FAN KIN NANG v. PROVIEW INTERNATIONAL HOLDINGS LTD

HCLA72/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO.72 OF 2004

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO.11085/2003)

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J U D G M E N T

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1. I have before me an appeal brought by Proview International Holdings Limited against a decision of the Labour Tribunal in favour of Fan Kin Nang whereby the Labour Tribunal refused an application by the Proview International Holdings Limited for a transfer to the District Court of the claim brought by Mr Fan against Proview International Holdings Limited in the Labour Tribunal.  For ease of convenience I would hereinafter refer to Proview International Holdings Limited as “the employer” and Fan King Nang as “the employee”.

2. The employer is a public company.  The employee was the company secretary of the employer.  As part of the duties of the employee it was required for the company secretary, the employee to arrange, supervise and organise the appropriate notification of the audited accounts to the Stock Exchange, the public and for the production of the annual report for distribution to the shareholders.

3. All these were supposed to happen towards the end of October 2003.  Something went very wrong which caused, on 3 November 2003, the employer to summarily dismiss the employee and this summary dismissal resulted in the claim made by the employee against the employer in the Labour Tribunal.  The amount of the claim was small: it is under a hundred thousand dollars.  The defence to the claim by the employer was that they were entitled to summarily dismiss the employee by reason of the actions or omissions of the employee during the few days at the end of October.  I think it is not in dispute that the deadline of dispatching the printed annual report to the shareholders was not met.  Whether this was due to the fault or the negligence of the employee is very much the subject matter which had to be resolved.

4. What had caused the complication resulted in this matter being brought before this court is that the employer had brought proceedings in the District Court claiming various reliefs all relating to information contained or alleged to be kept by the employee in the computer and stored in the personal computer of the employee.  During the relevant period in October 2003, a large number of documents had been created by the employee including very important faxes and e-mails.  The employer claimed the return of these confidential information, injunction restraining the employee from taking them away.

5. There was a counterclaim brought by the employee against that District Court claim.  It consists of an allegation that the employer was in breach of his obligation of various implied terms under the employment contract which had resulted in the employee not only being sacked but not being able to obtain alternative employment as consequence of the various allegations made by the employer and the way the employee was dismissed.  The amount of the counterclaim was close to a million dollars.

6. The principal two grounds which had been relied upon by the employer before this court complaining that the Labour Tribunal erred in law in refusing the transfer to the District Court are firstly, that there is an intimate connection between the two sets of proceedings and that the duplicity of proceedings should cause the Labour Tribunal to make the order of transfer and, secondly, that the dispute in the Labour Tribunal over the question of summary dismissal was of a sufficiently complex nature that it ought to be transferred, to be dealt with by the District Court together with the other complex issues already in District Court. 

7. It seems to me that there is substance in both of these contentions.  I would take the first matter of duplicity of proceedings or commonality of the matters that had to be canvassed in the two sets of proceedings.  The key of course is a proper understanding of what were the obligations of the company, that is the employer, vis-a-vis its shareholders, vis-a-vis the Stock Exchange and by reference to the Stock Exchange rules, and, arising out of that, the scope of the duties of a company secretary in discharging the employer’s various duties to the Stock Exchange, to the public and to the shareholders.  Then followed the necessity to ascertain what happened during those vital days in late October and whether what happened amounted to breach of the duties of the employee and whether the breaches were of such nature as to justify the drastic remedy of summary dismissal.  Now, these aspects in some ways are intimately connected with what we had called in the course of the argument claim C that is the employer’s claim for the return of the documents and confidential information and claim D which was a substantial claim and which had drawn its complaint from the various strands of the employment relationship.

8. The whole coherent story of what really happened in October had to be examined and it seems to me that it would be unfortunate if only claim B in the Labour Tribunal that is the summary dismissal aspect was examined or was narrowly focused.  I think there is too much of overlapping in the overall story for it to be narrowly isolated to only the consideration of claim B by the Labour Tribunal.  The general law about the undesirability of concurrent proceedings or duplicity of issues and the risk of inconsistent findings is well-known.  It seems to me that the Labour Tribunal had not given sufficient weight to the considerable overlap of the two sets of proceedings. 

9. Turning to the second ground of appeal of complexity, it seems to me that it is quite clear that this is not the ordinary sort of case that the Labour Tribunal deals with.  It is perhaps not even the ordinary sort of case that the District Court generally deals with.  It is really a case much more suitable for the High Court.  I have been given to understand I do not have the jurisdiction to order both sets of proceedings to be transferred to the High Court.  In the absence of such power, it seems to me, the complexity of these two sets of proceedings really calls for the Labour Tribunal proceedings to be immediately transferred to the District Court.

10. I would like to add this.  Having lived with this matter now for some time and having heard extensive argument from both sides, it seems to me that the sooner the District Court can transfer the whole matter (both proceedings) to the High Court the better it is.  So the view I express is that, for the moment, the Labour Tribunal proceeding should be transferred to the District Court and, hopefully, that the parties could agree that both two sets of proceedings, that is the District Court proceeding as well as the transferred Labour Tribunal proceeding can be transferred to the High Court.  If no agreement for transfer can be made, then an application should be made to the District Court for an early determination by the District Court whether there should be a full transfer further to High Court.

11. In these circumstances, I allow the appeal of the employer.