XCHRX POON PO WAH, STEPHEN v. DELTA ASIA CREDIT LTD.

1994, No. A302

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. In his action against the defendant, the plaintiff alleged in his statement of claim that the defendant dismissed him from his employment in breach of contract. He says that he has been deprived of his salary and other benefits that he would have earned or been entitled to but for the defendant's breach, and he has thereby suffered loss and damage. The particulars he gives regarding his claim for $639,664 are -

2. He claims this sum of "$639,664, alternatively damages".

3. The plaintiff applied for judgment under Order 14. In his application, he claimed "final judgment in this action against the Defendant for HK$639,664.00 or alternatively damages to be assessed". In his affirmation in support of his application for judgment, the plaintiff said that the defendant is "justly and truly indebted to me in the sum of HK$639,664 (or alternatively damages)". He referred to the particulars in his statement of claim, and said "I confirm the truth of the facts and matters set out in the statement of claim and I confirm my belief that the Defendant has no defence to the claim set forth therein save as to the amount of damages."

4. On 19 September 1995, the Master gave judgment in favour of the plaintiff in the sum of $639,664.

5. The defendant appeals against this judgment. Originally, the defendant appealed against the decision on liability, but now confines his case to saying that the judgment should have been for damages to be assessed.

6. However one wishes to categorise the plaintiff's claim to the sum of $639,664, it is clear that, in his claim and his evidence in support of his application for judgment, he distinguished clearly between his claim to this sum as quantified and an unquantified sum as damages. So, it is not so, as Mr Wong argued, that the plaintiff failed to say in his affirmation that the defendant had no defence to this claim for $639,664. The phrase he used - "save as to the amount of damages" - is a clear reference to his alternative claim to damages, not the claim of $639,664 as particularised.

7. The next point raised by Mr Wong is that the plaintiff had a duty to mitigate his loss arising out of the wrongful dismissal. In the circumstances of this case, that is not so. Section 8A of the Employment Ordinance (Cap. 57) provides that ". . . where a contract of employment is terminated . . . a sum equal to the amount of wages which would have accrued to the employee during the period of notice required by section 6 shall be payable by the party terminating the contract to the other party." It is common cause that, in this case, the period of notice was 6 months. It follows that the plaintiff is entitled to payment of the sum of $519,200 as particularised. Rather late in day, Mr Wong said that, from this sum, should be deducted the tax that that is due to the Macanese authorities. I do not think so. I will explain why when I deal with the plaintiff's claim for wrongful tax deduction.

8. Even if it is so, Mr Wong says, that the claim for salary is allowable under section 8A, the other claims are not. The claims for the return of provident fund contributions, for leave pay and for reimbursement of the expenses all arise out of the contract. The plaintiff gave evidence that the defendant was truly and justly indebted to him in these sums, and that the defendant had no defence to these claims. The defendant did not attempt to controvert this. Mr Wong says this was because the defendant believed that the plaintiff was claiming only judgment for damages to be assessed so did not attempt to deal with the details of the plaintiff's claim. Such a belief was totally unjustified. As I have recited above, the plaintiff's claim for judgment was for the sum of $639,664, and that sum had been particularised. The Order 14 summons made it quite clear that the claim for damages to be assessed was an alternative claim. The fact is that the defendant did not raise any defence to these particular claims, and the plaintiff is entitled to judgment for them.

9. There is one claim, however, that concerned me. That is the one for tax wrongly withheld. The plaintiff says that he was entitled to his salary without deduction for Macanese tax. He says this was agreed with a Mr John McLean, who has sworn affidavits supporting him. Mr Mclean no longer works for the defendant, but at the time concerned he was its managing director and vice-chairman of the group of companies to which the defendant belonged. Mr Mclean is supported by Mr Li Wing Yiu, who was the group personnel manager. He says that Mr Weymond Lam instructed him that the defendant should pay the plaintiff's tax. Mr Weymond Hong Wai Lam was the group personnel director. He says that Mr McLean told him that the defendant must pay the plaintiff's tax. He told Mr Li this. Neither Mr Lam nor Mr Li queried Mr McLean's authority to make this decision. Thereafter, until the plaintiff was dismissed, his Macanese tax was paid by the defendant.

10. The defendant has adduced evidence that seeks to show that it is unlikely that he would have agreed this, and, if he did, he had no authority to do so. This evidence was adduced in a failed attempt to justify the plaintiff's dismissal, but it is there. Nothing is said on behalf of the defendant that can be said to make any dent in the evidence adduced on behalf of the plaintiff that Mr McLean did in fact agree that the defendant should pay the plaintiff's tax. The only real issue that could be argued was fit for trial is Mr McLean's authority to make this agreement with the plaintiff. As I have said, Mr McLean was managing director of the defendant and vice-chairman of the group. He was put in that position by the defendant. It would, in my view, be natural that employees of the defendant would believe that a person put in that senior position by the defendant would have authority to deal, on behalf of the defendant, with minor personnel matters; certainly, a matter such as agreeing to pay the plaintiff's Macanese tax amounting to some $12,000 per month. Clearly, the plaintiff believed he had that authority. Equally clearly, Mr Li and Mr Lam believed he had that authority. In my judgment, no one can blame them for that. Their belief that he had such authority flowed naturally from the fact that the defendant had appointed him to the senior position he occupied. In fact, the defendant paid the plaintiff's tax for well over a year. In these circumstances, I hold that Mr McLean had apparent authority to make the agreement with the plaintiff. It follows that the plaintiff is entitled to payment of the sum of $12,854 under this head also.

11. In the result, the defendant's appeal against the Master's decision is dismissed.

12. There seems no reason why the defendant should not pay the plaintiff's costs. I make an order nisi that the defendant pay the plaintiff's costs of appeal, with a certificate for counsel.