HOOI SIEW FONG, RACHEL v. CATHAY PACIFIC AIRWAYS LTD AND ANOTHER

CACV 146/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 146 OF 2010

(ON APPEAL FROM HCA NOS. 2186 OF 2009 AND 2309 OF 2009)

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HCA 2186/2009

BETWEEN

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HCA 2309/2009

BETWEEN

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(HEARD TOGETHER)

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J U D G M E N T

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Hon Le Pichon JA:

Introduction

1.  This is an appeal by the plaintiff (who appeared in person) from an order dated 15 June 2010 of Deputy High Court Judge L Chan.  At the conclusion of the hearing judgment was reserved which we now give.

2.  There were two summonses before the judge: the first was an application dated 11 December 2009 by Cathay Pacific Airways Ltd (“CPA”) and Canon Trustees Ltd, (“the trustee”), inter alia, to strike out HCA 2186 of 2009 (“HCA 2186”) pursuant to Order 18 Rule 19 of the Rules of the High Court and the second was the plaintiff’s summons to consolidate HCA 2186 with HCA 2309 of 2009 (“HCA 2309”).

3.  The judge struck out the statement of claim in HCA 2186 and dismissed the action against CPA and the trustee.  CPA was ordered to bear the costs of the trustee and the plaintiff was ordered to bear 50% of CPA’s costs of the application assessed at $42,300 and payable by the plaintiff forthwith.  The plaintiff’s summons for consolidation was dismissed with no order as to costs.

4.  The plaintiff is aggrieved by the order striking out HCA 2186 (the corollary of which was the dismissal of the consolidation application) as well as the costs order made against her.  As will become apparent, she has other grievances: it was said that the judge failed to resolve certain outstanding matters.

Chronology

5.  HCA 2309 started life in the Labour Tribunal in 2006 as LBTC 3235 (“the Labour Tribunal proceedings”) in which the plaintiff was the claimant and CPA the defendant.

6.  The plaintiff joined CPA as a cabin attendant on 7 November 1983 and, as such, she was a member of the Swire Group Retirement Benefits Scheme (“SGRBS”).  Her employment came to an end on 6 April 2006 upon her resignation.  The plaintiff’s case is that she was constructively dismissed.  She was allegedly allergic to a spray used by CPA in its aircrafts and she was forced to resign because, notwithstanding her protests, CPA continued to use the spray.

7.  The plaintiff brought the Labour Tribunal proceedings against CPA on 22 June 2006 claiming loss of retirement benefits and salary in the sums of approximately $0.69 million and $4.75 million respectively.  Thus the bulk of her claim (some 87%) was in respect of loss of salary.  It is recorded in § 2 of the Reasons for Decision of the presiding officer dated 11 May 2009 that the loss of salary claim was withdrawn on 23 October 2006.  As a result, the only matter before the presiding officer in the Labour Tribunal proceedings was the claim for loss of retirement benefits.  That claim was dismissed on 7 July 2008 (“the 2008 order”) although the Reasons for Decision were not handed down until 11 May 2009.

8.  The presiding officer acceded to the plaintiff’s request to review his decision, but dismissed it on review on 30 March 2009 (“the 2009 order”).  Meanwhile on 5 December 2008, the plaintiff applied to restore the loss of salary claim.  That application was rejected, apparently “for procedural reasons”.

9.  At the review hearing, CPA succeeded on a new argument that had not been raised at the trial or even pleaded in its defence, namely, that the plaintiff had sued the wrong party.  CPA, relying on Ali Shoukat v Hang Seng Bank Ltd, unreported, (HCAL 112 of 2004), successfully argued that the claim for loss of retirement benefits should have been brought against the trustee of SGRBS and as the Labour Tribunal does not have to jurisdiction to entertain a claim against the trustee, any such action has to be brought in the High Court.  It is to be noted that the refusal of the plaintiff’s application of December 2008 to restore the loss of salary claim is recorded in § 2 of the Reasons for Decision for the 2009 order handed down on 11 May 2009.

10.  The plaintiff obtained leave to appeal and her appeal was allowed on 13 August 2009 by Poon J who ordered a retrial before a different presiding officer.

11.  The Labour Tribunal proceedings then came before deputy presiding officer Pang for directions on 29 September 2009 (“the September hearing”).  It is clear from the transcript of the September hearing that at that stage the only live issue to be decided in the Labour Tribunal proceedings was the claim for loss of retirement benefits.  When the plaintiff sought to restore the loss of salary claim in the Labour Tribunal proceedings at the September hearing, she was directed by the deputy presiding officer to make a formal application by way of a statement setting out the grounds and explaining in detail how the loss was to be calculated, such formal application to be heard at the next mention.

12.  Another matter arising at the September hearing was the plaintiff’s proposed claim against the trustee.  The plaintiff was given to understand that if she were to proceed with that claim, she would have to issue a writ in the High Court prior to the next mention.

13.  Accordingly, the plaintiff caused a writ indorsed with a statement of claim (being HCA 2186) to be issued on 29 October 2009 the day prior to the next mention which took place on 30 October 2009 (“the October hearing”).  At the behest of the deputy presiding officer, copies of the writ were made and considered at the October hearing.

14.  HCA 2186 was a claim against CPA for the loss of salary due to constructive dismissal and against the trustee for the loss of retirement benefits.  At that stage, HCA 2186 had not been served.

15.  It is highly regrettable that at the October hearing the plaintiff’s  intended formal application to restore the loss of salary claim to the Labour Tribunal proceedings (which was one of two principal matters to be considered at the October hearing by the deputy presiding officer) was not dealt with.  Nor was it made clear to the plaintiff who remained a litigant in person that exclusive jurisdiction to determine monetary claims is vested in the Labour Tribunal in respect of a breach of a contract of employment in the absence of a decision by the Tribunal to decline jurisdiction under s.10(1) of the Labour Tribunal Ordinance.  Instead, in dealing with the plaintiff’s application to transfer the Labour Tribunal proceedings to the High Court, the deputy presiding officer (CPA consenting) simply transferred those proceedings to the Court of First Instance for disposal without more, when it was beyond argument that the Court of First Instance had no jurisdiction to entertain the loss of salary claim in HCA 2186 and the proceedings being transferred was nothing beyond the retirements benefits claim.

This appeal

The strike out and consolidation applications

16.  As these two applications in the present case are, in substance, two sides of the same coin, it would be convenient to deal with them together.

17.  As earlier noted, the Labour Tribunal has exclusive jurisdiction over the plaintiff’s claim to compensation for loss of salary due to constructive dismissal.  The Court of First Instance does not have jurisdiction and it follows that the judge was correct in striking out that part of the claim.

18.  The remaining claim is one made against the trustee.  In the course of the hearing, it was explained to the plaintiff that if she were to succeed in her claim against her employer for constructive dismissal, she would recover damages.  Compensation in respect of loss of retirement benefits would be one item of loss for which her employer would be responsible.  Thus, the constructive dismissal claim must be brought against her employer and not the trustee.

19.  While, (assuming the complaint of constructive dismissal is made out at trial), the plaintiff appeared to accept that, so far as damages or compensation are/is concerned, she must look to CPA and not the trustee, the plaintiff nevertheless maintained that she had a complaint against the trustee for refusing to take note of her amendments to the Membership Termination Form received by the trustee on 11 April 2006.  In the form sent to her by the trustee, the reason for termination was stated to be “normal retirement” whereas the plaintiff considered that the correct designation should be “resignation”.  Her complaint is that the trustee ought to have taken note of amendment and rectified the form accordingly.

20.  Suffice it to say that rectification is not a relief sought in HCA 2186.  In my view, the judge was correct in striking out the claim against the trustee.

The costs order against the plaintiff

21.  The plaintiff feels aggrieved by the order to pay 50% of CPA’s costs of the striking out application, assessed at $42,300 and payable forthwith.  While the judge has a wide discretion as to costs, the question remains whether, in the circumstances of this case and given the history of the Labour Tribunal proceedings, it was a proper exercise of his discretion.

22.  In approaching that question, the starting point is to consider why the claim came to be brought in the Court of First Instance in the first place.  From the very beginning, the plaintiff’s case (which began life in the form of the Labour Tribunal proceedings) was and remains a claim in damages for constructive dismissal.  As earlier noted, the bulk of that claim was for loss of salary.  The withdrawal of that claim and the plaintiff’s attempts to restore it appear from the detailed chronology set out above.

23.  The purpose, or one of the main purposes, of the October hearing was to have that question resolved by the deputy presiding officer.  The intended application was not made because the plaintiff erroneously believed that the writ in HCA 2186 (which had already been issued) had the effect of putting that claim being before the Court of First Instance.  There is nothing to suggest that the plaintiff instituted HCA 2186 in bad faith, in full knowledge of the lack of jurisdiction of the court to entertain such a claim.

24.  It is quite clear that when the two applications came before the judge on 15 June 2010, apart from the impermissible loss of salary claim made in HCA 2186, the Labour Tribunal proceedings which had become HCA 2039 did not contain a loss of salary claim. It is not suggested and it is not CPA’s stance in this court that the plaintiff is or should be debarred or precluded from advancing or making such a claim.

25.  In my view, the matter of restoring the loss of salary claim should have been dealt with irrespective of any formal application by the plaintiff since its restoration was plainly one of the main reasons for having the October hearing.  The deputy presiding officer must have known that the Court of First Instance lacked jurisdiction to entertain the loss of salary claim in HCA 2186.  Yet he allowed the Labour Tribunal proceedings to be transferred without restoring the loss of salary claim and without disabusing the plaintiff of her fundamental error.  Further, although the writ had already been issued, it had not been served and could easily have been amended by deleting that part of the claim had the jurisdictional point been brought to the plaintiff’s attention.  Had that been done, a lot of aggravation and the strike out by CPA would have been avoided.

26.  Mr Man who appeared for CPA and the trustee submitted that it was well within the judge’s discretion to make the costs order that he did, even suggesting that the order was generous to the plaintiff.  I do not agree.  Given the genesis of and subsequent history of the claim for loss of salary, it made no sense for the Labour Tribunal proceedings to be transferred without restoring the claim for loss of salary.  Had that been restored, its equivalent in HCA 2186 could have been dropped.  It was said that in making his costs order, the judge was well aware of the history of the Labour Tribunal proceedings.  However, that is not readily apparent from his judgment which referred to the “duplication” of the loss of salary when it was not the case.

27.  In the circumstances, the plaintiff should not be penalized by having to bear part of CPA’s costs.  In my view, the only fair order would be to order that there be no order as to costs.

28.  Further it should be mentioned that pursuant to the judge’s directions given on 15 June 2010, a statement of claim in HCA 2309 has been filed.  It is noted that no claim appears to have been made for loss of salary and there is no claim that replicates § 17(i) of HCA 2186 which has been struck out.  In these circumstances, the plaintiff may wish to amend her statement of claim in HCA 2309 and restore her claim for loss of salary.  Mr Man has indicated that he has no objection to such an amendment.  It would not be appropriate for this court to grant leave to amend in the absence of a draft of the proposed amendment.  Any application for amendment should be made in the Court of First Instance.

Other complaints

29.  There were two other complaints: the first was that the judge failed to deal with ‘the alleged material non-disclosure’ application filed on 29 January 2010 and the second was that he failed to deal with the defendants’ alleged contempt of court.  Both matters can be dealt with shortly.

The alleged material non-disclosure

30.  The plaintiff issued a summons on 29 January 2010 seeking certain relief.  It came before Master Ng who, by her order dated 5 February 2010, inter alia, granted:

“4. Leave to the Plaintiff to file and serve a further affirmation to … (ii) deal with the alleged material non-disclosure by the 1^st and 2^nd Defendants on or before 20 March 2010.”

The master further ordered that:

“7. Costs of paragraph 2 of the Plaintiff’s application by way of Summons dated 29^th of January 2010 be costs in the 1^st and 2^nd Defendants’ Summons dated 11 December 2009.”

31.  § 4 of the order reflected the relief sought by § 2 of the plaintiff’s January summons.  It is clear that § 4 did no more than grant leave to the plaintiff to file a further affirmation to deal with the alleged material non-disclosure: it did not direct a hearing on that issue.  Then by § 7, the master dealt with the costs of the plaintiff’s application.  There was no appeal to the judge from that costs order.

32.  It would appear that the plaintiff was labouring under some misapprehension: she believed that § 7 of Master Ng’s order had the effect of requiring the judge to rule on the issue of non-disclosure or costs thereof in the same way as he had to rule on the strikeout.  But that is not its effect.  The plaintiff’s complaint is misconceived.

Contempt of court

33.  It was also said that the judge failed to deal with the plaintiff’s complaint that CPA and the trustee had made untrue, contradictory and misleading statements and should be committed for contempt.  Contempt of court is a serious matter.  Order 52 of the Rules of the High Court governs the procedure for committal which normally requires strict compliance.  In the present case, the procedure prescribed by Order 52 has not been invoked and no application for leave to apply for committal has been made.  The plaintiff intimated that she was seeking to apply directly to this court to do so.

34.  An application for leave to commence committal proceedings cannot be made directly to this court.  A formal application following the prescribed procedure has to be made in the Court of First Instance.  Accordingly, there is no merit in the complaint that the judge failed to deal with the contempt issue.

Order

35.  I would vary § 4 of the order of 15 June 2010 by substituting in its place an order that there be no order as to costs.  So far as the costs of the appeal are concerned, I would order nisi that there be no order as to costs.

Hon Cheung JA:

36.  I agree.

Hon Yuen JA:

37.  I agree with Le Pichon JA’s judgment.

Hon Le Pichon JA:

38.  Accordingly, there will be an order in terms of § 35 above.