TSUI KAI YUEN AND ANOTHER v. YEUNG WONG YUK LAN ALICE AND ANOTHER

HEADNOTE

CONTRACT - employment - whether one of service or for services.

                The plaintiffs sued to recover "consultation fees" allegedly due from the second defendant. Defence alleged that first plaintiff was employee of second defendant. Second defendant alleged that first plaintiff had obtained an increase of salary by a fraudulent or innocent misrepresentation that he had obtained a professional qualification, and counterclaimed difference.

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JUDGMENT

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1. These proceedings began, on the 5th December 1984, as a straight forward claim by the first plaintiff ("Mr. Tsui") against the first defendant ("Madam Yeung") for $16,500 on a dishonoured cheque. On the 18th December 1984, Madam Yeung, then acting in person, filed a somewhat obscure Defence, suggesting, inter alia, that Mr. Tsui was acting as site agent for Guangdong Water Conservancy & Hydro-Power Engineering Development Co. Ltd ("G.W.H.") and that the cheque had been issued to Ka Yi Construction Co. ("Ka Yi") subject to a condition which had not been fulfilled.

2. On the 17th January 1985, Mr. Tsui's solicitors issued a summons seeking "summary judgment" under rule 28 of the District Court Civil Procedure (General) Rules. In his supporting affirmation, Mr. Tsui deposed to the fact that he was a partner of Ka Yi and that Ka Yi acted as site agent for the second defendant ("Vincy"), of which Madam Yeung was a partner. He also stated that Vincy owed Ka Yi $28,600 for consultation fees, and that the dishonoured cheque was given in part payment of that amount. In January 1985 Madam Yeung instructed solicitors to act for her. Shortly before the hearing of the summons for summary judgment, they issued a summons seeking leave to amend the defence and to join Vincy as the second defendant. Both summonses were heard on the 4th February 1985 and adjourned to the 18th February. In the meantime, Mr. Tsui's solicitors applied for leave to amend the particulars of claim to join Ka Yi as the second plaintiff, and to claim the balance of the consultation fee amounting to $28,600. Leave to amend was given to both parties on the 18th February 1985. The summons for summary judgment was dismissed on the 27th March 1985.

3. By their amended defence, the defendants alleged that Mr. Tsui was an employee of Vincy. By their counterclaim they eventually sought to recover $15,750, being the total amount of increases of salary paid to Mr. Tsui, between December 1983 and October 1984, which they alleged had been obtained as a result of fraudulent innocent misrepresentations by Mr. Tsui. No reply or defence to counterclaim was filed by either of the plaintiffs. On the 29th April 1985, they gave notice of their intention to act in person.

4. It was not until the trial began, on the 28th May 1985, that it was fully appreciated that part of Mr. Tsui's alleged claim might not be actionable in the District Court, because of the provisions of section 7 of the Labour Tribunal Ordinance (Cap. 25) which reads: -

The relevant provisions of the Schedule are the following:-

These provisions, which were described as a "statutory strait jacket" by Hunter J. in Panalpina (Hong Kong) Ltd. v. Ulrich Haldemann [1983] HKLR 275 at 277, have produced what I regard as a most unfortunate and somewhat ludicrous situation in this case.

5. On the face of the pleadings, the claims of both plaintiffs, as well as the counterclaim, were clearly within the jurisdiction of the District Court. But having head all the evidence, adduced at a trial lasting two full days, I am obliged to conclude that part of Mr. Tsui's claim is not actionable in the District Court, because it falls squarely within item 1 of the schedule to the Labour Tribunal Ordinance. In the result, although I have had to explore almost every respect of the relationship between the parties in depth, because of the matters raised by the defence and counterclaim, and have come to certain findings of fact on all material issues, I am precluded from giving judgment in a form which will dispose finally of all the issues. As the outstanding matters may fall to be considered by the Labour Tribunal at some future time, I consider that it would not be proper to indicate what my findings would have been on such matters. This is hardly satisfactory from the point of view of any of the parties, but I feel obliged to take this course by the rigidity of the Labour Tribunal Ordinance.  This unsatisfactory state of affairs could, in my view, have been avoided if section 7 of Cap. 25 had been amended to include a provision similar to that enacted in section 5(3) of the Small Claims Tribunal Ordinance (Cap. 338), which provides:-

"A claim within the jurisdiction of the tribunal may be brought in another court if there is included in such claim a claim for some other relief, redress or remedy, other than a claim for costs."

6. Although I am driven to this position by the rigid legislation, it is nevertheless right to say that Mr. Tsui must bear some responsibility for the outcome. When asked why he had not taken proceedings in the Labour Tribunal he answered:

If he was so advised, I feel bound to say that it was bad advice, because his claim could not be actionable in the District Court or the High Court until September 1985 (see section 9 of Cap. 25). As Mr. Tsui's former solicitors - a large and prominent firm -were not present at the trial, I can only assume that, during the 4 or 5 months they were acting for him, they did not have full instructions or access to several of the documents produced by Mr. Tsui at the trial!

7. I will now deal with the facts of the present case. Mr. Tsui is the holder of a number of qualifications. He is the holder of a B. Sc (C. Eng.), a member of the Institute of Structural Engineers, the Hong Kong institute of Engineers, and an Associate Member of the Institute of Civil Engineers. On the 26th September 1983 he began to work for Vincy as a "sub-agent'', pursuant to a letter (Exh. P1) dated the 16th September 1983, written on Vincy's notepaper, and signed by Peter Yeung, the other partner of Vincy and the husband of Madam Yeung, and one Alex Cheung, Project Manager. It is in the following terms :-

                "Dear Francis,

8. He worked with Vincy continuously from that date until the middle of September 1984, when his services and those of others were terminated by Vincy, consequent upon some dispute between Vincy and G.W.H. over a construction site at Lam Tin. In December 1983, Mr. Tsui formed a partnership (Ka Yi) with his brother, to carry out various activities relating to construction projects and interior decoration. After Ka Yi was formed, Mr. Tsui issued receipts for his "salary" from Vincy on receipts bearing the chop of Ka Yi, in which the payments were described as "consulting fees". These receipts constitute the only evidence to support the suggestion that Ka Yi, in the form of Mr. Tsui, was rendering professional services to Vincy for a fee. No letter of appointment was ever issued by Vincy to Ka Yi, to cancel or vary the "Confirmation of Employment" ( Exh. P.l), and all the other exhibits and evidence, point clearly, in my view, to Mr. Tsui being an employee of Vincy at all material times, whichever test is selected for distinguishing a contract of employment from a contract for services. (See also Exhibits P3. P5, P6 and D.1). It is clear from the general tenor of Mr. Tsui's evidence that, all along, he regarded himself as a salaried employee of Vincy, and I am satisfied that the receipts of Ka Yi were used merely for convenience and to derive some benefits in connexion with tax. His title of "Sub-Agent", later changed to "Site Agent" was merely descriptive of his job and, in no way, indicated that the relationship between Vincy and Mr. Tsui was that of principal and agent in the legal sense. Indeed, I am satisfied that there was no contractual relationship between Vincy and Ka Yi at any material time. Accordingly, the claims of the second plaintiff must be dismissed.

9. Mr. Yeung, who gave evidence for the defendants, testified that he agreed to increase Mr. Tsui's salary from HK$9,500 to HK$11,000 with effect frown the 1st December 1983 because Mr. Tsui had told him that he had become a Member of the Institute of Civil Engineers. Mr. Yeung gave contradictory evidence as to the date when this alleged representation was made. At first, he said it was early in December 1983, and at that time Mr. Tsui gave him a business card (Exh. D2), bearing the letters "MICE". When asked about an entry he made on Mr. Tsui's Employment Form (Exh.Dl), he said it was early in January 1984 that Mr. Tsui told him he had obtained membership. He further testified that he asked Mr. Tsui to show him his certificate on frequent occasions between February and September 1984, but was always put off by some excuse or explanation, such as it being lost in the post.

10. Mr. Tsui vehemently denied that he had ever made these representations. He admitted that he had Exh. D2 printed in January 1984, but explained that the letters "MICE" were put on by mistake. They should have been "AMICE" to indicate that he was only an associate member of the Institute. He kept these cards in his office, and always corrected the mistake before issuing them to others. He denied that he had given Exh. D2 to Mr. Yeung, who must have obtained it from the office. He had taken a few days' leave in November 1983 to sit for the examination for membership but the results would not be known until April 1984.

11. On this aspect of the case, I have no hesitation in preferring Mr. Tsui's evidence. He struck me as a hard-working, conscientious, and intellegent young man. However confident he may have been of success in the examination, I do not think that he would be so bold as to anticipate the result by telling anyone, in December 1983 or January 1984, that he was a member of the Institute. I find as a fact that he never made any such claim. I further find that his salary was increased because he had satisfactorily completed the probationary period of two months. Even assuming that he had made the representation alleged, it was not a material one.

12. Mr. Yeung, on the other hand, was in my view a wholly unreliable witness. He shifted his ground on several matters during the trial, and seemed prepared to give any answer which he thought would suit his case, without any regard to its inherent truth or probability. I am satisfied that his allegation of misrepresentation by Mr. Tsui was a wholly unjustified afterthought on his part. Although, at one point he alleged that he had stopped the cheque because Mr. Tsui did not produce his membership certificate, this was not mentioned in the original defence. Furthermore, it later transpired that he stopped the cheque for an entirely different reason.

13. Mr. Tsui contended that, in August 1984, Mr. Yeung agreed to increase his salary to $16,500. This was when he moved to another site at Lam Tin. Mr. Yeung denied that he agreed to a further increase, and somewhat vaguely hinted that he merely agreed to recommend that Mr. Tsui should be paid that sum, in the course of negotiations between Vincy and G.W.H. over who was to control the site, in the event that G.W.H. decided to take on Mr. Tsui as the site agent.

14. For the reasons I have given earlier, I do not propose to state my findings on this issue of fact. I would merely say that, in my view, there was full and valuable consideration for the cheque, which was not delivered subject to any other condition. I am not persuaded that the amount thereof was arrived at on the basis alleged in paragraph 12 of the amended defence and counterclaim. It does not even tally with the defendants' figures. Assuming that it was intended to cover arrears of salary at $11,000 per month, and leave pay, the amount of the cheque would have resulted in Vincy paying more than it claims was due to Mr. Tsui. I do not believe that Mr. Yeung was so generous an employer!

15. Accordingly, the counterclaim must be dismissed and Mr. Tsui is entitled to judgment on the dishonoured cheque.

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