MAIN SHINE DEVELOPMENT LTD. v. CHAN KAI TONG

LT App No. 11/94

IN THE SUPREME COURT OF HONG KONG

 HIGH COURT

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J U D G M E N T

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1. This is an appeal from an Order of the Labour Tribunal. The appellant as claimant in the Tribunal sought payment from the defendant/respondent of $4030, representing wages in lieu of notice, less $739 and $450 for annual leave pay and diligence bonus respectively. After deduction of these sums, totalling $1189, the claim therefore amounted to $2841. The defendant counterclaimed for one month's wages in lieu of notice.

2. After brief discussion between the parties and the Presiding Officer, and without evidence being heard, the following Order was made:

"1. By consent, judgment for defendant in sum of $1189, being annual leave pay due and diligence bonus for July 93 in full and final settlement of his counterclaim and in extinction of any counterclaim for one month's wages in lieu of notice by defendant against the claimant company;

2. Claim for one month's wages in lieu of notice by Claimant Company is dismissed for no valid cause of action disclosed;"

3. Under paragraphs 3 and 4 of the Order, there was no order as to costs and a 7-day stay of execution was granted.

4. Prior to making the Order the Presiding Officer, as he is entitled, investigated the posibility of settlement. According to the notes of proceedings, the defendant indicated that he wanted his annual leave pay and diligence bonus, however he would not pursue his claim for wages in lieu of notice if the claimant in turn withdrew its claim. The defendant's entitlement to leave pay and bonus had of course been conceded by the claimant as a deduction from its own claim.

5. The notes of proceedings disclose that the claimant's representative then told the court that he would consider withdrawal if the court would tell him why he should do so. The notes then read:

"Court: On the face of it, the claimant company has no valid claim for one month's wages in lieu of notice because it was not a lawful order. Claimant entitled to treat it as repudiation."

6. Thereupon it is recorded that the claimant's representative said he understood, and would settle on the basis that the defendant would not counterclaim for one month's wages in lieu of notice. The Order then followed.

7. The Grounds of Appeal, as amended, are threefold and postulate errors in law by the Presiding Officer. Firstly, in advising the claimant's representative, before hearing evidence on the merits, that he should consent to a settlement with judgment for the defendant and the claimant's claim being dismissed; secondly, in telling the claimant's representative that should he not consent he (the Presiding Officer) would rule at the end of the hearing that judgment be entered for the defendant, with the claim dismissed. Thirdly, in telling the claimant's representative that should the claimant company disagree with the settlement after learning of the consent judgement the company would be entitled to apply for a rehearing.

8. In support, the appellant filed an affirmation of Mr. Au Bo Wong who had been its representative at the hearing. This affirmation, purporting to set out in greater detail what happened before the Presiding Officer, was argued by Mr. Chow for the respondent to be inadmissible. He adduced the inability of this Court on appeal to receive further evidence. I do not accept this argument. The affirmation does not contain evidence going to the merits of the issue; it seeks to elaborate the notes of proceedings. It has apparently been served on the Presiding Officer when leave to appeal was sought and obtained; it has also been served on the respondent. Neither of them has objected to the accuracy of its contents. I have no hesitation in considering Mr. Au's affirmation in deciding this matter.

9. The origin of the dispute was the refusal of the defendant, a security guard with the claimant company, to move his workplace to a different building from that where he was originally employed. At this second building the management contract was with a different company - a fact which was apparently material in the defendant's refusal to relocate. According to Mr. Au's affirmation, the Presiding Officer said that the action would turn on this factor plus a provision in the Employment Ordinance that an employee not wishing to relocate could resign immediately without paying salary in lieu of notice.

10. Mr. Au continues that the Presiding Officer then said that if he did not settle, he (the Presiding Officer) would adjourn the case for hearing, which would be before himself and would still result in judgment for the defendant based on the factors mentioned. Mr. Au then deposes - "upon hearing this I formed the impression that the claim should be settled." There is more, but that is the crux of the matter.

11. Mr. Chow for the respondent argues that as this is a consent judgment it should not be put in issue on appeal. It may only be set aside by a fresh action. I have no doubt that this is the general rule, but the very issue here is whether or not the judgment is a true consent judgment. The unopposed affirmation of Mr. Au discloses what amounts to judicial pressure on the claimant to reach a settlement. The notes of proceedings also show the Presiding Officer reaching a conclusion without hearing evidence, which conclusion then formed the basis of encouraging the claimant to settle. I have no doubt whatsoever that the Presiding Officer adopted this course with the best of intentions; he saw what he thought was the answer and brought the case to a quick conclusion. The fact remains that there was pressure and that this was not therefore a true consent judgment.

12. The appellant has sought relief for errors in law by the Presiding Officer. This is not of course the basis on which I have reached my decision. The procedure adopted has been inherently incorrect and this court on appeal will grant relief. That relief may lie in equity in declaring null an apparent contract reached under pressure. It may also lie in the court's inherent power to grant relief from procedural impropriety in the court below. Either way the result is the same; the judgment is set aside and the case is remitted to the Labour Tribunal with directions for a new hearing before a different Presiding Officer. In the circumstances there will be no order as to costs of the appeal.

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