SCOUT ASSOCIATION OF HONG KONG v. LI TAK WAI

[English Translation - 英譯本]

HCMP 3055/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 3055 OF 2016

(ON AN INTENDED APPEAL FROM DCCJ NO 3828 of 2013 AND

DCCJ NO 4070 OF 2013 (CONSOLIDATED))

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J U D G M E N T

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Hon Chu JA (giving the Judgment of the Court):

1.  The defendant, Mr Li Tak Wai (“Mr Li”), brought this application on 7 November 2016 to apply to this court for leave to appeal against the judgment of Deputy District Judge Ng (“trial judge”) of 29 December 2015.

2.  The plaintiff, Scout Association of Hong Kong (“Scout Association”), opposed Mr Li’s application for leave to appeal.

3.  Upon consideration, this court is of the view that pursuant to Order 59, rule 2A(5)(a) of the Rules of the High Court, Cap 4A, Laws of Hong Kong, a written determination can be made without a hearing and solely on the basis of the documents submitted.

Relevant background

4.  On 12 April 2012, the Scout Association employed Mr Li as Outward Bound Training Officer, with particular responsibility of carrying out a project called “Sichuan Youth and Juvenile Attributes Training Project” (“Sichuan Project”) in Sichuan, China.  According to the employment contract entered into by the parties, the term of Mr Li’s employment was to run from 12 April 2012 to 11 April 2015.  The contract specified at the same time that either party could discharge the employment contract by giving one month’s written notice or paying a sum not less than one month’s salary as payment in lieu of notice.

5.  On 24 May 2013, the Scout Association orally dismissed Mr Li.  On 2 June 2013, the Scout Association made a payment in lieu of notice equivalent to one month’s salary, and discharged its employment contract with Mr Li with immediate effect.

6.  In August 2013, Mr Li filed a claim with the Labour Tribunal (case number LBTC 2922/2013) against the Scout Association for multiple sums owed, consisting of arrears of wages for attendance on rest days, money owed, advance payments, rents for accommodation and return of personal supplies and equipment, in the total sum of HKD222,790.80.

7.  On 3 October 2013, the Scout Association filed a claim with the District Court (case number DCCJ 3828/2013) against Mr Li for the remainder of the funds advanced for the Sichuan Project and a batch of supplies and equipment.  Upon the application by the Scout Association, the Labour Tribunal transferred LBTC 2922/2013 to the District Court, where it became DCCJ 4070/2013.  On 10 December 2013, the Registrar of the District Court ordered that DCCJ 3828/2013 and DCCJ 4070/2013 be consolidated (“consolidated case”) with DCCJ 3828/2013 as the dominant case.  The Scout Association became the plaintiff in the consolidated case and Mr Li the defendant.  The claims made by the parties became the claims and counterclaims respectively in the consolidated case.

8.  The Scout Association made two claims in the consolidated case as follows:

(1) Mr Li shall return to the Scout Association the remainder of the project funds advanced to him for the purchase of training supplies and office equipment regarding the Sichuan Project, in the sum of RMB82,986; and

(2) Mr Li shall return to the Scout Association the supplies and equipment provided to him or purchased by him on behalf of the Scout Association in the course of his employment, or their equivalent value, in the sums of HKD6,895 and RMB6,107.60.  The particulars of the batch of supplies and equipment are stated in the Schedule to the “Re-amended Statement of Claims”.

9.  Mr Li made a total of 7 counterclaims in the consolidated case as follows:

(1) equivalent in wages for overtime attendance on rest days in the course of his employment, in the sum of HKD44,485.15;

(2) sums owed to him by the Scout Association before he left the employment, in the total sums of HKD15,235 and RMB19,608;

(3) sums advanced for purchasing supplies and organising activities for the Scout Association in the course of his employment, in the total sums of HKD914 and RMB95,968.80;

(4) losses incurred from the tenancy agreement for accommodation on the mainland and other corresponding contracts entered into by reason of the employment contract, in the total sum of RMB 35,645;

(5) return of personal equipment and apparatus provided to the Scout Association in the course of his employment, or its equivalent value, in the sum of RMB9,830;

(6) compensation for suffering and mental distress due to right shoulder strain injury occasioned by work in the Sichuan Project, though Mr Li did not specify in concrete terms the amount of compensation sought under this claim; and

(7) apology from the Scout Association for psychological harm and injury to reputation caused by its false accusation of Mr Li’s taking away supplies.

10.  The consolidated case was tried before the trial judge over a total of 7 days. The trial judge handed down judgment in the following terms on 29 December 2015:

(1) judgment for the two claims of the Scout Association.  On claim (1), Mr Li was to return RMB101,541 (81,600+19,941) to the Scout Association.  On claim (2), Mr Li was to make compensation of RMB5,163.60 to the Scout Association.

(2) judgment for counterclaims (2) and (3) of Mr Li. On counterclaim (2), the Scout Association was to pay RMB22,528 and HKD7,250 to Mr Li.  On counterclaim (3), the Scout Association was to pay RMB 14605.70 and HKD876 to Mr Li.

(3) judgment against the remaining counterclaims (1) and (4) to (7).

(4) upon setting off Mr Li’s counterclaims (2) and (3) against the claims of the Scout Association, Mr Li was to pay RMB72,570.90 to the Scout Association, and the Scout Association HKD8,126 to Mr Li.

(5) Mr Li was to bear the costs of the Scout Association in the claims, and 85% of the costs of the Scout Association in the counterclaims.

11.  Mr Li was dissatisfied with the judgment and applied to the trial judge for leave to appeal.  Taking the view that Mr Li’s intended appeal did not have a reasonable prospect of success, the trial judge refused to grant leave.  Mr Li has now made a renewed application to this court for leave to appeal against the judgment of the trial judge, a retrial (trial in the second instance) of the parties’ claims, and a redetermination of the costs of the consolidated case in accordance with the outcome of the appeal.

Legal principle for granting leave to appeal

12.  Section 63A of the District Court Ordinance, Cap 336, Laws of Hong Kong, stipulates that leave to appeal against a judgment, order or decision of the District Court shall not be granted unless the court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.  The case law has established that reasonable prospects of success mean that from an objective perspective, the prospects of success are more than fanciful, without having to be probable: see SMSE v KL [2009] 4 HKLRD 125.

Grounds of appeal

13.  Mr Li has filed a summons and a supporting affirmation, and provided skeleton submissions and skeleton submissions (supplemental information).  In these documents, Mr Li has made lengthy statements many of which are irrelevant to the issues involved in the application for leave to appeal.

14.  Based on Mr Li’s summons and supporting affirmation in this application, his grounds of appeal can be summarized as follows:

(1) the trial judge’s findings of facts were unsafe, his judgment was unfair and unjust;

(2) the trial judge erred in believing the witnesses of the Scout Association and accepting their testimonies;

(3) the trial judge erred in rejecting the evidence adduced by Mr Li;

(4) the trial judge erred in his judgment, namely, finding that the Scout Association had given RMB101,541 to Mr Li, believing the evidence from the Scout Association on stocktake results and thus finding that Mr Li was to be held liable for the loss of supplies and equipment, believing that the Guidance on Financial Matters was the only applicable code so that as a result the Scout Association was not obliged to pay for the money Mr Li had advanced, and rejecting Mr Li’s claims for overtime work and certain expenses in the course of his employment; and

(5)     the trial judge erred in law in determining that section 32(2) of the Employment Ordinance, Cap 57, Laws of Hong Kong, was not applicable to the consolidated case.

Grounds of appeal (1) to (4)

15.  Grounds of appeal (1) to (4) are interrelated, and so they are dealt with together.

16.  The issues between the parties at the trial were fundamentally factual issues.  This can be seen in paragraphs 19 to 34 of the judgement of the trial judge.

17.  Having considered all the evidence in the case, the trial judge took the view that the witnesses of the Scout Association were honest and reliable, their testimonies were consistent with contemporaneous documents, and they remained unshaken under cross-examination, and he thus accepted their testimonies as facts.

18.  As to the 3 witnesses of Mr Li, that is, Mr Shum, Mr Siu and Madam Wong, the trial judge accepted their assessments of the Defendant’s work, that is, he was passionate and very determined about his work at the Scout Association.  Yet, the trial judge had some reservations about Mr Li’s testimony. This was a conclusion reached after considering his testimony and his performance under cross-examination, and considering that there were inconsistencies between his testimony and the contemporaneous documents on material issues, and also there were inherent improbabilities.

19.  The trial judge was of the view that where Mr Li’s testimony was in conflict with the testimonies of the witnesses of the Scout Association, on a balance of probabilities, he would accept the testimonies of the latter.  On this premise, the trial judge had analysed and discussed the evidence regarding each claim of the parties (including witnesses’ testimonies and documentary evidence) and the issues before reaching the judgment mentioned above.

20.  It is a well-settled legal principle that the Court of Appeal, in general, would not readily reverse the findings of facts made by a lower court.  In Ting Kwok Keung v Tam Dick Yuen & Others (2002) 5 HKCFAR 336, the Court of Final Appeal pointed out that the trial judge enjoyed the advantage of having seen and heard the witnesses and other evidence.  As such, in an appeal on findings of facts or acceptance of testimonies of witnesses’, it is only in highly exceptional circumstances, that is, where the findings of facts by the lower court were plainly wrong, that the Court of Appeal would reverse its judgment.

21.  In his written submissions, Mr Li has taken great length in criticising the trial judge’s decision to accept the credibility and testimonies of the witnesses of the Scout Association and not his witnesses, which resulted in an erroneous judgment.  Mr Li has stated, among others, that there were contradictions and doubts in the evidence (documentary evidence and witnesses’ testimonies) put forward by the Scout Association, so that the trial judge should not have accepted them.

22.  Mr Li has also alleged that the trial judge was biased towards the Scout Association and had failed to treat him and his witnesses fairly.  He has raised that the Scout Association was granted leave to amend its pleadings on many occasions and was given longer time to cross-examine witnesses, and that the trial judge had turned a blind eye to the dishonesty, contradictions and false testimonies of the witnesses of the Scout Association, and had only cited its viewpoints and assertions in the judgment without considering the doubts he had raised.

23.  This court considers that Mr Li may not have understood or may have misunderstood the civil procedure.  Civil proceedings have a different standard of proof from their criminal counterparts.  The party making a claim is only required to satisfy the court on a balance of probabilities that the evidence he adduces is sufficient to show that his case is made out without the need to establish beyond a reasonable doubt.

24.  In the judgment, the trial judge analysed and discussed the evidence and the law in respect of each claim of the parties, and explained in clear terms the acceptance or otherwise of the evidence, the findings of the relevant facts and the reasons for the judgment.

25.  It can be seen from the judgment that when he was assessing the evidence, the trial judge had taken into consideration that despite inconsistencies between the testimonies of the witnesses of the Scout Association, they were on the whole consistent with the relevant documentary evidence.  Furthermore, the trial judge had given consideration to the testimonies and documentary evidence of both sides and the inherent probabilities of Mr Li’s version before taking the view that the evidence and case of the Scout Association were more credible, and so he accepted them and gave judgment in favour of the Scout Association.

26.  This court has examined the judgment and the affirmation and submissions made by Mr Li in this application, and is of the view that the trial judge was not plainly wrong in his dealing with the evidence, findings of the relevant facts, and reasons for the judgment.

27.  As to the granting of leave to the Scout Association to amend its Statement of Claim, this was within the discretion of the judge, who had the power to grant leave to either party to amend the pleadings as it was appropriate in the circumstances.  We note that the Scout Association had amended its Statement of Claims twice before the trial.  The first amendment, made before Mr Li filed his Defence, was merely for a typographical error in paragraph 4.  The second amendment, made 7 months before the trial, involved amending the details of claim (2) of the Scout Association in the Schedule, and lowering the amount of claim (2) in paragraph 9.   Mr Li was awarded costs for the amendment of the pleading on that occasion.  We do not consider that the granting of leave by the court to the Scout Association to amend its pleading was improper or procedurally unfair.

28.  As to the time spent on the cross-examination of witnesses, this was already dealt with in paragraph 128 by the trial judge in his judgment, where it was pointed out that sufficient time had been given to Mr Li to cross-examine the witnesses.  We agree with the trial judge.

29.  All in all, it is our view that the arguments advanced by Mr Li do not suffice to show that the trial judge was plainly wrong when he was dealing with the evidence, assessing the witnesses and the evidence, and making findings of facts.  Further, we are not of the view that the many arguments and submissions advanced by Mr Li suffice to constitute grounds upon which the Court of Appeal can disturb the findings of facts by the trial judge.  Grounds of appeal (1) to (4) do not have reasonable prospects of success.

Ground of appeal (5)

30.  Mr Li has stated in ground of appeal (5) that the trial judge was in breach of the provisions of section 32(2) of the Employment Ordinance in giving judgment for claim (2) of the Scout Association and ordering him to pay RMB5,163.60 to the Scout Association as compensation for the value of the supplies and equipment lost.  Mr Li has submitted that according to section 32, for damage to or loss of goods, equipment, money or property entrusted to an employee for his custody by his employer (where such damage or loss is due to the neglect or default of the employee), the maximum amount of compensation the employer can pursue against the employee is HKD300. Yet, Mr Li’s understanding of section 32 is wrong.

31.  Section 32 of the Employment Ordinance provides as follows:

“(1) No deductions shall be made by an employer from the wages of his employee or from any other sum due to the employee otherwise than in accordance with this Ordinance.

(2) The following deductions may be made by an employer from the wages of his employee -

…

(b) deductions for damage to or loss of goods, equipment or property belonging to or in the possession or control of the employer or expressly entrusted to an employee for custody, or for loss of money for which an employee is required to account, where such damage or loss is directly attributable to his neglect or default:

Provided that –

(i) the total amount recoverable by deduction in any one case shall not exceed the equivalent in value of the damage or loss suffered by the employer or $300, whichever is the less; and

(ii) the total of such deductions in any one wage period shall not exceed one quarter of the wages payable to the employee in respect of that wage period;

…”

32.  Section 32 of the Employment Ordinance is about arrangements for deduction of wages and provides that an employer can only deduct an employee’s wages under specified circumstances and the amount deducted must not exceed that specified in the Ordinance.  It can be seen from its express provisions that section 32 restricts the circumstances in which an employer may adopt deduction of wages to offset the compensation payable to him by his employee to only those permitted by the Ordinance.  Section 32 does not negate, nor does it limit or diminish an employer’s legal right to pursue compensation from his employee, nor does it limit the power of the court to assess the amount of compensation. In other words, section 32 does not in any way affect an employee’s liability to compensate his employer for damage to or loss of the employer’s goods or property, nor does it affect the employer’s legal right to compensation in such circumstances.

33.  In the present case, it is not in dispute that the Scout Association did not deduct Mr Li’s wages or sums due and payable to him (for example, payment in lieu of notice for dismissal, compensation for paid annual leave).  It is by way of litigation that the Scout Association demanded Mr Li to return the supplies and equipment or pay an equivalent amount as compensation. In the judgment, the trial judge merely set off the amounts of the parties’ successful claims.  Therefore, section 32 of the Employment Ordinance is irrelevant to the issues in the case and, thus, inapplicable. Further, as stated above, section 32 does not limit or diminish the amount of compensation the Scout Association may pursue from Mr Li for the loss of supplies and equipment.  The trial judge did not err in his judgment in this regard, and there was no breach of the Employment Ordinance.

34.  Ground of appeal (5) does not have reasonable prospects of success.

Other submissions

35.  Mr Li has also complained that the Scout Association’s written submissions were served out of time.  Order 59, rule 2A(4) of the Rules of the High Court provides that a party opposing an application for leave to appeal shall serve and file his statement resisting the application within 14 days after the application is served.

36.  It is not in dispute between the parties that Mr Li served the summons of the application on the Scout Association on 21November 2016, and the Scout Association filed and served its written submissions opposing the application on 6 December 2016, that is, the written submissions were out of time by one day.  Subsequently, on 19December 2016, Mr Li served his second submissions, which, apart from replying to the submissions of the Scout Association, also put forward new information.

37.  We take the view that it was an impropriety for the Scout Association to have delayed the service of its written submissions in the absence of any explanations, but the delay in question was a minor one, and no actual injustice or prejudice was done to Mr Li.

38.  In his submissions, Mr Li has also mentioned that he had originally filed his claims at the Labour Tribunal and it was only because the Scout Association had brought a separate action in the District Court and applied to have his claims transferred there that he passively became the Defendant in the consolidated case and his claims the counterclaims. Mr Li submitted that the trial judge had failed to take this background into consideration when he made the costs order (that is, ordering him to bear the costs of the Scout Association in relation to its claims and 85% of the costs of the Scout Association in relation to the counterclaims).

39.  We note that in the grounds of appeal listed in Mr Li’s summons of the application and supporting affirmation, there was no appeal sought against the costs order made by the trial judge on 6 May 2016 on an independent basis.  He has only asked for a redetermination of the costs following the outcome of the appeal.

40.  In any event, costs orders are decided by judges in the exercise of their discretion.  The Court of Appeal generally does not disturb costs orders unless there are highly exceptional circumstances, such as an error in legal principle by the trial judge or when the discretionary decision is plainly wrong.

41.  In his judgment of 6May 2016, the trial judge gave a clear explanation of the considerations involved in and the reasons for the costs order.  Put simply, it was mainly the trial judge’s view that the Scout Association should get costs on the success of its claims; and despite the success of two of Mr Li’s counterclaims, on the whole, the Scout Association was effectively the winning party of the counterclaims.  Further, after the transfer of his claims to the District Court, Mr Li had put forward certain new claims not within the jurisdiction of the Labour Tribunal in the consolidated case.

42.  We are of the view that the trial judge did not err in principle in making the costs decision, and the factors taken into assessment were not plainly wrong.  Thus, even if Mr Li had intended to appeal against the costs order independently, we would not have granted leave.

43.  Other matters, including complaints and criticisms made against the trial judge, other judicial officers having dealt with the consolidated case and the lawyer representing the Scout Association, are canvassed in the two submissions of Mr Li.

44.  We must point out that an appeal is not a trial in the second instance, and the Court of Appeal is not to retry the factual issues in the case.  An appeal is not an avenue for a party to vent his grievance with the judgment.  At length, Mr Li has reiterated his case and assertions, criticised the case and evidence of the opposite party, and even put forward new information and a new case, and questioned the integrity and professionalism of the lawyer and the judge. None of these submissions take his appeal any further.  In a similar vein, the complaints Mr Li has made against the judge and the lawyer are irrelevant to the issues of the appeal and would not enhance the prospects of success of the intended appeal.

Conclusion

45.  The defendant’s intended appeal does not have any reasonable prospects of success whatsoever, nor is there some other reason in the interests of justice so that the appeal should be heard.  As such, this application for leave to appeal does not comply with the provisions of section 63A of the District Court Ordinance.  We refuse to grant leave to appeal and order that the defendant’s summons applying for leave to appeal be dismissed.

46.  In addition, as the defendant’s application for leave to appeal is completely without merit, we, pursuant to Order 59, rule 2A(8) of the Rules of the High Court, order that neither party may, pursuant to rule 2A(7) of the same Order, ask for a reconsideration of this determination at an oral hearing inter partes.

47.  As to the costs of this application for leave to appeal, in general, costs follow the event.  However, in the light of the out-of-time filing and serving of the written submissions by the Scout Association, and in the absence of any explanations for the delay, we take the view that it should not be awarded costs.  We, therefore, make no order as to costs in this case.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law.