FUNG TSUN TONG v. CHOU MAN LEUNG

HCLA 13/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 13 OF 2016

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO LBTC 1800 OF 2015)

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JUDGMENT

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I. INTRODUCTION

1.  Fung Tsun Tong (“C”) was the claimant in LBTC1800/2015 and the defendant in LBTC3400/2015, and Chou Man Leung (“D2”) was the 2^nd defendant in LBTC1800/2015 and the claimant in LBTC3400/2015. LBTC1800/2015 and LBTC3400/2015 were tried and heard together at the Labour Tribunal (“Tribunal”).

2.  On 8 June 2015, C in LBTC1800/2015 claimed against A Link Network (H.K.) Limited (“D1”) and D2 for the sum of $69,083.41. On 29 June 2015, the Tribunal granted leave for C to withdraw his claim against D1. On 21 January 2016, C filed his amended claim to reduce the amount of his claim to $68,926.70 in line with his earnings records. D2 denied liability on the basis that C was not his employee. As to the issue of quantum, D2 did not dispute item (A) referred to in paragraph 5 below (“Item (A) Claim”), but put C to prove in respect of items (B)-(D) referred to in paragraph 5 below (“Items (B)-(D) Claims”).

3.  In LBTC3400/2015, D2 claimed against C for overpayment in the sum of $20,000. D2 commenced such claim in the Small Claims Tribunal as SCTC34562/2015. On 22 October 2015, the Small Claims Tribunal transferred such claim to the Tribunal, and it became LBTC3400/2015.

4.  On 21-22 and 25 January 2016, LBTC1800/2015 and LBTC3400/2015 were tried and heard by Deputy Presiding Officer Jocelyn Leung (“DPO”). C and D2 gave evidence. The DPO considered parts of their respective evidence unreasonable and unreliable, so she would not accept certain parts of their evidence, but she found on the available employment-related evidence that (a) they had an employer-employee relationship and (b) the quantum of C’s claim should be upheld. The DPO dismissed D2’s claim for overpayment.

5.  In the circumstances, the DPO granted the following Award/ Order (“DPO Order”):

“1. 裁決LBTC1800/2015案件之[C]之下列申索得直, [D2]須繳付[C]款項$68,926.70, 詳情如下表所列:

項目	金額
(A)欠薪	$18,500
(B)代通知金	$34,041.83
(C)有薪年假	$7,189.92
(D)有薪假期	$9,194.95
總數	$68,926.70

[D2]須按香港法例第57章《僱傭條例》第25A條支付[C]上述(A)項:欠薪的利息，利息須按法定利率由到期支付的日期起計算直至實際支付的日期止。[D2]另須按香港法例第25章《勞資審裁處條例》第39(3) 條的規定支付[C]上述(B)項:代通知金及(C)項:有薪年假及(D)項:有薪假期的利息，該利息則須由裁斷作出的日期起計算至實際支付的日期止。款項須即時繳付。

2. 裁決LBTC3400/2015案件之[C]之(A)項: Overpayment申索被撤銷。

3. [Tribunal] 案件LBTC1800/2015及LBTC3400/2015及小額錢債審裁處案件SCTC34562/15三案件之訟費合併裁決: [D2]須繳付$2,526.10予[C]。[D2]須按香港法例第25章《勞資審裁處條例》第39(3) 條的規定繳付[C]上述的利息，利息須由裁斷作出的日期起計算至實際支付的日期止。款項須即時繳付。”

6.  On 1 February 2016, D2 applied for review in respect of the DPO Order concerning LBTC1800/2015 but not LBTC3400/2015. On 7 April 2016, the DPO heard the review application. On 2 June 2016, the DPO dismissed D2’s review application. On 3 June 2016, the DPO granted the following Amended Award/Order (“DPO Review Order”):

“1. [D2]之覆核申請被撤銷, [DPO Order]仍然生效。

2. [D2]於05.02.2016存入[Tribunal]之款項$72,893.45[“Security”]可發放予[C] 。

3. 無訟費命令。”

7.  On 8 July 2016, the DPO handed down her written Reasons for Decision for LBTC1800/2015 and LBTC3400/2015 (“DPO Reasons”).

II.  PARTIES’ RESPECTIVE CASE

8.  Details of C’s and D2’s respective case were set out in the DPO Reasons and summarised in paragraphs 9-18 of the Leave Judgment referred to in paragraph 10 below, which I shall adopt but will not repeat here. I just set out a few salient facts to put the discussion below in context:

(a) On 14 June 2014, D2 (owner of several trucks) and C (retired policeman who previously worked as a cross-border truck driver for other companies) entered into an agreement that expressly provided inter alia:

(i) “商業型式出租車輛, 車牌號碼LB691由[C]自己經營”;

(ii) “公/強積金, 勞工保險, 稅項, 交通, 貨車安全, 貨車保養及通訊等, 由租車者[C]負責, 雙方明白責任自負”;

(iii) “註: 安全貨源雙方有權提供”;

(iv) “如果有意見不合, 租車人要即時交回貨車及各項證件, 貨車必須完整為準, 車主不負任何責任 ……”

(b) C started to work for D2 on 21 June 2014 under such agreement. The agreement was subsequently terminated by D2 on 18 March 2015 without notice or payment in lieu of notice.

(c) C’s claim in LBTC1800/2015 was for outstanding wages and other payments due to D2’s termination of the agreement without notice or payment in lieu of notice.

(d) D2’s defence to C’s claim in LBTC1800/2015 for the Items (A)‑(D) Claims was essentially (i) C was all along an independent contractor and there was no 1-month notice requirement under the agreement, and (ii) the agreement was terminated and C was summarily dismissed because (1) D2 provided C with 3 gas station discount cards (“Discount Cards”) but C did not use them as instructed, and (2) C used illegal fuel for refuelling the lorry (collectively, “Twin Issues”).

III.  DPO’s REASONS

9.  The DPO set out her detailed reasons for the DPO Order and DPO Review Order in the DPO Reasons, which I had summarised in paragraphs 19-32 and 33-42 of the Leave Judgment referred to in paragraph 10 below. I do not propose to repeat them here as it sufficed to point out the DPO found C was an employee of D2 and the length of notice to terminate the agreement between C and D2 under section 6(2)(a) of the Employment Ordinance Cap 57 (“EO”) was 1 month, so D2 (who terminated the agreement without notice or payment in lieu of notice) was liable to C for the Items (A)-(D) Claims.

IV.  APPEAL: BACKGROUND

10.  On 14 June 2016, D2 applied for leave to appeal against the DPO Order and DPO Review Order on point of law on various grounds. Such application was heard by this court on 21 July 2016. I handed down judgment on 9 February 2017 (“Leave Judgment”), and granted the following order (“Leave Order”):

“1. 許可[D2]按以下的上訴理由就關於LBTC1800/2015及LBTC3400/ 2015兩案, [DPO]於2016年1月25日所頒下[DPO Order]及於2016年6月2日撤銷[D2]之覆核申請[DPO Review Order]提出上訴:

(1) [DPO]在考慮一些與案有關及關鍵性(relevant and material)事宜的處理方式是不接納提呈的證據, 未有就該些事宜可能構成案中的客觀事實或證據執行其調查責任;

(2) 就[D2]有否提供[Discount Cards]給[C]及[C]有否使用非法燃油的裁斷, [DPO]未有就以下事宜執行其調查責任, 以協助她在相對可能性下作出有關[D2]有否提供[Discount Cards]給[C]的裁斷:

(i) 每車程的一般油費;

(ii) [Discount Cards]持有人可得的燃油優惠;

(iii) 每車程的隧道/道路收費;

(iv) 每車程的其他使費或道路收費; 及

(v) [DPO]未有考慮應否從她已掌握的證據決定及如何進行調查, 及/或在調查上述(2)(i)-(iv)項所提及的事宜後, 才考慮全盤證據而對事實及[C]有否員工財政風險加以推斷;

明顯地構成不公平, 而申索也無法得到公平及正確的裁決, 屬法律觀點上犯錯; 及

2. 頒下暫准訟費命令, [D2]的上訴許可申請的一半訟費歸於上訴訟案中。”

11.  In the Leave Judgment, I rejected various intended grounds of appeal put forward by D2 save and except for one ground which I discussed in paragraphs 71-73 therein as follows:

“71. 第六, 周大律師指稱, 梁審裁官認為馮及周二人的證供也有些不合理和不可信的地方, 但她就一些與案有關及關鍵性(relevant and material)事宜的處理方式是不接納提呈的證據而沒有嘗試進行查詢。周大律師指稱, 甚至馮及周之間有僱傭關係, 梁審裁官應積極查訊周作為僱主是否有權可無須給予通知或代通知金而終止與馮的僱傭合約。[1]周指稱馮從來沒有使用他提供的油卡折扣優惠, 所以他認為馮必然把非法燃油注入他的車輛, 因為馮作供指稱周從來沒有提供油卡給他使用,而他的工資為港幣2,400.00元至2,500.00元(單程)或港幣3,400.00元至3,500.00元(雙程), 該款項已包括油費及道路/隧道費。周大律師指稱, 就這方面只有3個可能性: (1)周提供了油卡而馮亦使用油卡享有折扣優惠、(2)周提供了油卡但馮沒有使用油卡, 或(3)周沒有提供或馮不知悉周已提供了油卡。周大律師認為可排除第(1)點, 因為這並非馮的案情。至於第(2)及第(3)點, 雖然周忘記了他向馮提供油卡的日期, 但梁審裁官應該查詢以下事宜以協助她在相對可能性下作出有關周有否提供油卡給馮的裁斷: (i)每車程的一般油費, (ii)油卡持有人可得的燃油優惠, (iii)每車程的隧道/道路收費, 及(iv)每車程的其他使費或道路收費。周大律師認為上述乃關鍵事宜, 因為馮作為貨車司機的成本及費用(costs and expenses)如果超逾其每程車資便不合常理及邏輯。周大律師指稱, 在沒有上述查訊的情況下, 當梁審裁官考慮周可否即時終止與馮的合約定然沒有考慮有關因素, 而梁審裁官收到周的覆核書面陳詞也沒有在覆核期間調查上述事宜。

72. 周大律師指稱, 周曾向審裁處提供他的其他貨車燃油費收據以顯示每車程在折扣優惠下的燃油費, 但梁審裁官沒有考慮該等文件, 亦沒有將該等文件列為周的證物。再者, 周大律師指稱, 梁審裁官沒有在其口頭判詞及該理由書顯示她曾想及這一點, 繼而考慮馮會否為了大化其車資而要求/使用有折扣優惠的油卡(尤其是他曾以貨車司機身份替其他運輸公司工作而很有機會知悉油卡優惠的存在)或馮因非法燃油較折扣優惠下的燃油更便宜而沒有使用油卡並將非法燃油注入車輛。周大律師認為, 梁審裁官只指出周未能提供證人及/或文件證據證明其指稱,而就上述關鍵性事宜亦未有履行其查訊責任。周大律師亦認為, 基於梁審裁官未有履行上述查訊責任, 她不可能得出結論, 馮沒有員工財政風險。

73. 本席細心考慮周大律師的陳述, 認為這方面可能具有爭辯的理據。至於馮可能把非法燃油注入車輛的說法, 這是周的主張, 所以周就此負上舉證責任。雖然周沒有提供目擊證人的證供, 而梁審裁官認為周這方面的證供含糊籠統, 但正如周大律師所述, 上述第71(i)-(iv)點所提及的事宜可能構成案中的客觀事實或證據以促使梁審裁官執行其調查責任, 而梁審裁官應否從她已掌握的證據決定及如何進行調查, 及/或應否在調查後才考慮全盤證據而對事實加以推斷(以決定周指稱已將油卡交給馮使用及/或馮有否使用非法燃油是否屬實), 本席認為這是可爭辯的上訴理由。”

12.  On 10 March 2017, D2 filed Notice of Originating Motion to appeal against the DPO Order and DPO Review Order on the ground of appeal that the DPO erred in law by failing to discharge her statutory duty to investigate, and such lack of investigation gave rise to injustice in that a fair and proper determination of the claim could not be attained:

(a) in considering matters which might be relevant and material, the DPO disregarded evidence which should have been admissible such that she failed to discharge her statutory duty to investigate by making proper enquiry/finding as to whether such matters or evidence might constitute an objective finding of fact;

(b) in determining whether D2 did provide the Discount Cards to C and whether C used illegal fuel, the DPO failed to discharge her statutory duty to investigate by making proper inquiry/finding in respect of the following matters to assist her in determining on the balance of probabilities whether D2 did provide the Discount Cards to C:

(i) fuel costs per trip;

(ii) discount available to the Discount Card holder;

(iii) tunnels and road tolls per trip;

(iv) other costs and expenses per trip; and

(c) in discharging her statutory duty to investigate, the DPO failed to consider whether/how she should discharge such duty, and/or whether she should consider the whole of the evidence, the facts of the case and C’s financial risk upon her investigation of items (b)(i)-(iv) above.

13.  By the Notice of Originating Motion, D2 sought the following reliefs:

(a) C’s claim in LBTC1800/2015 and D2’s claim in LBTC3400/ 2015 be remitted to the Tribunal for a new hearing before another presiding officer;

(b) all Security previously paid into court by D2 be reinstated;

(c) costs of the trial and review before the DPO be remitted to the re-trial presiding officer for determination;

(d) C to pay costs of the leave application and of the appeal to D2;

(e) alternatively, costs of the leave application and of the appeal be remitted to the re-trial presiding officer for determination.

14.  On 19 May 2017, D2 filed his Supplemental Notice of Originating Motion, setting out the following additional grounds of appeal:

(a) the DPO erred in law by failing to discharge her statutory duty to investigate when during the trial D2 tendered to the Tribunal gas station receipts collected from his other truck drivers (“D2 Receipts”), but the DPO did not give such material evidence any consideration at all during the trial on 21-22 January 2016 (“Trial”):[2]

(b) the DPO should have given due consideration to the D2 Receipts before concluding (i) whether C was an employee or independent contractor and (ii) whether summary dismissal of C was justified in the circumstances;

(c) further, the DPO should have made proper inquiry into the following matters per trip after having considered the information available in the D2 Receipts, ie (i) fuel costs, (ii) discount available to the Discount Card holder, (iii) tunnels and road tolls, (iv) parking fees, (v) maintenance/repair costs, (vi) food/beverage expenses, and (vii) other costs and expenses (collectively, “Costs/Expenses”);

(d) in the circumstances, the DPO’s lack of investigation gave rise to material injustice such that a fair and proper determination of the claim could not be attained.

15.  In essence, D2 contended the DPO should have made proper enquiry into the Costs/Expenses before determining the Twin Issues.[3] Insofar as the grounds of appeal raised any financial consideration/risk for C, it went to the Twin Issues and not to the issue of whether or not there was an employer‑employee relationship as between C and D2 (“Employment Issue”) for leave had not been granted for D2 to appeal against the finding/conclusion that such employment relationship did exist (“Employment Finding”).

16.  D2’s appeal against the DPO Order and DPO Review Order (“Appeal”) came before me for hearing on 14 June 2017 (“Hearing”). Counsel for D2 and C were respectively Mr Chow and Ms Law.

V.  APPEAL: MISCELLANEOUS MATTERS

17.  Three matters were of note in relation to the Appeal. First, as explained in paragraph 15 above, this court by the Leave Judgment had not granted leave for D2 to appeal on the ground set out in paragraph 14(b)(i) above and/or against the Employment Finding. The then intended ground for which I granted leave to appeal was premised on Mr Chow’s then submission that “……, 甚至[C]及[D2]之間有僱傭關係[DPO]應積極查訊[D2]作為僱主是否有權可無須給予通知或代通知金而終止與[C]的僱傭合約 ……” (see paragraph 71 of the Leave Judgment and paragraph 11 above). In other words, in relation to paragraph 14(b) above, this court only granted leave to appeal on the ground in sub-paragraph (ii), ie the DPO should have given due consideration to the D2 Receipts before concluding whether summary dismissal of C was justified in the circumstances. As D2 could not appeal against the Employment Finding, the question/indicia of control and financial risk for the purpose of determining the Employment Issue (as explained in Poon Chau Nam v Yim Siu Cheung)[4] was irrelevant to the Appeal. For the purpose of the Appeal, the relevance of C’s financial risk was limited to what had been explained in paragraph 15 above.

18.  Perhaps in response to the mistaken ground of appeal in paragraph 14(b)(i) above, Ms Law in her written submissions made much play of the contention that C’s financial risk was never a live issue at the Trial for there was little dispute over most of the 11 or 14 factors/indicia (including the factor whether C had to bear financial risk) the DPO had considered in determining the Employment Issue. Ms Law submitted that C’s/D2’s statement and oral evidence suggested C did not have to bear financial risk (as noted in the DPO’s oral decisions and DPO Reasons), so it was unnecessary for the DPO to make extensive and detailed inquiry in respect of such question. It was said the main dispute on the Employment Issue was the question of control which, Ms Law submitted, the DPO did carefully canvass. Ms Law argued that to allow C to raise the question of financial risk on appeal would be tantamount to re‑opening an issue that had not been in dispute, which must be a matter of abuse of process and should not be allowed.

19.  In my view, such submissions reflected misunderstanding of the nature/scope of the Appeal. Since no leave was granted for appeal against the Employment Finding, the question of control and/or financial risk as factors/ indicia for determining the Employment Issue were irrelevant to the Appeal. The matter of C’s financial risk only pertained to the Twin Issues (see paragraph 15 above) which in turn would inform the debate on whether D2’s summary dismissal of C was justified. Indeed, at the Hearing, Ms Law no longer relied on paragraphs 8-11 of her written submissions on the subject. Hence, whether or not the DPO made careful/detailed enquiry on the question of control for the purpose of the Employment Issue was neither here nor there.

20.  Secondly, I did not grant leave for D2 to appeal against the DPO Order and DPO Review Order in respect of his claim for overpayment in LBTC3400/2015 (see paragraph 74-75 of the Leave Judgment). Indeed, such ground of appeal did not appear in the Notice of Originating Motion and Supplemental Notice of Originating Motion. So there was no basis for D2 to seek the relief in paragraph 13(a) above to have his claim in LBTC3400/2015 remitted to the Tribunal for a new hearing before another presiding officer.

21.  Thirdly, D2 asked for C’s claim in LBTC1800/2015 to be remitted to the Tribunal for a new hearing before another presiding officer should he succeed on the Appeal. In light of the true nature/scope of the Appeal which would not include any challenge against the Employment Finding, the relevant evidential foundation and factual findings by the DPO in this respect had not been disturbed, and likewise the awards in the DPO Order under the Items (A), (C) and (D) Claims as upheld by the DPO Review Order could not disturbed (see paragraphs 3 and 77 of the DPO Reasons). The outstanding matter on appeal was whether, notwithstanding the Employment Finding, D2 was entitled to summarily dismiss C without notice or payment in lieu of notice, and consequently whether C was entitled to the award for the Item (B) Claim in the DPO Order.

22.  In such circumstances, even if the Appeal were allowed by setting aside the DPO Order and DPO Review Order in respect of the award for the Item (B) Claim (ie payment in lieu of notice) in the sum of $34,041.83, and the Item (B) Claim were to be remitted to the Tribunal for re-trial, such re-trial on this limited issue must be made in the context or against the backdrop of the evidential foundations/findings in relation to the Employment Issue (including the Employment Finding). In such circumstances, it would be eminently suitable, or even necessary, for the Item (B) Claim (if the Appeal were allowed) to be remitted to the same DPO rather than to any other presiding officer for re-trial.

23.  Mr Chow submitted it would be better to let a new presiding officer re-consider the matter since witnesses’ credibility might be in issue. But D2’s wish for “fresh eyes” to look into the matter could not overcome the considerations in the above paragraph. In any event, if the Appeal were allowed, the DPO would have the benefit of the discussion in the Leave Judgment and this Judgment, and this court could, if it saw fit, give further guidance to the re-trial Tribunal. Section 35(1)(c) of the Labour Tribunal Ordinance Cap 25 (“LTO”) provides that “[on] an appeal for which it has granted leave under section 32, the Court of First Instance may - …… (c) remit the matter to the tribunal with such directions as it thinks fit, which may include a direction to the tribunal for a new hearing” (my emphasis).

VI.  LEGAL PRINCIPLES

24.  There is no dispute about the relevant legal principles. I shall rely on and adopt (but without repeating here) the principles set out in paragraphs 43-53 of the Leave Judgment. Ms Law further referred to James Manuel Ho & anor v Grand Pacific Vacation (Hong Kong) Limited,[5] which concerned an appeal against a decision of the Small Claims Tribunal. I have carefully considered such authority, but it appeared to reinforce and did not detract from the principles set out in the Leave Judgment.

VII.  DISCUSSION

25.  Mr Chow submitted the DPO erred in principle by adopting an adversarial approach to the Twin Issues, and found against D2 by simply disregarding his contentions which she viewed as being too vague (see paragraph 57 of the DPO Reasons) or by holding the burden of proof was not met since D2 failed to provide factual witnesses and/or documentary evidence on the subject (see paragraph 74 of the DPO Reasons).

26.  Mr Chow agreed the available evidence showed D2 could not remember or was vague as to when the Discount Cards were provided to C and how he instructed C to use such cards, but D2 was adamant he did provide C with 3 Discount Cards, and he argued there was objective circumstantial evidence before the DPO which were deserving of investigation by the DPO in exercise of her statutory duty and which in turn would enable inference to be drawn as to whether D2 did or did not provide the Discount Cards to C. Mr Chow argued the DPO should have assumed an active inquisitional role to make proper inquiry into relevant and material matters being the Costs/Expenses in paragraph 14(c) above.

27.  Mr Chow reminded it was common ground that C had to defray the Costs/Expenses out of what D2 paid him for each journey/trip. C claimed D2 paid him $2,400-$2,500 for single journey and $3,400-$3,500 for round trip (see paragraph 6 of the DPO Reasons). Mr Chow argued it would fly against commercial logic or common sense for C to work as truck driver for D2 if his Costs/Expenses substantially reduced his earnings per trip or even exceeded his earnings per trip such that he would not be able to achieve (a) reasonable living on his net earnings or (b) (as C alleged) monthly earnings of $34,041.83.[6] It was said proper inquiry/investigation of the Costs/Expenses (including fuel cost per trip with or without the benefit of discount under the Discount Cards) would reveal whether C’s net earnings per trip after deduction of the Costs/Expenses met the standard in (a) or (b) above. Mr Chow submitted this would amount to clear objective evidence that could inform the dispute of whether or not the Discount Cards had been provided, and in this respect fuel cost with or without discount might make a material difference.

28.  Mr Chow submitted the above was especially important when neither party adduced objective evidence on the issue:

(a) Although C denied D2 provided the Discount Cards to him, he did not provide any receipt from the gas stations he allegedly patronised (which he claimed were not the 3 gas stations that allegedly issued the 3 Discount Cards), and there was no evidence as to how much and how (eg by cash, credit card, etc) he paid the fuel cost. Indeed, C said he did not use any Discount Card, and D2 claimed “…… 周曾經問過兩間他持有油卡的油商, 即加德士及中石化, 但他沒有經過美孚, 得到的答案是馮並沒有在這兩間油商入油”.

(b) D2 could not say precisely when the Discount Cards were given to C or how he instructed C to use the Discount Cards (and he also did not adduce any eyewitness evidence or criminal record in relation to use of illegal fuel).

29.  Mr Chow submitted in view of the debate (known to the DPO) as to whether or not D2 provided the Discount Cards to C, without proper inquiry/investigation into the matters in paragraphs 26-27 above in the context explained in paragraph 28 above, the DPO had no basis to conclude in the DPO Reasons that (a) such debate was irrelevant and/or (b) D2 was not entitled to terminate the agreement and/or summarily dismiss C without notice or payment in lieu of notice. Mr Chow argued that proper inquiry/investigation of such matters would enlighten whether C could have made a reasonable living and/or earned $34,041.83/month if he had to pay the Costs/ Expenses on the basis of regular-priced fuel cost without any discount, and if the objective inference was that C could not have done so without using the Discount Cards to buy discounted fuel, it would inform the debate as to whether he used cheap illegal fuel in order to adjust down the Costs/Expenses to achieve reasonable living and/or claimed monthly earnings of $34,041.83. On such basis and quite irrespective of the employment relationship between C and D2, Mr Chow contended proper inquiry/investigation would have revealed quite objectively whether D2’s stance on the Twin Issues could be supported, which in turn would show whether summary dismissal of C was justified. It was said use of illegal fuel would have been an obvious reason for summary dismissal, but failure to use the Discount Cards provided to C for refuelling at specified gas stations also could not have been ignored as it must have been commercially obvious that these gas stations favoured D2 with discount on fuel cost due to the volume of business that came their way from D2’s fleet of lorries, and C’s failure to patronise these gas stations for refuelling would have jeopardised D2’s entitlement to substantial discount for the benefit of his other truck drivers.

30.  Mr Chow further submitted the DPO erred in law by failing to discharge her statutory duty to investigate during the Trial when she did not receive/consider material evidence tendered by D2 (ie the D2 Receipts[7] that D2 collected from his other truck drivers) as shown by D2’s evidence in the trial transcript of 21 January 2016:[8]

“問： 好嘞，咁你話佢係冇入到嗰啲油站油，入咗街邊油，咁樣你點知呀？

答： 要有飛㗎嘛，個個有飛吖嘛，嗰啲飛…

問： 唔係呀，你點知道佢入街邊油呀？

答： 架車呢，好大架，你有兩條街喥呢，你都望到架車，行到邊，係人都睇到㗎嘞。呢啲就係我伙記嘅油飛，入完油佢有張收條㗎嘛，咁佢冇可能去第二度入，點解呢，第二度冇個優惠，我每1升油就回5鈫，佢好叻㗎。

問： 我係問你呀，…

答： 佢好叻嘅。

問： 你聽住喇，你聽住個問題喇，人哋問你問題，你聽住人哋問你乜嘢，你答嗰樣嘢。

答： 唔。

問： 而家係問你呀，你話見- -話即係馮生入街道油，咁樣呢，你點知道佢係入街邊油呀，有冇人見到呀？

答: 我打電話呢間問過, 個車牌佢有電腦㗎嘛, 你幾時入嘅, 佢隻手指一㧻落去就知嘞, 呢架車有無入過佢㗎, 佢話無, 今時今日電腦呢, 就油站都有嘅, 幾個月內呢, 你講個車牌123, 咁佢話123無嚟入過油呀, 可以咁講, 你同佢熟呢, 佢肯同你¸ 話冇呀, 長期冇呀。” (my emphasis)

31.  Mr Chow argued that had the DPO considered the D2 Receipts (as she should have done) she would have been made aware that the discount offered by the Discount Cards was substantial. Mr Chow submitted that if the other truck drivers working for D2 also had gas station discount cards, it raised questions as to (a) whether C (who had admittedly worked as a truck driver for other companies in the past) should have heard of gas station discount cards, and (b) why C was not provided with the Discount Cards as he alleged. If C had heard of gas station discount cards and/or knew fellow truck drivers had gas station discount cards, it made little sense for D2 not to provide such Discount Cards to C or for C not to ask for them even if (as C alleged) D2 had not provided them. After all, C’s earnings per trip would have been swelled by the discount on fuel costs. Mr Chow submitted in such context the DPO should have investigated/clarified whether C’s alleged disassociation with and non-use of any Discount Card was due to the fact (i) C was not provided with any Discount Card as he alleged or (ii) despite instructions to use the Discount Card(s) as provided C did not do so but adopted other means to adjust down the Costs/Expenses such as by using illegal fuel as D2 alleged, which matters would be material for determining whether D2 was entitled to dismiss C without notice or payment in lieu of notice under section 9 of the EO. Mr Chow therefore submitted that even though “…… [D2]指[C]把非法燃油注入他的車輛, 但並無刑事紀錄支持有關說法, [D2]也沒有提供證人指曾目擊[C]這樣做 ……” (see paragraph 74 of the DPO Reasons), the lack of direct eyewitness evidence and/or criminal records would not have been a complete answer as there was available objective circumstantial evidence before the DPO to cause her to inquire/investigate whether C was given the Discount Cards that he failed to use, which if so found would lend weight to D2’s contention that C had used illegal fuel.

32.  On such basis, Mr Chow argued the DPO’s failure to (a) take relevant/material matters into account and (b) discharge her statutory duty to investigate gave rise to injustice such that fair/proper determination of the claim could not be attained. Further or alternatively, it was said the DPO erred in principle by failing to give adequate reasons or at all in her oral decisions and DPO Reasons to demonstrate she had considered these relevant/material matters.

33.  On the other hand, Ms Law made 3 points in opposition:

(a) the 7 items of Costs/Expenses were not relevant/material to C’s claim;

(b) the DPO did discharge her statutory duty to investigate;

(c) any lack of investigation by the DPO (which was denied) did not give rise to any injustice.

34.  In relation to the 1^st point in paragraph 33(a) above, Ms Law suggested the 7 items of Costs/Expenses were not relevant/material to C’s claim because the DPO, after having considered the evidence, concluded D2 failed to prove he provided the 3 Discount Cards to C or he required C to patronise 3 particular gas stations,[9] hence it was irrelevant/unnecessary for the DPO to make further inquiries as to whether such Discount Cards actually provided the cheapest fuel. Ms Law submitted that even if they did it, it would not have led to the conclusion that D2 had given such Discount Cards to C. Ms Law argued it was not that the DPO disbelieved the Discount Cards did provide the cheapest fuel; rather it was not an issue which the DPO had to determine.

35.  Ms Law further submitted the Costs/Expenses were also not relevant to whether C used illegal fuel because the DPO found D2 failed to prove he made specific refuelling requirement or C used illegal fuel on the basis there was no criminal record or eyewitness evidence that supported D2’s allegation (as evident from the DPO’s oral decisions and DPO Reasons). Ms Law submitted D2’s allegation that C used illegal fuel was based primarily on his case that he had provided the 3 Discount Cards to C, but D2 failed to prove such allegation.

36.  Ms Law went on to say there was nothing in D2’s criticism that the DPO failed to take into account the D2 Receipts (all subsequent to D2’s termination of C’s employment on 18 March 2015), which receipts at most showed the Discount Cards would provide cheaper fuel, but which were irrelevant to the Twin Issues that the DPO, who had given clear reasons for her findings (see paragraphs 34-35 above), had to determine.

37.  Ms Law further suggested the question of financial risk was in any event not a live issue at the Trial, so it would be unfair for D2 to attempt to re-open the issue in the Appeal. Ms Law submitted it was also never D2’s case at the Trial, whether in his statement or oral evidence, that (contrary to his primary case that there was no employment relationship between him and C) he was entitled to summarily dismiss C without notice or payment in lieu of notice because C used illegal fuel, and D2 only raised this as an alternative case for the first time in his written submissions for the review. Anyway, the DPO had given clear reasons for her finding that D2 failed to prove C used illegal fuel.

38.  By reason of the above matters, Ms Law submitted the 7 items of Costs/Expenses were neither relevant nor material such that the DPO was required to exercise her duty to investigate.

39.  I am not persuaded by Ms Law’s arguments. Whilst I have no quarrel that the DPO came to her conclusions for the reasons set out in paragraphs 34-35 above, the whole thrust of D2’s contention was that the DPO should have made inquiry/investigation into the Costs/Expenses before coming into her conclusions. This left Ms Law’s argument that these matters were not relevant. Such suggestion appeared to rest on (a) the contention that D2 failed to prove he provided the Discount Cards to C and (b) the belief that D2’s case on the 3 Discount Cards was merely to show whether they provided the cheapest fuel. In my view, such submissions reflected a misunderstanding of D2’s contentions. It appeared Ms Law’s understanding of D2’s argument was that if it was shown D2 gave the Discount Cards to C and the Discount Cards provided the cheapest fuel, then C must have used illegal fuel otherwise the Costs/Expenses per trip might have exceeded his earnings. But in fact D2’s complaint about the DPO’s failure to look into the Costs/ Expenses was to undermine the DPO’s conclusion that D2 failed to prove the Discount Cards were provided to C, and it was not D2’s case about the Discount Cards that they would provide the cheapest fuel.

40.  The DPO did not have to decide whether the Discount Cards provided the cheapest fuel, but in a situation where D2 and C took contradictory positions on the Twin Issues (which Ms Law accepted were relevant issues, and which in my view if properly investigated might show whether summary dismissal was justified) and without direct supporting/ countervailing evidence for their respective assertions, the Costs/Expenses might serve to provide objective circumstantial evidence which if taken into account might aid determination of the Twin Issues. It would not reflect commercial logic or common sense for an employee to work for net earnings that could not support a reasonable living or net earnings that he claimed he made, and inquiry into the Costs/Expenses per trip (with and without discount for fuel cost) as compared with the known gross payments by D2 to C per trip might be telling.

41.  Indeed, this could be illustrated by Ms Law’s own written submissions. Ms Law submitted the D2 Receipts showed that before discount the most expensive fuel was $2,263 per trip. This certainly did not exceed C’s earnings per trip at $2,400-$2,500 for single journey and $3,400-$3,500 per round trip. But for this example, even putting aside (apart from the fuel cost) other items of the Costs/Expenses, C would have been earning $137-$237 for single journey and $1,137-$1,237 for round trip if there was no discount for fuel cost. There was no evidence as to C’s number of single journeys and/or round trips per month, but it would be fair to consider there would be a mix of both types of journeys/trips. There was also no evidence as to how many days C worked in a month. On the basis of C’s net earnings after deducting fuel cost (without discount) and other Costs/Expenses (eg tunnel/road tolls, parking fees etc) on mixed single journeys and round trips even for all days in a month, it was still not easy to see how C could have made total net earnings of $34,041.83 per month. If proper inquiry had been made as to the Costs/ Expenses, it might have revealed whether the fuel discount would have been essential for making such net earnings per month, and since C denied he was provided any Discount Card and he did not refuel at the 3 particular gas stations that allegedly issued the Discount Cards, then depending on the result of the inquiry/investigation, it might have lent inferential weight to D2’s suggestion that C used alternative cheap fuel (ie illegal fuel) to sustain his net monthly earnings as found by the DPO.

42.  As regards Ms Law’s complaint that the matter of summary dismissal was not a live issue at the Trial but was raised by D2 as an alternative case for the review, it was evident from the DPO’s oral decisions and the DPO Reasons that the Twin Issues, which Ms Law accepted were relevant questions to be determined by the DPO, were already before the DPO at the Trial. Bearing in mind that under section 20(3) of the LTO the DPO was under a duty to “investigate any matter which [she] may consider relevant to the claim, whether or not it has been raised by a party” (my emphasis), it would have been incumbent upon the DPO upon making the Employment Finding to go on and consider whether D2’s summary termination of the agreement was justified, especially when the issues of compliance with D2’s instructions and/or use of illegal fuel had been raised.

43.  In all the circumstances, I am unable to accept the 7 items of Costs/Expenses were irrelevant/immaterial as Ms Law suggested.

44.  In relation to the 2^nd point in paragraph 33(b) above, Ms Law submitted that in any event the DPO did discharge her statutory duty to investigate when she determined the Twin Issues. She suggested that since C denied such allegations in his statement/oral evidence, it was for D2 to substantiate his contention. Ms Law submitted the DPO made extensive inquiry with D2 as to whether he provided the Discount Cards to C or told C to go to particular gas stations,[10] and the Trial transcript showed the DPO continued to follow up several times when D2 did not immediately answer whether he told C to use the 3 particular gas stations. After D2 answered in the affirmative, the DPO followed up by asking when he gave the Discount Cards to C and told C to go to 3 particular gas stations.[11] At first D2 could not say when, but after the DPO asked the question several times D2 vaguely answered he told C during the first 1-2 months of work but later said there was no need to teach C who was an experienced driver. The DPO then inquired as to how D2 told P,[12] and D2 said he told C to go to the 3 particular gas stations and the 3 Discount Cards were placed at the front of C’s truck where C could see. But when the DPO pressed again, D2 later stated  he could not remember how he had told C as it was a long time ago.[13] Ms Law submitted D2’s evidence in this regard was inconsistent and self‑contradictory.

45.  Ms Law further submitted the DPO also made extensive inquiry with D2 before determining whether C used illegal fuel.[14] Ms Law noted the DPO asked D2 several times how he knew C used illegal fuel, including whether anyone had seen C using the same, and D2 answered he had checked with the gas stations by telephone. The DPO pressed further by asking which gas stations D2 checked, and again asked whether anyone had seen C using illegal fuel.

46.  By making the above inquiry, Ms Law submitted the DPO had already discharged her statutory duty to investigate when determining the Twin Issues. Ms Law argued there was no duty on the part of the DPO to summons witnesses to fill the gaps in D2’s evidence, and any further inquiry might amount to the DPO taking over the role of an advocate for C in cross‑examining D2. Ms Law submitted that since the DPO’s oral decisions and DPO Reasons showed she had thoroughly considered the Twin Issues and gave clear reasons for her findings which were based upon assessment of witness’ credibility and weight of the evidence, this court should not intervene in such matters which were essentially for the DPO.

47.  Again, I am unable to agree with Ms Law’s submissions. Whilst I have no doubt the DPO had made some inquiry/investigation with the witnesses, ie C and D2, it was equally clear from the DPO’s oral decisions and DPO Reasons there was no investigation into the objective evidence as to C’s gross earnings and Costs/Expenses to test the vitality of C’s allegations as to his net monthly earnings, which would have provided an objective foil to evaluate the respective evidential allegations by C and D2 on the Twin Issues. In carrying out such investigation, there was no call for the DPO to subpoena witnesses to help D2 fill in any evidential gaps or to cross-examine D2 as an advocate for C. Rather, the exercise was to look for an objective basis to evaluate and assess the opposite assertions by C and D2 on the Twin Issues. I accept the allegation that C used illegal fuel was a serious one. Ms Law submitted it behoved D2 to adduce cogent/compelling evidence, but in my view, how to assess the evidence and what weight should be placed on the evidence must come after proper inquiry and investigation of relevant facts and matters. I find the objective factors/considerations advocated by Mr Chow begged for consideration, and they should have been attended to by the DPO.

48.  In all the circumstances, I am not persuaded the DPO had sufficiently discharged her duty to investigate. Since it was C’s own contention that D2 did not provide him with any Discount Card, if the DPO, after having considered the Costs/Expenses per journey/trip came to the conclusion it was not probable that C did not have access to cheaper fuel, there might have been objective basis to reasonably infer C had alternative cheap source of fuel (since he claimed not to have and/or not to have used the Discount Cards) which would have led to further inquiry and investigation as to whether illegal fuel might have been used.

49.  In relation to the 3^rd point in paragraph 33(c) above, Ms Law suggested any lack of investigation by the DPO did not give rise to injustice. However, in making such argument, Ms Law harked back to the Poon Chau Nam indicia for the Employment Issue, and suggested the DPO adopted the correct approach by examining all features of the relationship between C and D2 with focus on the main dispute over the question of control. Ms Law submitted that even if the Costs/Expenses were relevant to the disputed issues and the DPO made an error by failing to investigate into them, such failure would have little or no significant bearing on the Employment Finding, or to put it in another way, any finding that D2 did provide the Discount Cards to C would only have strengthened the DPO’s view that D2 had certain control over C who did not have to bear any financial risk (if this was a pertinent matter at all) which would have supported the Employment Finding. On such basis, Ms Law submitted that even if the DPO failed to discharge her statutory duty to investigate, such failure did not give rise to injustice and D2 would not benefit from a re-trial.

50.  But in fact there was no appeal against the Employment Finding. Rather the whole issue for the Appeal was whether D2 could summarily dismiss C without notice or payment in lieu of notice. On this simple basis, the contentions in the above paragraph premised on proper consideration of the indicia for the Employment Issue upon the approach advocated in Poon Chau Nam fell away.

VIII. CONCLUSION

51.  In all the circumstances, the DPO Order in respect of award for (a) the Item (B) Claim for payment in lieu of notice in the sum of $34,041.83 with interest thereon and (b) costs of LBTC 1800/2015 in relation to the claim/ award in (a) above be set aside. Likewise, the DPO Review Order that upheld the DPO Order in these respects is also set aside. The Item (B) Claim is remitted to the Tribunal before the same DPO for re-trial with further inquiry and investigation as aforesaid.

52.  D2 asked for all Security he previously paid into court by D2 in the sum of $72,893.45 (paid out to C pursuant to the DPO Review Order) be reinstated. But other than the sum of $34,041.83 awarded under the Item (B) Claim, Mr Chow did not identify for this court the amount of interest and/or amount of costs attributable to this head of claim out of the Security sum of $72,893.45 paid by D2. In the circumstances, I order that $34,041.83 out of the Security that was paid by D2 and paid out to C pursuant to the DPO Review Order be reinstated, and C do pay the same into the Tribunal within 21 days. I leave it to the DPO to decide whether to reinstate any further Security that would reflect interest and/or costs in respect of the Item (B) Claim.

53.  I further order that costs of the trial and review before the DPO in respect of the Item (B) Claim for payment in lieu of notice be remitted to the re-trial DPO for determination.

54.  As for costs of the Appeal, there is no reason why costs should not follow event. Ms Law suggested there should be no order as to costs by referring to Ali Shoukat v Hang Seng Bank Limited.[15] In that case, DHCJ To said as follows:

“21. Though costs is a matter of discretion for the court, appeals from decisions of the [Tribunal] involving an unrepresented party often raise difficult questions of costs. The Appellant is wholly successful and was utterly without fault. On the other hand, but for the Presiding Officer falling into error, the Claimant would have his claim dismissed without costs. Cases of this kind often attract great sympathy from the courts. An employee who files an employment claim, succeeds before the [Tribunal] or the Minor Employment Claims Adjudication Board (the “MECAB”), but loses on appeal will end up with the consequence of a costs order in the appeal which is far in excess of his claim. The same could happen to an employer of a very small business who losses an appeal by a legally aided employee. Their only hope under such circumstances is that the appellate court will tamper justice with mercy.

22. I think appeals from the [Tribunal] and the MECAB stands out from other civil litigation as a special class of their own. The purpose of the [Tribunal] and the MECAB is to provide a speedy, efficient and cheap means of adjudication of employment claims. Usually, the disputes are resolved with no order as to costs. If costs are awarded, they are not substantial as the parties are not legally represented. Litigants have a reasonable expectation that their disputes will be resolved on a low-costs basis both at first instance and on appeal. In my view, this benefit of low-cost employment dispute adjudication should be extended to appellate proceedings if in all the circumstances it is just to do so. However, it is impossible to set out the circumstances when it would be just to exercise the discretion of making no order as to costs as each case depends on facts of its own. I think the following considerations should usually be taken into account in the exercise of this discretion. The primary consideration is whether the unsuccessful party has been guilty of unmeritorious conduct in the litigation both at first instance and on appeal.Of secondary importance are whether the unsuccessful party is legally represented in the appeal, whether he is the appellant or the respondent and balance of hardship the order of costs may have to the parties.

23. If the unsuccessful party to an appeal has not put forward a claim or a defence in bad faith and has not misbehaved himself in the conduct of the litigation, the appellate court should be slow in ordering costs of the appeal against him. Bad faith in this context means putting forward a false, frivolous or vexatious claim or defence and giving false evidence which is disbelieved. On the other hand, if he misled the Presiding Officer and obtained a judgment in his favour which led to the appeal, there is no reason why he should not bear the consequence of costs, even if such costs far exceeds his claim or the value of the claim against him. He only has himself to blame for his misfortune. Generally, the discretion to make no order as to costs should lie in favour of the unsuccessful party who cannot afford legal representation. This is because if a party is legally represented on appeal, he knows of the consequence of costs and he no longer litigates with the expectation of low-costs adjudication. Likewise, the discretion should also be exercised in favour of the unrepresented respondent as he is a passive party to an appeal, provided that he has not been guilty of any unmeritorious conduct in the litigation.” (emphasis added)

55.  Here, C had the benefit of legal representation for the Appeal. Further, he was not a passive party in the Appeal. He had chosen to uphold the DPO Order and DPO Review Order on arguments that did not find favour with this court. In the circumstances, he must be taken to have been aware of the usual consequences of litigation and could not have expected “low-costs adjudication”. Having considered all the circumstances, I grant a costs order nisi that C shall pay D2 costs of and occasioned by the Appeal to be taxed if not agreed.