discrimination on the grounds of marital status is established by showing that the complainant has been less favourably treated than a person of the same sex with a different marital status, where the circumstances of the two cases are the same or not materially different.  There is no such requirement under the Ontario Code.

132.3  The Ontario Code provides a defence for employers who grant or withhold employment or advancement in employment to a person who is the spouse, child or parent of the employer or an employee.  This exception, allowing employers to discriminate in certain circumstances which relate to the identity of the employee’s spouse or family member, reinforced the court’s view that the legislative intention was to include not just absolute, but also relative,^[18] marital or family status complaints within the scope of s.5(1) of the Ontario Code: see [41].

133.  In relation to the point that the SDO did not adopt the equivalent of ss.39(1)(b) and (c) of the NSW Act, whilst a claimant under the SDO would therefore not have to show that he or she falls into one of the three groups as identified in s.39(1) of the NSW Act in order to prove discrimination, a claimant under the SDO would still need to show that he or she suffered discrimination on the grounds of marital status, so that one comes back to the question of what this means.

134.  On the point about the appropriateness of using a de facto spouse as a comparator in considering whether discrimination on the basis of marital status has been established, I agree with the submission of Mr Chan that a de facto spouse is an appropriate comparator in the present case, having regard to the observations of Tang VP in M and Underhill J in Hawkins cited above.  The SDO requires a comparison to be made between a complainant and a comparator in the same, or not materially different, circumstances.  This is so that other variables may be eliminated and the focus placed on whether the proscribed characteristic (in this case, marital status) is truly the reason for the difference of treatment.

135.  I therefore do not consider that Wong Lai Wan Avril detracts from the approach set out in section H1 above.

H3.  Application to the present case

136.  In the present case, the appropriate comparator in the present case would be a hypothetical female:

136.1  in a close relationship to Billy Ng similar to that between Ms Cheuk and Billy Ng, for example, a cohabitation relationship with two children; and

136.2  working as an insurance agent of FWD with similar qualifications, experience and performance abilities, and a team of ninety-odd downline agents.

137.  The comparator would not be someone who had engaged in solicitation of fellow agents, or who had given any indication that she would leave FWD.  She would, however, be the romantic partner of Billy Ng, a prominent regional director of FWD who had openly expressed his dissatisfaction with FWD, his intention to leave, and his desire to take his team with him (but who had also indicated that his partner would not be leaving), and who had, less than two years ago, helped to orchestrate a large-scale move of agents from Convoy to FWD, including the comparator herself.

138.  I cannot say that the comparator would have been treated any differently from Ms Cheuk.  I have rejected the evidence of the Defendants that Ms Cheuk’s IAA was terminated because she engaged in solicitation of agents or had indicated that she would leave FWD.  However, it does not follow that the termination came about because she was married. Considering all the evidence, it is apparent that the termination occurred not because Ms Cheuk was married, but because Billy Ng was the person to whom she was married.  Indeed, it is apparent that all along, what the Defendants cared about was whether Billy Ng would stay with FWD or go to a competitor.  FWD’s management had decided that if he stayed, then his negative comments and actions would be forgiven, and Ms Cheuk could also stay.  If he left, then Ms Cheuk’s agency would also be terminated. Whatever one may think of the morality of such a decision, or the way in which FWD has sought to justify it after the event, it is not a decision that amounts to discrimination on the grounds of marital status under the SDO.

I.  THE CLAIM UNDER THE FAMILY STATUS DISCRIMINATION ORDINANCE

139.  As mentioned above, Ms Cheuk’s pleaded case relies on the same set of facts for the claim under the FSDO.

140.  The relevant provisions of the FSDO are as follows.

2.  Interpretation

…

family status (家庭崗位), in relation to a person, means the status of having responsibility for the care of an immediate family member;

…

immediate family member (直系家庭成員), in relation to a person, means a person who is related to the person by blood, marriage, adoption or affinity;

…

4.  Act done for 2 or more reasons

If an act is done for 2 or more reasons and one of the reasons is the family status of a person (whether or not it is the dominant or a substantial reason for doing the act), then for the purposes of this Ordinance, the act shall be taken to be done for the reason of the person’s family status.

…

5.  Discrimination against a person who has family status

A person discriminates against a person who has family status in any circumstances relevant for the purposes of any provision of this Ordinance if –

(a)  on the ground of the second-mentioned person’s family status or that person’s particular family status (the relevant family status) he treats that person less favourably than he treats or would treat another person who does not have family status or the relevant family status, as the case may be; or

…

34.  Liability of employers and principals

(1)  Anything done by a person in the course of his employment shall be treated for the purposes of this Ordinance as done by his employer as well as by him, whether or not it was done with the employer’s knowledge or approval.

(2)  Anything done by a person as agent for another person with the authority (whether express or implied, and whether precedent or subsequent) of that other person shall be treated for the purposes of this Ordinance as done by that other person as well as by him.

(3)  In proceedings brought under this Ordinance against any person in respect of an act alleged to have been done by an employee of his it shall be a defence for that person to prove that he took such steps as were reasonably practicable to prevent the employee from doing that act, or from doing in the course of his employment acts of that description.

…

141.  Counsel have not found any authority dealing with the interpretation of the FSDO.  (Whilst a claim under the FSDO was made in Wong Lai Wan Avril, the parties’ arguments were not specifically addressed in the judgment.)  Mr Ho referred to Hansard when the second reading of the bill took place on 24th June 1997, and the observations of various legislators.  However, the Secretary for Home Affairs did not make any observation which can as a matter of law assist as to the meaning of “family status” and its definition of “having responsibility for the care of an immediate family member”.

142.  Mr Ho submitted that as the UK SDA 1975 does not deal with family status discrimination, guidance could be sought from Australian authorities relating to s.4A(1) Sex Discrimination Act 1984 (Cth) which defined “family responsibilities” for the purpose of that act.  However, as the provisions prescribing discrimination in that statute are somewhat different from those under the FSDO, it is not clear that such authorities can provide much assistance in the interpretation of the FSDO.

143.  In the circumstances of the present case, it is not necessary to go into the details as to how to construe the FSDO.  It is plain that this claim cannot succeed.

143.1  In the SOC, it was pleaded on Ms Cheuk’s behalf that her “marital status and/or family status, namely her status as [Billy Ng’s] wife” was the reason (or a reason) for the Defendants’ decision to terminate her IAA.  No further particulars were pleaded as to what responsibility or care had to be undertaken by Ms Cheuk, and how this could be related to the Defendants’ decision to terminate Ms Cheuk’s IAA.

143.2  In cross-examination, Ms Cheuk agreed that Billy Ng was fit and working in May 2017 and did not need any assistance with his daily living needs.

143.3  It is apparent from all the evidence that the termination of Ms Cheuk’s IAA had nothing to do with whether she had the responsibility for caring for her husband.

J.  FWD’S COUNTERCLAIM

144.  As indicated above, FWD counterclaims $4,070,682.30, being the Signing Fee, Monthly Bonuses and Incentive Payments received by Ms Cheuk, giving credit for the Credit Balance.

145.  FWD relies on:

145.1  cl. 7.7 of the IAA, which provided that upon its termination, FWD would not be obliged to pay any commission or other remuneration to Ms Cheuk;

145.2  the clawback clauses in the Offer Letter, which provided that the Signing Fee and Monthly Bonuses would be repayable in full should Ms Cheuk’s IAA be terminated within twenty-four months from the date of the IAA;

145.3  rule 5 of the “Give Me Five” Sales Incentive Scheme, which provided that if an agent’s IAA was terminated for whatever reason on or before 30th April 2018, the agent would have to repay the Incentive Payments received;

145.4  cl.7.10.1 of the IAA, which provided that upon its termination, Ms Cheuk’s indebtedness to FWD would be set off against any credit balance in Ms Cheuk’s commission account.

146.  Ms Cheuk’s pleaded defence to FWD’s counterclaim was that FWD had unlawfully terminated her IAA.  Given my findings above, there is no defence to the counterclaim.

147.  FWD claims pre-judgment interest in respect of the Signing Fee and Monthly Bonuses (but not the Incentive Payments) from 8th May 2017 to the date of judgment at 3% over the best lending rate of the Hong Kong and Shanghai Banking Corporation Limited pursuant to the terms of the Offer Letter.  There is no basis to dispute this contractual rate.  However as regards the date from which interest should run, the demand was made by letter of 31st May 2017, so that pursuant to the terms of the Offer Letter, interest should only run from 15th June 2017.  As the Offer Letter does not apply to the Incentive Payments, a pre-judgment rate of 1% over the best lending rate of the Hong Kong and Shanghai Banking Corporation Limited will apply, to run for the same period.

148.  FWD further claims indemnity costs in respect of its counterclaim pursuant to cl.3 of the IAA.  This does not apply to the costs of defending Ms Cheuk’s claim.

K.  DISPOSITION

149.  Ms Cheuk’s claim is dismissed.

150.  I give judgment to FWD on its counterclaim for $4,070,682.30, with pre-judgment interest at the rate of 3% over the best lending rate of the Hong Kong and Shanghai Banking Corporation Limited in respect of the Signing Fee and Monthly Bonuses and at 1% over the best lending rate of the Hong Kong and Shanghai Banking Corporation Limited in respect of the Incentive Payments, from 15th June 2017 to the date of judgment, and at judgment rate thereafter.

151.  I further make a costs order nisi that the costs of and occasioned by the action are to be paid by Ms Cheuk to the Defendants, to be taxed if not agreed, with the costs of FWD’s counterclaim to be on an indemnity basis.

152.  I cannot conclude this judgment without a few final observations.  Ms Cheuk conducted the trial diligently, and with commendable courtesy and moderation, notwithstanding the emotional and financial distress which the termination of the IAA has caused her.  The sudden and summary termination left her with (a) termination of her income source at short notice, (b) a demand for clawback of a substantial amount, (c) abrupt notifications to clients about her departure, and (d) allegations that she engaged in improper conduct.  One can well understand her frustration, and indeed question the ethics of the termination, but these matters do not, unfortunately from Ms Cheuk’s point of view, constitute a claim for which legal redress can be given.  However, insofar as the factual allegations against her are concerned, these can be put to rest.