LAM CHING KAI AND OTHERS v. LIK PO CONSTRUCTION ENGINEERING LTD

HCLA 12/2021

[2022] HKCFI 967

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 12 OF 2021

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 944 OF 2020)

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D E C I S I O N

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1.  After trial, the Labour Tribunal made an award in favour of the 9 claimants against the 3 defendants for outstanding wages. The 2^nd and the 3^rd defendants’ subsequent applications for review were dismissed. Now the 2^nd defendant seeks leave from this court to appeal.

Background

2.  Essentially, the 9 claimants worked at the construction site, which was the major renovation of a building at Tuen Mun, New Territories, in 2019. The 1^st defendant was the principal contractor, and the 2^nd defendant was its subcontractor. The 3^rd defendant subcontracted the concrete work from the 2^nd defendant. The 1^st and the 2^nd defendants were caught to the extent of their statutory liability pursuant to section 43C of the Employment Ordinance, Cap 57 to pay the first two months of the outstanding wages of the claimants owed by the 3^rd defendant as their employer. That was the claimants’ case.

3.  The 3^rd defendant denied that he was at the time the employer of the claimants. During the call over hearing, the 3^rd defendant revealed that he further subcontracted the exterior wall mosaic work to the 1^st claimant. The other claimants, he alleged, were hired by the 1^st claimant.

4.  The 3^rd defendant’s stance was adopted by the 1^st and the 2^nd defendants in their defence. However, the 3^rd defendant became absent from subsequent mention hearings and the trial.

5.  Trial of the claims lasted for 5 days. On 13 July 2021, the deputy presiding officer delivered her decision (“the Decision”). She found that the 9 claimants at the material times worked as employees of the 3^rd defendant, and she made findings as to quantum. The award was then made against the 3^rd defendant. As mentioned, the 1^st and the 2^nd defendants were thus liable to pay the first 2 months of the outstanding wages of the claimants.

6.  The 2^nd and the 3^rd defendants filed their respective applications for review. After hearing on 17 September 2021, the deputy presiding officer refused the applications (“the Review Decision”). Except for varying part of the costs order on her own motion, she maintained the Decision.

7.  On 5 October 2021, the 2^nd defendant filed its application for leave to appeal.

8.  On 26 November 2021, the deputy presiding officer provided her written reasons for her above decisions (respectively “the Reasons for Decision” and “Reasons for the Review Decision”). On the same day, the 2^nd defendant filed a further application to amend its application for leave to appeal.

9.  Before this court are the 2^nd defendant’s application for leave to appeal and its application to amend such application.

Amendment

10.  At the ex parte stage, this court has the power to allow amendment of the grounds of appeal pursuant to section 8A(2) of the Labour Tribunal (General) Rules, Cap 25A. I will proceed to consider the proposed grounds of appeal as amended.

The amended application for leave to appeal

11.  Section 32 of the Labour Tribunal Ordinance, Cap 25 (“LTO”) provides that an appeal against the decision or order of the tribunal must either be on point of law or on jurisdiction. Insofar as appeal on findings of fact is concerned, it is trite that the scope is very limited. Unless the appellant demonstrates palpable errors in such findings, the appellate court should refrain from intervening. Such impeachable findings must be unsupported by or contrary to the evidence or be such that no reasonable tribunal would have come to. See China Gold Finance Ltd v CIL Holdings Limited, CACV 11/2015 (27 November 2015).

12.  The 2^nd defendant says the Decision and the Review Decision are not fair or proper. This, it says, was due to the deputy presiding officer’s failure to investigate or to adequately investigate. In this regard, section 20(3) of the LTO requires the presiding officer to investigate any matter which he or she may consider relevant to the claim, whether or not it has been raised by a party: see for instance Park Chul Soo v Swee Kheng Building Material Co Limited, HCLA 1/2021 (29 September 2021) at §3 (citing Wai Mei Lai Stella v Viya Pramita, HCLA 3/2010 (28 June 2011) at §16).

13.  What the deputy presiding officer is said to have failed to investigate or adequately investigate are: (i) whether the 1^st claimant was a subcontractor or employee of the 3^rd defendant; and (ii) if all the claimants were employed by the 3^rd defendant, their rates of salary (“the Key Issues”).

14.  Under §1 of the application, the 2^nd defendant set out the following circumstances which, it says, gave rise to the error of the deputy presiding officer:

(1)  The 3^rd defendant revealed at the call-over hearing that the 1^st claimant was his subcontractor whom the 3^rd defendant had also paid a sum of HK$50,000 in cash as partial and advance payment of the sub-contract price.

(2)  However, due to the absence of the 3^rd defendant from the trial, the deputy presiding officer acknowledged that the above allegation of the 3^rd defendant could not be tested.

(3)  Notwithstanding the 3^rd defendant’s reiteration of his above allegation in his application for review, his application was dismissed on procedural ground. The 3^rd defendant could not give the evidence that he had wanted to give, which would have been material to the defence of the 2^nd defendant in respect of the Key Issues.

(4)  By dismissing the 2^nd defendant’s application for review and refusing to receive the supplemental witness statements of Lai Chi Chung (“Lai”) and Kwan Kam Hung (“Kwan”) that it sought to adduce, the deputy presiding officer failed to investigate and to consider if such evidence might corroborate the evidence that the 3^rd defendant had wanted to but was unable to adduce as mentioned above.

(5)  The further investigation which the deputy presiding officer failed to do would have made a difference or a material influence on her determination of the Key Issues.

15.  §2 of the application actually adds nothing material to the above.

Circumstance (1) above

16.  The deputy presiding officer’s summary of the issues for trial[1] was in essence no different from the Key Issues set out in the 2^nd defendant’s present application in any material way.

17.  It is also immaterial for the 2^nd defendant to highlight the fact that the 3^rd defendant’s defence, repeated in the present application, was made known to the tribunal as early as the call over hearing. The deputy presiding officer trying the case was clearly aware of that[2].

18.  The 2^nd defendant highlights that the deputy presiding officer made her findings after trial in the absence of the 3^rd defendant. That is neither here nor there, particularly when, as will be discussed below, the 3^rd defendant as a party needed no reminder of his role and interest to advance and to substantiate his defence. The fact, again as will be discussed below, was that the 3^rd defendant was also specifically directed to lodge his witness statement and documents in support of what was revealed to be his defence during the call over hearing.

19.  By way of amendment, the 2^nd defendant somehow made it a point that the deputy presiding officer in her ex-temporae reasons for the Decision made clear that the 3^rd defendant’s defence revealed at the call over hearing were untested as he was absent from the trial. That is neither here nor there. It was not that the Key Issues were not investigated at the trial. The deputy presiding officer considered the evidence from the parties that were before her regarding the Key Issues, and came to her findings in respect of those issues by indisputably applying the correct standard of proof. The details and discussion in the Reasons for Decision demonstrate that.

20.  The grounds of appeal do not seem to suggest that the deputy presiding officer erred in law in the sense that she failed to take into account relevant evidence or to read the relevant evidence correctly or that she made such findings that no reasonable tribunal would have made on the basis of the evidence before her. Considering the evidence and the Reasons for the Decision, I am of the view that she was entitled to come to such findings in the circumstances of the case. The allegation of failure of the deputy presiding officer to investigate adequately mainly came about after the 3^rd defendant appeared only after the trial and applied for review of her adjudication.

Circumstances (2), (3) and (4) above

21.  These circumstances should be considered together, as they have to do with how the deputy presiding officer determined the applications for review by the 2^nd and the 3^rd defendants.

22.  The 3^rd defendant’s absence from the trial should not prevent the deputy presiding officer from proceeding, when there is no complaint that the circumstances should have caused her to doubt if the 3^rd defendant had notice of the trial. As could be seen from the Reasons for the Review Decision discussed below, the 3^rd defendant’s excuse for his own failure to receive notices of hearing was rejected after consideration. The deputy presiding officer was entitled to come such view. The 3^rd defendant does not seek to challenge that.

23.  It is incorrect to categorise the deputy presiding officer’s dismissal of the 3^rd defendant’s application for review as being based on mere procedural ground. That, to begin with, was an application pursuant to section 21A of the LTO for setting aside the adjudication and award made in his absence[3]. The deputy presiding officer reminded herself of the relevant test in considering how the discretion ought to be exercised[4]. Even the 2^nd defendant in the present application does not say that the deputy presiding officer was erroneous insofar as the applicable principles were concerned. The deputy presiding officer then proceeded to consider the relevant factors in the circumstances of the present case before exercising her discretion.

24.  In her deliberation, the deputy presiding officer did consider the substance of the 3^rd defendant’s allegations as mentioned above. However, whilst the 2^nd defendant emphasizes the importance of such allegations for the purpose of its defence, the 3^rd defendant, apart from making known his allegations at the call over hearing, has lodged no statement setting out his defence or any other evidence in support whatsoever. As the deputy presiding officer rightly pointed out[5], his alleged lack of knowledge about the subsequent mention hearings, which she rejected, was no excuse for that. The very presiding officer, to whom the 3^rd defendant revealed his defence during the call over hearing, gave directions in his presence for the filing of witness statements to set out his defence and documentary evidence. The inexcusable failure of the 3^rd defendant and now attempt to re-open the dispute was considered to be an abuse of process[6]. That conclusion, in my view, was what the deputy presiding officer was entitled in the circumstances to come to. In any event, the 3^rd defendant does not seek to appeal against that either.

25.  Now the peculiar feature of the present application surfaces. The 2^nd defendant is seeking leave to appeal partly on the basis that the deputy presiding officer should not have dismissed the 3^rd defendant’s application for review and should have allowed him to reopen his defence so that he could give the evidence that the 2^nd defendant needs to rely on for its defence. That I understand constituted the alleged failure of the deputy presiding officer to adequately investigate, now that the 3^rd defendant appeared.

26.  As the 2^nd defendant acknowledges in its application[7], it was not privy to the relevant dealing between the 3^rd defendant and the 1^st claimant or that amongst the claimants. It was aware of the need to rely on the defence and evidence of the 3^rd defendant for its defence. However, I know no principle or authority that such consideration for the purpose of a party affords a valid basis for the tribunal to allow an application for review by another party, let alone when the latter does not seek to challenge the dismissal of his such application.

27.  Importantly, it is unfair, if not wrong, to criticize the deputy presiding officer for failing to discharge her duty to adequately investigate on this basis. Section 20(2) of the LTO empowers the presiding officer to subpoena witnesses, order the production of any document or record and put to a party or witness such questions as he or she may think fit. However, this is not a situation where she failed to consider directing certain witness or evidence to be called or, upon application for review, to allow a witness or evidence to be adduced.

28.  The fact of the present case is that both the 2^nd and the 3^rd defendants were actually parties in the proceedings who were expected to advance and to substantiate their defence to the claims. The 3^rd defendant was indeed directed at the call over hearing to lodge his statement setting out his defence and any documentary evidence in support of that. On the basis of the alleged significance of the 3^rd defendant’s allegations and evidence to its defence, the 2^nd defendant would have been expected to secure the 3^rd defendant’s attendance and evidence for its sake before the matter could proceed to trial. The fact however was that the 3^rd defendant has been absent from all the hearings ever since January 2021. Further, as mentioned, the 3^rd defendant has not actually adduced any evidence whatsoever.

29.  The duty of the deputy presiding officer to investigate, in my view, does not require her to allow the 3^rd defendant’s application for review and to re-open the dispute regardless of all these circumstances relevant to the exercise of her discretion in setting aside the award as discussed above. Equally she should not be subject to criticism for not doing so for the purpose of enabling the 2^nd defendant to re-open his defence. That the 2^nd defendant needs to rely on the 3^rd defendant’s case does not trump in the consideration.

30.  As regards the supplemental witness statements of Lai and Kwan sought to be adduced for the purpose of the application for review, it should be noted that the 2^nd defendant sought to adduce them actually as its answer to the specific direction of the deputy presiding officer for perfected grounds of the application for review. She then did consider the stance stated in these supplemental witness statements as such grounds of the 2^nd defendant’s application for review[8]. The deputy presiding officer proceeded to consider the substance of these statements, but considered that they could not have the necessary bearing on altering her findings after the trial. She in particular highlighted: (i) the stance of the 2^nd defendant (and the 1^st defendant) at the trial, which the 2^nd defendant ought not be permitted to overturn at the application for review; and (ii) the bearing of the intended further evidence concerning the workers’ daily wage rate on the sustainability of her findings after trial[9]. The deputy presiding officer came to a conclusion against the 2^nd defendant. All materials considered, I am of the view that she was quite entitled to come to such a conclusion.

31.  As it is so put in the present application, the supplemental witness statements of the 2^nd defendant were sought to be adduced also with a view to corroborating the evidence that the 3^rd defendant sought to adduce. As the 3^rd defendant does not seek to challenge the dismissal of his application for review, which, in my view, was not impeachable in the circumstances, these statements would fail to serve their intended purpose in any event.

Circumstance (5) above

32.  It follows from the above that the 2^nd defendant may not suggest that the deputy presiding officer failed to investigate or further investigate into what would have made a difference or a material influence to her findings.

Conclusion

33.  I would therefore allow the application to amend. However, as the 2^nd defendant fails to satisfy this court that the grounds set out in its application as amended are at all arguable for the purpose of section 32 of the LTO, such application for leave to appeal as amended is dismissed.

34.  I make no order as to costs in respect of the above.