LAM SIN YI SINDY v. LEUNG KING WAI WILLIAM t/a WILLIAM K W LEUNG & CO

CAMP 184/2020

[2021] HKCA 720

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 184 OF 2020

(ON AN INTENDED APPEAL FROM HCME NO 4 OF 2019)

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J U D G M E N T

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Hon Kwan VP (giving the Judgment of the Court):

1.  This is an application of the defendant employer (“the Employer”) for leave to appeal against the judgment of Mimmie Chan J on 29 September 2020 (“Judgment”)[1].

2.  The leave application was made pursuant to section 33 of the Minor Employment Claims Adjudication Board Ordinance, Cap 453[2].  Section 33(2) provides that the Court of Appeal may grant leave to appeal “if it is satisfied that a question of law of general public importance is involved”.

3.  The judge had previously granted leave to the claimant employee (“the Employee”) to appeal against the decision of the adjudicating officer of the Minor Employment Claims Adjudication Board (“the Board”) of 4 November 2019 on a question of law, pursuant to section 31[3].  By the Board’s decision, it was held that the Employer had not summarily dismissed the Employee but on the contrary it was the Employee who had resigned without giving notice of seven days as required under the employment contract. Hence, the Employer was entitled to deduct seven days’ wages of $4,316.67 and the Employee’s claim of the said sum was dismissed.

4.  The question of law formulated by the judge for which leave to appeal was given was as follows:

“Whether, in determining the facts and construing whether the words and actions of the Employee constituted resignation, the Board should have considered the entire context and circumstances of the dialogue between the Employer and the Employee, and not merely the literal meaning of the words used.”

5.  The appeal scheduled before the judge in September 2020 was disposed of on paper. The Employee’s counsel, Mr Jeff Yau, referred the court to a line of authorities[4] in support of these propositions of law:

(1)  A person’s intentions are ordinarily ascertained not by reference to his subjective intentions but objectively, by reference to how a reasonable man would interpret them.

(2)  There must be clear and unequivocal conduct and words which evince an intention of a party to treat the contract as terminated, for a finding to be made that that party has treated the contract as irrevocably discharged.

(3)  Recognition is given to “special circumstances” in the field of employment, in that personalities constitute an important consideration in labour relations.  Examples of “special circumstances” are where words or actions are expressed in anger or in the heat of the moment, or where a person is under extreme pressure and being jostled into a decision.  Where “special circumstances” arise and the words and conduct of an employee evincing an intention to resign are not unambiguous, it may not be reasonable for the employer to accept the employee’s words and conduct forthwith at face value without further inquiry or the lapse of a reasonable period of time.  In so acting, the employer runs the risk that the intention to resign was not the correct interpretation when the facts are judged objectively in the entire context.

6.  The Employer’s counsel, Mr Kenneth Lam, did not dissent from the above propositions of law.  The judge held that the Employee’s words and conduct were ambiguous in all the circumstances and, objectively considered, could not properly and reasonably be construed by the Employer as resignation.  She held that the findings of the Board that the Employee had resigned were made under an error in the interpretation and application of the law[5].

7.  There was no dispute before the judge that the Board’s decision should be set aside[6]. The only dispute was whether (as submitted by the Employer)the matter should be remitted to the Board for further directions and/or reconsideration, with costs of the appeal to be reserved to the Board, or whether (as submitted by the Employee)the matter should be decided by the court on the facts and evidence already presented to the Board and applying the relevant legal principles.

8.  The judge agreed with the Employee and held that it was not necessary to remit the matter to the Board for reconsideration.  On the facts and evidence presented to the Board[7], she held that the only reasonable and legitimate conclusion is that there was no unambiguous resignation by the Employee and there was no effective acceptance of any repudiation of contract by the Employer.  Instead, by requiring the Employee to leave, she was effectively dismissed[8].  The judge referred to sections 32(1) and (2), which empower the court to allow the appeal, and to draw any inference of fact. She held that by allowing the appeal, the court only reversed “the erroneous finding on law made by the Board, that the Employee had resigned”, and there is no finding of primary fact made by the Board that is reversed[9]. She therefore allowed the appeal under section 32(1)(a) and ordered that the Employer should repay to the Employee the sum of $4,316.67 wrongly deducted from her wages[10].

The application for leave to appeal

9.  The relevant provisions in section 32 read as follows:

“(1)  On an appeal for which it has granted leave under section 31, the Court of First Instance may –

(a)  allow the appeal;

(b)  dismiss the appeal; or

(c)  remit the matter to the Board with such directions as it may think fit, which may include a direction to the Board for a new hearing.

(2)  On an appeal for which it has granted leave under section 31, the Court of First Instance may –

(a)  draw any inference of fact; and

(b)  make such order as to costs and expenses as it may think fit,

but may not –

(i)  reverse or vary any determination made by the Board on questions of fact; or

(ii)  receive further evidence.”

10.  In the summons issued by the Employer on 5 October 2020 for leave to appeal against the Judgment, the question of law said to be of general public importance for the purpose of section 33(2) is formulated as follows:

“Whether a determination on the issue of ‘resignation’ was a determination on a question of fact or a determination on a question of law for the purpose of Section 32(2)(i) of the Minor Employment Claims Adjudication Board Ordinance (Cap 453).”

11.  The following grounds of appeal were advanced in the draft notice of appeal annexed to the summons:

(1)  The judge erred in law by reversing the Board’s determination on a question of fact, namely, that the Employee resigned and was not dismissed.  This was directly contrary to section 32(2)(i) and rendered the Judgment ultra vires.

(2)  Whether the Employee did or did not resign was a question of fact, not of law.

(3)  The judge should have remitted the matter to the Board, as originally proposed by the judge and agreed to by the Employer. Factual findings should be left to the Board as intended by section 32(2)(i).

12.  This application is misconceived and leave to appeal should not be granted.

13.  It is not correct to say that a determination on the issue of ‘resignation’ in the present situation is a determination on a question of fact.  I emphasise “in the present situation”.  The determination upon which the Board dismissed the Employee’s claim is not simply whether the Employee did or did not resign.  The findings of the Board comprised not just the factual elements of the words and conduct of the Employee, but also the underlying factual matrix, and the common understanding between the parties.  The legal effect of what should follow from the factual elements is a material part of the findings.  Thus, the finding that the Employee ‘resigned’ without giving notice of seven days as required under the contract of employment would be repudiatory conduct on her part; and the finding that there was effective acceptance of the repudiation by the Employer would bring about the termination of the contract.  The determination of the Board in this situation should be characterized as a question of mixed law and fact (Wong Yin Fong & Ors v ISS Hong Kong Services Ltd [2005] 2 HKLRD 648 at §62).

14.  The judge gave leave to appeal on the question of law formulated in the manner as mentioned above and found that the Board had made an error of law in construing the Employee’s words and conduct as a resignation in that the Board had failed to have regard to the entire context and circumstances of the messages exchanged between the Employer and the Employee and not merely the literal meaning of the words used in the exchanges.  The Employer has not contended that there was no error in law. As mentioned earlier, there was no dispute that the Board’s decision should be set aside, nor is there any suggestion that the court may not set aside the decision of the Board in allowing the appeal. 

15.  Having set aside the decision of the Board, whether the matter should be remitted to the Board for reconsideration with a direction to the Board to make proper findings free from the legal errors as identified by the court, or whether the court should proceed to reach its own conclusion as to what the findings of the Board require in law would depend on the circumstances of the case.

16.  In the present situation, the judge noted that all the facts and evidence had been presented to the Board at the hearing.  She did not think further investigation is required[11]. Importantly, she took the view that in the light of all the evidence, “the only reasonable and legitimate conclusion” is that there was no unambiguous resignation by the Employee, and, applying the legal principles she had identified, the Employer could not assume there was a resignation and his purported acceptance of repudiation was ineffective[12].  The judge was clearly entitled to decline to remit the case to the Board in this situation and to substitute her own conclusion.  (Chok Kin Ming v Equal Opportunities Commission [2017] 2 HKLRD 521 at §§60 to 70; Perfekta Enterprises Ltd v Commissioner of Inland Revenue [2018] HKCA 301 at §§28 to 30[13])

17.  Given that no further investigation or amplification of the facts is required, there is no justification to remit the matter to the Board. If it were contended by the Employer that the Board should allow further evidence to be adduced upon the remission, it would be most unfair to the Employee to give the Employer the opportunity of making good the evidential void created by himself on the first occasion and to have a second bite of the cherry. (Kingston v British Railways Board [1984] IRLR 146 at §57)

18.  In my view, on a proper construction of section 32(2), in light of the power conferred on the court under section 32(2)(a) to “draw any inference of fact”, the prohibition in section 32(2)(i) not to “reverse or vary any determination made by the Board on questions of fact” should only apply to interfering with a primary finding of fact, and does not apply to a finding of secondary fact or the drawing of an inference by the Board.  The latter situation is where the Board has determined the factual incidents or elements and then proceeds to the second stage which involves deciding whether all the primary facts as found taken together would lead to an inference or conclusion to be drawn.  This is an exercise which calls for a judgmental conclusion and the weighing up of various factors, some pointing one way and some the other. (Todd v Adams [2002] CLC 1050 at 1064H to 1065H, §§60 to 64) What the court is not permitted to do under section 32(2)(i) is to interfere with the primary findings of fact when it reviews the exercise at the second stage.  Where the Board has misdirected itself in law, as the judge had found in this instance, the court is permitted to reverse or vary the finding of secondary fact or the inference drawn by the Board where the court is satisfied that the conclusion or inference is one that the Board could not properly have reached if it had directed itself properly on the law.

19.  There is no contravention of section 32(2)(i) in this instance. The judge did not reverse any findings of primary fact of the Board.  Nor did she draw any inference at variance with any findings of primary fact of the Board. (Lee Tim v Chow Suk Ching (t/a Wang Chong Co) [1997] 1 HKC 470 at 475; Chok Kin Ming v Equal Opportunities Commission at §68)

20.  Furthermore, in two instances where similar questions have been raised in this context, the Court of Appeal had decided that such questions do not constitute questions of law of “general public importance” and declined to grant leave to appeal. (Sun Min v Hong Kong Ming Wah Shipping Co Ltd, CACV 37/2004, 17 October 2005, §§9, 11; Kelly v Cathay Pacific Airways Ltd [2007] 4 HKLRD 881 at §§17(2), 30, 31).  The Court of Appeal also declined to exercise its discretion to grant leave to appeal, even if a question of law of general public importance could be identified, noting that there was disparity in the resources of the parties, possible hardship to the other party and that employment disputes involving small sums should be disposed of speedily and inexpensively. (Sun Min v Hong Kong Ming Wah Shipping Co Ltd, §23; Kelly v Cathay Pacific Airways Ltd, §39)

21.  I see no reason to take a different view.

22.  This application for leave to appeal should never have been brought.  The summons is dismissed.  As no costs have been incurred by the Employee, there will be no order as to costs.