ARCHER, HAROLD DEAN v. THE HONG KONG CHANNEL LTD.

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1997, No. 155
(Civil)

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J U D G M E N T

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Nazareth, V.-P. (giving the decision of the Court):

1. This is an application for leave to appeal to the Court of Final Appeal from the judgment of this Court. It is helpful to give a very broad if somewhat simplistic resume of the facts, having regard to one of the features of this case.

2. The appellant conceived the idea of producing TV programmes, including advertisements, for hotels. The respondent company was set up to run such a businesses. The appellant was appointed the first managing director under a contract of employment signed on 6 July 1990. The company did not do well. Ultimately about five years later, the board of directors passed a resolution to determine his employment. That was on 17 June 1995. He was paid a month's salary in lieu of notice.

3. He then lodged a claim in the Labour Tribunal. This was transferred to the High Court. He claimed in respect of a number of items: undrawn salary, Chinese New Year bonuses, a month's salary in lieu of notice, 7 days annual leave and a severance or long service payment.

4. The respondent counter-claimed in respect of other items.

5. The claim and counter-claim came before Deputy Judge Longley in the High Court. In the judgment, which was noteworthy for the care with which he dealt with each of the claims, he accepted part of the claims of the appellant and also part of the counter-claim of the respondent. He awarded the appellant the difference which was about $82,350. The appellant appealed from that judgment to this Court in respect of several of the items of his claims that had been dismissed.

6. All his grounds were rejected by this Court save one which was an entirely new ground raised for the first time before us. He was given that indulgence, and in the event that particular ground was accepted. It related to the payment for 7 days untaken leave, and in respect of that $9,230 was agreed by the parties and was awarded to him.

7. He now seeks leave from this Court to appeal to the Court of Final Appeal. In his application for leave, which he has made in Form B from the Schedule to the Court of Final Appeal Rules, his first ground of appeal is that the deputy judge in the High Court and the Court of Appeal "wrongly stated that the appellant's employment terminated on 17 June 1995 for the purposes of Part VB of the Employment Ordinance (Cap. 57) and in that both courts failed to apply correctly or at all s.31R and paragraph (b) of the definition of 'relevant date' in s.2 of Cap. 57."

8. His point arises out of the following facts. He had claimed severance pay, alternatively long service payment. What was addressed by the Deputy Judge and what was pursued before us was a claim for long service pay. This, it was common ground, was attracted by service of not less than five years. The question accordingly arose before Judge Longley of when his service, which the judge found had commenced with his contract of employment signed on 6 July 1990, terminated. If it, in fact terminated on 17 June, it would be less than five years service, which would have been completed on 6 July 1995. What the appellant appeared to have contended before Deputy Judge Longley was this. In the first place, he suggested that he had in fact been employed before his contract of service was signed. That was rejected by the judge. He then contended that as the resolution of the board of directors was passed on 17 June but he apparently did not receive the payment until after the weekend, the 17th being a Saturday, his employment should have expired a few days later. Nothing turns upon that because even if his employment did expire on 20 June, that would have been well under five years. But that was the basis upon which the matter was argued before this Court, as a question of fact as to when it started, when it was terminated and when the payment was received by him. It is true that he contended that his employment should have ended on 17 July. But no reference was made to a provision that has a decisive bearing upon the point. This has now been raised for the first time in his notice of application for leave to appeal. He expressly refers to the definition of "relevant date" in s.2 of Cap. 57. That definition clearly applies in the following way under s.31R which is the relevant provision, and provides in paragraph (2) that:

"... where an employee who has been employed under a continuous contract for not less than 5 years of service at the relevant date ...

(a) is dismissed and his employer is not liable to pay him a severance payment by reason thereof;

...

the employer shall, subject to this Part ... pay to the employee a long service payment calculated in accordance with s.31V(2) ...."

9. Clearly the five year period should be calculated by reference to the relevant date. The definition of "relevant date" in s.2 is:

"(b) where an employee's contract of employment is terminated by payment in lieu of notice in accordance with section 7, the date up to which such wages are calculated;"

10. It is clear by reference to s.7, that the payment in lieu of notice must be an amount equal to the wages for the notice period which was one month. Therefore the period of employment would end not on 17 June, on which day the payment was made, but on 17 July. This would have meant that the period of five years from 6 July 1990 would have completed. However, as we say, that point was never relied upon or made to this Court. The rejection of the appeal on the point of a long service payment, including the length of the appellant's service, was made on the submissions made by both sides, which turned entirely on fact without any reference to the definition of "relevant date".

11. We now have to turn to the provision under which the appellant seeks leave to appeal to the Court of Final Appeal, i.e. s. 22 of the Court of Final Appeal Ordinance:

"(1) An appeal shall lie to the [Court of Final Appeal] in any civil cause or matter-

(a) as of right, from any final judgment of the Court of Appeal, where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more, or where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more;".

We are told by Mr John Wright, who appears for the appellant before us but who did not appear previously, that the amount involved in this first ground would be either $50,000 or $75,000 depending on when some amendment took effect. So, clearly the appellant has no right to appeal under paragraph (a).

12. We turn to paragraph (b) which says that [an appeal shall lie]:

"(b) at the discretion of the Court of Appeal or the [CFA], from any other judgment of the Court of Appeal, whether final or interlocutory, if, in the opinion of the Court of Appeal or the [CFA], as the case may be, the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court for decision."

What has happened here is that a provision of the Employment Ordinance that is perfectly clear, and that no one suggests causes any difficulty in its interpretation or application, was not relied upon and in consequence overlooked by everyone, by the parties, by the Court of First Instance, by the Court of Appeal, by counsel. Its application or construction in no way can be said to be a question of great general or public importance. Had the case not been transferred by the Labour Tribunal, it is doubtful whether that specialist tribunal would have missed the provision.

13. It then comes to whether it "otherwise ought to be submitted to the [CFA] for decision". We have given careful consideration to this point. Such authority as has been drawn to our attention suggests that a question should be so submitted only if it is exceptional or presents an unusual feature (see Hui Shiu-wing v. Cheung Yuk-lin [1968] HKLR 176). It does not seem to us that the question is exceptional or unusual in any significant way. That the prosecution of a claim upon a deficient legal basis, or that the failure to rely upon the proper legal provision, principle or authority, or that such is overlooked or missed by all concerned, should be good reason for granting leave to appeal to the Court of Final Appeal is questionable to say the least, and has implications that are clearly of concern. It does not seem to us it would be appropriate for us to grant leave.

14. While for my part I confess that such a conclusion causes me some disquiet, it is to a degree allayed by the knowledge that the Court of Final Appeal itself can grant leave. We think the matter of leave to appeal in the particular circumstances would be best resolved there.

15. Turning then to the third ground, this is stated in the following terms:

"The learned Deputy Judge in the Court of First Instance erred in finding for the Respondent upon its counterclaim for repayment of housing allowance and Chinese New Year bonus, in ruling that the audited annual statements of accounts, in which the Appellant relied as contemporary evidence of his entitlements, had not been approved by the Board of Directors by reason that there were no recorded minutes of Director's meetings, failing to take into account:

A that it would be unlawful for a company's auditor to submit accounts information not in accordance with company records.

B. the requirement in S. 129C(2) Cap. 32 of the Companies Ordinance that 'any accounts so annexed shall be approved by the Board of Directors before the balance sheet is signed on their behalf.'

C. the audited Annual Statement of Accounts were signed by two of only three directors on the Board, thus de facto constituting a Board approval, with or without recorded minutes."

The point simply here is this. Before the judge the question was whether the additional housing allowance that had been paid to the appellant and also certain Chinese New Year bonuses that were paid to the appellant had been approved or authorised by the board of directors. The background was that the appellant as managing director ran the company. The judge looked at all the evidence and he was not satisfied that the payments had not been authorised. He preferred the evidence that was led by the respondent. All this was clearly a matter of fact. This Court looked at it in that way. We regarded it as a finding of fact with which no good reason to interfere had been shown. It is true that the appellant pointed to the accounts and claimed that the payments were approved and authorised by inclusion in the accounts.

16. Before us, Mr Wright has also pointed to this being the approach of commercial law to which company law is allied. He submitted in that way that regard should be had to company statements and audited accounts. That is as may be. We see no reason why the judge should not have decided the matter in the factual way he did, having regard to all the evidence including the accounts etc. No authority has been produced to warrant the contrary. In any case we do not think there is any question of great general or public importance, or that there is some other good reason why leave should be given. Besides the amount or value in question here would not have exceeded $375,000.

17. In those circumstances we are not persuaded that leave should be granted. We refuse leave to appeal.

Liu, J.A.:

18. Speaking for myself, it is not a question of having overlooked any point of law. The appellant chose to confine himself to facts for "Long Service Payment", on which the issue was narrowly addressed by the appellant and counsel for the respondent before this court. On the same claim, it was similarly addressed by the plaintiff/appellant before the Deputy Judge.