THE HONG KONG & KOWLOON PET MEDICAL CENTRE LTD v. SUSAN ANN ROBERTS

DCCJ5393/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5393 OF 2006

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D E C I S I O N

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1.  The plaintiff claims against the defendant after the re-amendment of the Statement of Claim on 12 January 2007 for damages due to the defendant’s repudiation of the contract of employment.

2.  The plaintiff took out a summons for Order 14 summary judgment on 29 January this year.  The application came before Deputy Judge Wahab on 26 April 2007.  At the hearing, the Judge Wahab raised a point on jurisdiction of the District Court in the plaintiff’s claim, as it involved a claim under an employment contract that, in the consideration of Judge Wahab, the Labour Tribunal had exclusive jurisdiction.  He adjourned the summons sine die with liberty to restore. 

3.  The application was restored and the parties made a submission on jurisdiction of the District Court in the plaintiff’s claim today before me. 

4.  To decide the issue, one has to consider the Labour Tribunal Ordinance, Cap. 25 section 7.  It provides that:

“	S.7	The jurisdiction of the tribunal.
		(1).	The tribunal shall have jurisdiction to inquire and to hear and determine the claim specified in the schedule.
		(2).	Save as is provided in this Ordinance, no claim within the jurisdiction of the tribunal shall be actionable in any court in Hong Kong.”

The schedule stated:

“	(1)	A claim for a sum of money which arises from –
		(a)	the breach of a term whether express or implied, of a contract of employment, whether for performance in Hong Kong or under a contract to which Contracts for Employment Outside Hong Kong Ordinance (Cap. 78) applies.”

Subsections (aa) and (b) do not really affect these proceedings. 

5.  It is the submission of Mr Wong, counsel for the plaintiff, that the plaintiff’s claim is based on the fact that the defendant had sent a letter on 26 October 2006, giving notice to the plaintiff that the contract of employment was no longer binding on her because the plaintiff had wrongfully repudiated the employment agreement.  He argued that the defendant had wrongfully repudiated the contract on the pretext that the plaintiff had failed to provide work to her on 17 October 2006, which the plaintiff denied.  And even if, according to Mr Wong, that it was so, it was not serious enough to amount to a repudiatory breach.  The defendant’s conduct by sending out the letter of termination therefore amounted to a repudiatory breach.  Mr Wong further argued the defendant failed to raise the jurisdiction point in the amended defence filed on 23 January 2007. 

6.  In answer to the plaintiff’s re-amended Statement of Claim and deleting the two injunctions it was seeking in the original Statement of Claim against the defendant, Mr Wong submitted that the Labour Tribunal only has the jurisdiction where there was a breach of a term expressed or implied of a contract of employment.  As the plaintiff is not claiming against the defendant for her refusal to work, which would amount to a breach of a term in the employment agreement, the plaintiff’s claim does not fall into the exclusive jurisdiction of the Labour Tribunal.

7.  I find Mr Wong’s argument difficult to accept.  The plaintiff’s claim is undisputedly based on the employment agreement.  The defendant’s repudiation is also based on the terms of the employment agreement whereby, she was contracted to start work on 17 October 2006.  She repudiated the contract, rightly or wrongly, on the basis that the plaintiff failed to inform her or allow her to commence work on 17 October 2006.  She may or may not have sufficient grounds to serve the letter of Notice of Repudiation, but it is undeniable that she served that letter based on the contract of employment and based on the terms of the contract of employment, which stipulated that her contract was to commence on 17 October 2006. 

8.  The plaintiff’s claim, on the other hand, is also based on the employment agreement.  It was an agreement that set out in its terms the date of commencement, the salary and other benefits of the employee, the duties of the employee, including the terms on premature termination of the agreement e.t.c.

9.  As Saw J, held in paragraph 16 of his judgment in the case of Glock (H.K.) Limited v Brauner Wilhelm [2004] HCA 2865, date of judgment 31 May 2007:

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It is apparent from the cases cited to me that the Labour Tribunal is the jurisdiction in which proceedings must be commenced.  In the cases cited above both at the First Instance and in the Court of Appeal the approach taken was to look at the reality of the dispute stripped of the technicalities employed in the pleadings.  If the reality was that the dispute was a liquidated or unliquidated claim for damages arising out of an express or implied term in a contract of employment then the dispute must be commenced in the Labour Tribunal.  That is precisely what the particulars pleaded in the Amended Statement of Claim in the instant appeal amount to.”

10.  It is inconceivable to treat the plaintiff’s claim not arising out of an express or an implied term in a contract of employment, when the plaintiff is claiming against the defendant for damages for her breach of the agreement.  The plaintiff’s claim is for damages based on the terms of employment, including the salary set out in the agreement and the length of the employment term.  It is a “liquidated or unliquidated” claim for breach of a contract which should be commenced in the Labour Tribunal. 

11.  I therefore accept Mr Chan’s submission that the dispute must commence in the Labour Tribunal, unless, of course, the Labour Tribunal should decline jurisdiction under section 10 of the Ordinance and transfer it to either the District Court or the High Court.

12.  For the aforesaid reasons I would accept the suggestion of the defendant.  There is, of course, no application to strike out, but on the other hand, as I find there is no jurisdiction for the District Court to hear the plaintiff’s claim, we cannot proceed any further. 

(Discussion re jurisdiction and costs with counsel)

13.  The application is adjourned sine die.  So far as the costs is concerned, the costs of today’s hearing will be awarded to the defendant in any event, to be taxed if not agreed with certificate for counsel.  The costs of the last hearing on 26 April 2007 shall be costs in the cause.