VANTAGE CAPITAL MARKETS HK LTD v. SALLES ANTOINE PAUL BENJAMIN

HCLA 18/2025

[2025] HKCFI 3516

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 18 OF 2025

(ON APPEAL FROM LABOUR TRIBUNAL

CLAIM NO 3059 OF 2024)

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BETWEEN

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DECISION

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1.  This is the application of the Defendant (“Employee”) for leave to appeal under s.32 of the Labour Tribunal Ordinance, Cap 25 (“LTO”), against the decision of the Labour Tribunal (“Tribunal”) made on 29 April 2025 (“Decision”) by which it declined jurisdiction and transferred the Claim of the Claimant (“Employer”) and the Employee’s Counterclaim to the Court of First Instance (“CFI”).

2.  Pursuant to s.32 of the LTO, a party dissatisfied with an award, order, or determination of the Tribunal may apply to the CFI for leave to appeal on the ground that the award, order, or determination is (1) erroneous in point of law, or (2) outside the jurisdiction of the Tribunal.

Issues

3.  In support of this application, Mr Parker SC, who appeared for the Employee, contends that the Decision was based on 3 errors of law (I shall refer to them as Ground (1) to Ground (3)) :

(1) The Tribunal failed to appreciate (alternatively to give any sufficient weight to) the prejudice caused to the Employee by reason of the Employer’s belated application to transfer the proceedings to the CFI. The trial dates had already been set down to take place three weeks later, rendering the transfer application in substance an abuse. The abuse was particularly egregious in light of the fact that both the Labour Tribunal Action and the High Court Action (defined below), were commenced by the Employer on the exact same facts. The only difference was in the formulation of the Employer’s causes of action.

(2) The Tribunal failed to consider the effect of s.32(1) of the Employment Ordinance, Cap 57 (“EO”), for which there is binding Court of Appeal authority holding that an employer may not rely on a set-off to deprive the employee temporarily of the right to payment of sums due to him until the final resolution of the employer’s claim for unliquidated damages against the employee for bad or negligent work.

(3) The Tribunal erred in failing to consider the exclusive jurisdiction of the Tribunal over contractual claims: s.7 and para 1 of the Schedule of the LTO – and the legislative policy reasons for conferring such exclusive jurisdiction – pursuant to which the only forum before which the Employee’s Counterclaim could be pursued was the Tribunal. The delay and prejudice caused by the Employer’s decision to pursue non-contractual claims against the Employee should not have undercut the protection intended to be conferred on the Employee under the statutory framework.

Background

4.  This court was informed that the Tribunal gave oral reasons for the Decision on 29 April 2025, as well as for refusing the Employee’s application to review the Decision on 23 May 2025. However, on 22 July 2025, the Tribunal handed down the Reasons for Decision for Review (“Reasons”).

5.  The material facts had been set out in [1]-[19] of the Reasons and need not be repeated. For the present purpose, I would gratefully adopt with modifications a succinct summary of the facts provided by Mr Parker as follows.

6.  The Employer was (and is) a financial broker and advisor. The Employee served as Global Head of MSCI Trading and Head of the Asia Ex-Japan Delta One Desk (“Desk”).

7.  The relevant terms of employment were set out in an employment agreement dated 26 March 2020 (“Employment Agreement”), which contained the following material clauses :

(1) Clause 6.1: The Employee’s salary was US$1,000,000 per annum beginning 1 April 2020, payable in 12 equal instalments by the end of each month.

(2) Clause 6.2: From 1 April 2020, “the Desk and Relevant Desks will be allocated to Desk Profit Pool from their respective desks net revenues … The Desk Profit Pool and Desk Net Revenue will be … paid at the end of each three months following each quarter.”

(3) Clause 6.3: In the event that the Desk’s benchmark revenue in a financial year exceeds a certain benchmark, the Desk Profit Pool shall be allocated an uplift for that year.

(4) Clause 6.5: “[The Employee] is entitled to payments under clauses 6.2 and 6.3 only if you are employed by the company and not under notice to terminate (whether notice is given by you or by us) at the time that the relevant payment would be paid under this agreement. In the event you become under notice of termination within three months of any payment under 6.2 and 6.3, that payment shall immediately become a debt which is due, owing and repayable by you to the Company and recoverable as a debt.”

(5) Clause 19.2: The Employment Agreement may only be terminated by either party giving written notice to the other party.

8.  On 12 March 2024, the Employer commenced an investigation into the Employee concerning a suspected breach of proprietary trading rules. A disciplinary hearing was held on 9 April 2024, which culminated in a disciplinary decision dated 18 April 2024, which found that the allegations of prohibited proprietary trading were established.

9.  On 21 March 2024, the Employer offered to enter into a new employment agreement with the Employee at the same basic salary of US$1,000,000 per annum. The Employee did not sign this new employment agreement.

10.  On 19 April 2024, the Employer gave the Employee written notice to terminate in accordance with clause 19.2 of the Employment Agreement. The last day of his employment was to fall on 30 September 2024.

11.  On 20 August 2024, the Employer commenced proceedings before the Tribunal (LBTC 3059/2024) (“Labour Tribunal Action”). The Claim seeks a total of HK$34,854,157 comprising of (a) alleged loss from rogue trading in breach of contract and code of conduct; (b) alleged overpayment of disentitled bonuses; and (c) wages allegedly due in lieu of notice.

12.  The kernel of the Claim is for loss said to be caused by “rogue trading” on the part of the Employee. The Employer alleges that: “the [Employer] incurred a series of losses from the [Employee’s] rogue trading in a series of equity derivative contracts in the [Employer’s] name between 4 to 11 March 2024 which he concealed from the [Employer]. The [Employee’s] conduct amounted to trading on a proprietary basis, effectively putting at risk the [Employer’s] capital”.

13.  On 5 September 2024, the Employee filed a defence. On 4 November 2024, a Counterclaim was raised by the Employee, seeking a total of HK$41,720,236.46 comprising of (a) wrongful deduction of wages; (b) unpaid bonuses; (c) annual leave pay; (d) deficit allocation; and (e) deferral of uncollected revenue. Thereafter a number of pleadings, statements and replies were filed between November 2024 to February 2025.

14.  On 31 March 2025, over 7 months after bringing the Labour Tribunal Action, the Employer commenced a writ action in the High Court (HCA 653/2025) (“High Court Action”) relying on the same factual background. In addition to seeking contractual damages, the later Action included additional causes of action in negligence, deceit and restitution. The writ was served on 14 April 2025.

15.  The Labour Tribunal Action was set down for trial over three days from 20 May 2025 to 23 May 2025. On 29 April 2025, at the PTR before the Tribunal, the Employer applied to transfer the case to the High Court pursuant to s.10 of the LTO. The transfer application was foreshadowed in a letter sent by the Employer to the Tribunal dated 10 April 2025.

16.  On 30 April 2025, the Employee took out an application for review of the Decision. On 23 May 2025, at the review hearing, the Tribunal dismissed the Employee’s application for review. On 22 July 2025, the Tribunal handed down the Reasons.

Analysis

17.  In considering this application, the court will have to be satisfied that (a) the intended grounds of appeal are genuine grounds based on errors of law; and (b) there is an arguable ground of appeal: Lo Wai Keung v Hannover Ruck SE [2024] HKCFI 2032, [3].

Ground (1)

18.  To begin with, I am unable to agree that the Tribunal was unaware of the potential prejudice of the transfer application to the Employee. Clearly, as shown by the Reasons, the Tribunal was aware of the facts of the case, including the filing of the High Court Action and the fact that the two Actions were based on “the same factual basis” (Reasons, [40]).

19.  In [43] of the Reasons, the Tribunal referred to the Employee’s argument that the late transfer of the Labour Tribunal Action was prejudicial to him. However, the tribunal took the view that such delay might be adequately compensated with costs.

20.  Although misgivings have been expressed by the Employee about the duplicity of proceedings, it cannot be disputed that the causes of action advanced by the Employer in the High Court Action were outside the jurisdiction of the Tribunal. Therefore, there can be no legitimate complaint that bringing the High Court Action was, per se, an abuse of process. It should be said that the Employee did not dispute the transfer of the Employer’s Claim before the Tribunal to the High Court and be consolidated with the High Court Action. The Employee’s objection rested with the transfer of his Counterclaim to the High Court together with the Employer’s Claim (Reasons, [25]).

21.  The central element of the Reasons was the avoidance of inconsistent findings (Reasons, [40]) :

“… I am of the view that the claims and counterclaims are on the same factual basis. It is clear that the High Court and this Tribunal would have to determine whether the allegation of negligence of the Defendant was proved. If the Defendant’s counterclaim was not transferred, there would be two sets of proceedings carrying on in parallel trying on issues that are in common and there would be the risk of leading to inconsistent rulings arising from the same set of factual evidence in two jurisdictions.”

22.  The Tribunal had a wide and unfettered discretion to decline jurisdiction and transfer the claim before it to the High Court (see Archambaud v Sino Communication Holding Ltd [1982] HKC 339). Avoidance of inconsistent findings was a legitimate consideration in the exercise of the Tribunal’s discretion. It has not been demonstrated that the exercise of discretion was plainly wrong. I am unable to see any point of law having been properly raised under Ground (1). This is a common flaw with all the Grounds advanced by the Employee. Even if I were wrong, Ground (1) is not reasonably arguable.

23.  In his viva voce submissions, Mr Parker contends that the Tribunal had misunderstood the Claim and Counterclaim as arising from the same factual basis. He submitted that the constituents of the Counterclaims are based on simple factual matters and the proper construction of the provisions of the Employment Agreement, and are quite separated from whether the Employee is liable for rogue trading alleged by the Employer.

24.  To begin with, this submission does not fall within any of the Grounds before the court. Secondly, it is right that the Claim and Counterclaim arose from the same set of facts. Thirdly, I do not believe that there is a clear separation between the respective cases of the Employer and Employee. The Employee’s case is disputed by the Employer. It is a central element of that dispute that the Employee’s contract of employment was rightfully termination with the consequence of the application of Clause 6.5. On the other hand, the Employee says that there was no rogue trading and the termination was an excuse not to pay what is due to him by the Employer. I cannot see how the Counterclaim can be resolved in the Tribunal without at least some of issues revisited in the High Court if separate proceedings are maintained.

25.  Finally, the Employee may avail himself with the O14, r5 procedure in the High Court if he takes the view that his Counterclaim or part of it is clear cut.

Ground (2)

26.  The Tribunal was clearly alive to s.32 of the EO as well as the CA authority of Xu Yi Jun v GF Capital (HK) Ltd [2021] 1 HKC 191 (Reasons, 26(4) and 34). However, the protection under s.32 (restriction on deductions from wages) could not assist the Employee until the liability for wages had been established. Such liability was disputed before the Tribunal.

27.  Mr. Parker submitted that the Tribunal had erred in its interpretation of clause 6.5 of the Employment Agreement in that the unpaid 2023 Q4 Desk Uplift is not subject to the provisions thereunder, because the desk profit in question was payable prior to the notice of termination given on 19 April 2024 (Reasons, [33] and [39]).

28.  I do not believe that the Tribunal had taken a view on the merits of the 2023 Q4 Desk Uplift claim. It was decided that all the disputes should go before the High Court for determination. If the Employee takes the view that there is no defence to this part of his Counterclaim, he is free to avail himself of the O14, r5 procedure and seek summary judgment in the High Court.

29.  I can neither see any error of law raised under Ground (2), nor is it reasonably arguable.

Ground (3)

30.  Plainly, the Tribunal was aware of its jurisdiction over the Claim and Counterclaim of the Employer and Employee. The issue before it was the exercise of discretion under s.10 of the LTO to decline jurisdiction and transfer the Labour Tribunal Action to the High Court.

31.  With respect, I am unable to see any substance in Ground (3).

Disposition

32.  For these reasons, this application is dismissed with no order as to costs.

33.  I am grateful to counsel for his assistance.