LIU SAI LING v. MANNIS GARMENT FACTORY

1997, NO. SCT 2

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

SMALL CLAIMS TRIBUNAL APPEAL

(On Appeal from the Small Claim Tribunal

Claim No. SCTC 033674/96)

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J U D G M E N T

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1. This is an appeal against the decision of the Adjudicator of the Small Claims Tribunal declining jurisdiction upon the appellant's claim.

2. It is not disputed for the purpose of this appeal that the appellant started employment with the respondent in October 1992. His contract was terminated in March 1994. He lodged a claim in the Small Claims Tribunal in October 1996 abandoning any amount in excess of $15,000. The Adjudicator dismissed the claim and awarded costs in the sum of $200 on the ground that he had no jurisdiction to entertain the claim.

3. Counsel for the appellant submits that the Adjudicator was wrong to say that the claim was within the exclusive jurisdiction of the Labour Tribunal. That is not disputed. It is not correct to say that the appellant's claim can still be litigated in the Labour Tribunal in view of the one year time bar in s.9(1) of the Labour Tribunal Ordinance Cap 25. The Adjudicator might not have been aware of this. It is not clear this had been made clear to him.

4. The main submission of the appellant is that the Adjudicator was wrong to rely on s.9(3) and the Court of Appeal decision in Chan Cheung Fong v. Ng Wing Kwok [1988] HKC 215 to hold that the present claim should be in the District Court. Counsel for the appellant argues, and in fact this is accepted by Counsel for the respondent, that this issue turns on the interpretation of the relevant statutory provisions.

5. Both Counsel are admirably clear, succinct and helpful and I am indebted to them for their assistance. In my view the position is as follows.

6. The appellant claims for various items including differences of double-pay, arrears of bonus and other items. It is not disputed that the appellant's claim is a monetary claim and is founded in contract. As such, his claim falls within Clause 1 of the Schedule to the Small Claims Tribunal Ordinance, Cap 438. That Schedule excludes cases within the exclusive jurisdiction of the Labour Tribunal (see Clause 1(d)). One therefore goes to the Labour Tribunal Ordinance to see if the appellant's claim falls within the exclusive jurisdiction of the Labour Tribunal.

7. Section 7 of that Ordinance gives the Labour Tribunal exclusive jurisdiction to hear and determine cases falling within the Schedule to that Ordinance. It is clear that the subject claim is within that Schedule since it is a claim based on a breach of the terms of contract of employment. However, there is a time limit for lodging a claim in the Labour Tribunal. Section 9(1) provides that the Labour Tribunal "shall not have jurisdiction" if the cause of action arose more than twelve months before the date on which the claim is filed unless the parties agree that the Labour Tribunal shall have jurisdiction.

8. Section 9(3) goes on to provide as follows :

"Nothing in this section shall preclude the institution of proceedings in the High Court or in the District Court in respect of a claim which by reason of the expiration of the limitation period prescribed by subsection (1) is not actionable in accordance with this Ordinance."

9. That apparently was one of the bases for the adjudicator's decision. The Labour Tribunal Ordinance was enacted before the Small Claims Tribunal Ordinance, but s.9(3) was not amended to include a reference to the Small Claims Tribunal when the latter Ordinance was passed.

10. In my view, it is clear that s.9(3) does not expressly provide that a claim which is more one year old and which falls outside the jurisdiction of the Labour Tribunal by virtue of s.9(1) must go to the District Court or High Court. It simply says that a decline of jurisdiction by the Labour Tribunal as a result of a time-bar does not have the effect of turning a claimant completely out of court such that he can no longer lodge his claim in any other court in Hong Kong. In my view, s.9(3) is a saving provision in view of the operation of s.7 and s.9(1). Section 7 confers exclusive jurisdiction on the Labour Tribunal and therefore no other court in Hong Kong can deal with the claim unless it is permitted by the Labour Tribunal Ordinance. But s.9(1) sets a time limit outside which the Labour Tribunal shall have no jurisdiction. Without s.9(3), it is arguable that no other court in Hong Kong can deal with a claim which is time-barred. Hence, s.9(3) makes it clear that this is not the case. Where should such a claim be lodged?

11. There is s.37A of the District Court Ordinance, Cap 336. It provides that the District Court shall have no jurisdiction if a claim is within the jurisdiction of the Small Claims Tribunal unless the Small Claims Tribunal Ordinance confers jurisdiction on the District Court by way of, say, a transfer. That means that if a claim is within the jurisdiction of the Small Claim Tribunal, in view of its size, it should be lodged in that Tribunal and not in the District Court.

12. It should follow that if a claim which is time-barred by virtue of s.9(1) of the Labour Tribunal Ordinance falls within the Schedule to the Small Claims Tribunal Ordinance, e.g. a claim based on contract which is less than $15,000, it should be actionable in that Tribunal. There is nothing, in my view, in s.9(3) of the Labour Tribunal Ordinance which expressly prohibits this.

13. The situation is slightly complicated by first, the case of Chan Cheung Fong and second, s.7(3) of the Minor Employment Claims Adjudication Board Ordinance, Cap 453. In the case of Chan Cheung Fong, Hunter JA said at p.217A :

"It seems to me that one has to note these points under this Ordinance. First, this is an exclusive jurisdiction within time limits. If the claim falls within those time limit, no other court has jurisdiction. Correspondingly, outside that time limit, the only courts with jurisdiction are the District Court and the High Court."(my italics)

At p.218D, the learned judge said :

"One can see straightaway that those claims would have had to have been brought in the District Court."

These comments may give rise to the impression that the Court of Appeal there held that any claim which falls outside the jurisdiction of the Labour Tribunal because of the time limit must be lodged in the District Court or in the High Court. However, I do not think that was the intention of the learned judge or the Court of Appeal. It is important to note that the claim in that case was more than $15,000. It is therefore not surprising that the Court of Appeal was thinking of only the District Court or the High Court. It is likely that the Court of Appeal did not apply their minds to the possibility of having the claim commenced in the Small Claims Tribunal. As I said, s.9(3) is a saving provision and not meant to confer jurisdiction on the District Court or High Court exclusively. In any event, this is of course merely obiter and it is not clear whether s.37A of the District Court Ordinance was in the minds of the learned judges.

14. The second complication is s.7(3) of the MECAB Ordinance. It is similar to s.9(3) of the Labour Tribunal Ordinance except that it refers to the Small Claims Tribunal apart from the District Court or the High Court. Counsel for the appellant argues that there is an oversight in the Labour Tribunal Ordinance. On the other hand, Counsel for the respondent submits that the contrast shows clearly that the intention of the legislature was to prevent claims falling outside the Labour Tribunal by virtue of s.9(1) from falling within the jurisdiction of the Small Claims Tribunal. Is that an oversight or a deliberate omission ?

15. In my view, there is a fairly comprehensive court system in Hong Kong with a fairly clear division in jurisdiction. Different courts or tribunals are governed by separate and individual ordinances. Each ordinance sets out the jurisdiction and limitations of each court or tribunal. Some courts or tribunals have jurisdiction to the exclusion of others. In certain circumstances, there may be an overlap in jurisdiction in different courts or tribunals. The Labour Tribunal was set up to adjudicate on labour disputes in a quick, cheap and informal way. The Small Claims Tribunal was also set up for the same purpose dealing with monetary claims under $15,000. Each of these tribunals has a time limit for lodging claims within its jurisdiction. It would, in my view, defeat the purpose of setting up these tribunals if claims are lodged years after the causes of action have arisen. Any claim which is time-barred has to be dealt with in some other court and in some other way. However, I do not think it is the intention of the legislature in setting time limits for these tribunals to ignore the division in jurisdiction according to the size of the claim. The fact that s.9(3) refers to District Court or High Court shows that there can be a choice of forum depending on the amount of the claim. It would be illogical, in my view, if a labour dispute which falls outside the Labour Tribunal or the MECAB because it is more than one year old, should go to the Small Claims Tribunal if it is under $5,000 but to go to the District Court if it is between $5,000 and $15,000. To do this is to ignore the letter and spirit of the Small Claims Tribunal Ordinance.

16. In my view, I think the omission to refer in s.9(3) of the Labour Tribunal Ordinance to the Small Claims Tribunal is an oversight rather than deliberate. But this does not affect the situation. This subsection is not an empowering provision conferring exclusive jurisdiction on the District Court or the High Court, but a saving provision enabling a labour dispute which is time-barred to be brought elsewhere. Where such a claim falls within the provisions of the Small Claims Tribunal, it should be litigated there.

17. For the reasons given above, it is clear that the appellant's claim should fall within the jurisdiction of the Small Claims Tribunal. The Adjudicator was wrong to decline jurisdiction.

18. In the circumstances, I would allow the appeal, set aside the order of the Adjudicator and remit the appellant's claim to the Small Claims Tribunal to be heard by another Adjudicator.