CHENG KWOK CHUNG AND OTHERS v. TRI TECH CORPORATION LTD AND ANOTHER

HCLA 2/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 2 OF 2013

(ON APPEAL FROM LABOUR TRIBUNAL
CLAIM NO. 27 OF 2013)

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J U D G M E N T

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1. This is an application by the 1^st Defendant (“Tri Tech”) for leave to appeal against an order of the Labour Tribunal (“Tribunal”) made on 25 January 2013 under which Tri Tech has to pay a total sum of HK$103,430 by two instalments to the Claimants (“Order”).

2. The background of this case can be briefly stated.  Tri Tech was and is in the business of providing elderly care service.  It rented certain premises in Kowloon (“Premises”) with the intention of setting up an elderly home there after renovation.  A number of contractors were engaged for the purpose of the renovation.  One of the contractors was the 2^nd Defendant, who was to carry out electrical works at the Premises.  The Claimants were the 2^nd Defendant’s employees. 

3. The 2^nd Defendant ran into financial difficulties in the course of the renovation.  He was unable to complete the work and was eventually replaced by another contractor. 

4. A claim was made in the Tribunal by the Claimants against Tri Tech as principal contractor and the 2^nd Defendant as employer for outstanding wages and overtime pay.  In addition, they had a claim against the 2^nd Defendant for payment in lieu of termination notice.

5. The case did not proceed to a contested hearing at the Tribunal.  Instead, with the assistance of the Presiding Officer and Labour Department, the parties managed to come to a settlement agreement.  In broad terms, Tri Tech and the 2^nd Defendant respectively agreed to pay just over HK$100,000, to be paid by two instalments, to the Claimants to end the dispute.  Two settlement agreements were signed by the Claimants with, respectively, Tri Tech and the 2^nd Defendant.  The settlement was then embodied in the Order. 

6. Mr Wong, who appeared for Tri Tech, submitted that the settlement was entered into by Tri Tech based on an erroneous opinion expressed by the Presiding Officer in the course of the mediation leading to the settlement.  It was said that the Presiding Officer expressed the view that Tri Tech was the principal contractor and therefore had a liability to pay the Claimants.  In truth, however, Tri Tech was not and could not be a principal contractor. 

7. In fairness to the Presiding Officer, it has been stated in the Reasons for Decision that before the Order was made it was explained to the parties, inter alia, that any view expressed in the course of the mediation was only preliminary. 

8. There is a deficiency in this application in that there is no evidence to support what has been submitted by Mr Wong.  However, Mr Wong has undertaken on behalf of Tri Tech to file the necessary evidence in the event that this application succeeds.  I do not believe that I need to resolve this matter because, taking Mr Wong’s submissions at the highest, this application cannot succeed.

9. First and foremost, the Order merely embodies the settlement of the parties.  It is true to say that the Order also serves to facilitate the fulfilment of the settlement because the payments will be channelled through the Tribunal.  However, what underpins the Order is a binding contract between the parties and Mr Wong has fairly accepted that there is no justification for re-opening the same.  That being the case, I am unable to see any basis for challenging the Order.

10. I have been referred to the authority of Purcell v F C Trigell Ltd & Anr [1971] 1 QB 358, which supports that proposition that a consent order can be set aside.  I accept that.  However, it was said by Winn LJ at 365G that:

“It seems to me that, if a consent order is to be set aside, it can really only be set aside on grounds which would justify the setting aside of a contract entered into with knowledge of the material matters by legally competent persons, and I see no suggestion here that any matter that occurred would justify the setting aside or rectification of this order looked at as a contract.”

11. I agree with those observations. 

12. Mr Wong has drawn my attention to the following passage in the judgment of Denning MR at 363G to 364A:

“I think that a party, who gets leave, can appeal from a consent order on wider grounds, at any rate in interlocutory matters. He can appeal, for instance, on the ground of his own mistake: see Mullins v. Howell (1879) 11 Ch.D. 763, where Sir George Jessel M.R. said, at p. 766, ‘There is a larger discretion as to orders made on interlocutory applications than as to those which are final judgments.’”

13. With great respect to the Master of the Rolls, there is a tension between the above passage with the view taken by Buckley LJ at 366H to 367C to the effect that no distinction is to be drawn between a consent order made in interlocutory proceedings and a consent order made on a final judgment.  See also the judgment of Winn LJ at 365F.

14. In any event, the consent order before this court is not one made in interlocutory proceedings and the passage relied upon by Mr Wong does not assist Tri Tech.

15. Secondly, Tri Tech’s right to appeal against the Order is confined to issues of law.  I am unable to see how an erroneous view expressed by the Presiding Officer which was relied upon by one of the parties in entering a settlement can render the Order erroneous in point of law.  No such point of law has been formulated and advanced before this court.

16. For these reasons, this application is dismissed.