CHIAN KER CHI, PAUL v. SUPER ZONE INVESTMENT LTD. and Another

1994, NO. 10
(Civil)

IN THE SUPREME COURT HONG KONG

CIVIL JURISDICTION

CIVIL APPEAL

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J U D G M E N T

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Mayo, J.: (giving the Judgment of the Court.)

1. This is an appeal against the Decision of Kaplan J. who allowed the Respondent's appeal from an Order of Master Jennings for him to provide security for costs in the sum of $175,000.00.

2. Also, on the undertaking of the Respondent to file a Notice of Appeal out of time, Kaplan J. allowed an appeal against the Order of Master Cheung who ordered that on the failure of the Respondent to comply with Master Jennings' order, judgment would be entered in favour of the Defendants unless the said sum of $175,000.00 was paid into Court within 14 days.

3. Kaplan J. found as a fact that the Respondent was not ordinarily resident in Hong Kong and thus Order 23 did apply to these proceedings.

4. The main complaint which is made by the Appellants is that Kaplan J. wrongly exercised the discretion reposed in him under Order 23 when he failed to make the usual order for an overseas Plaintiff to provide security for the Defendants' costs.

5. The Respondent's claim against the Appellants is based on his alleged unlawful dismissal. The Respondent's claim was originally commenced in the Labour Tribunal.

6. For some reason which is not entirely clear the Presiding Officer seized of the matter ordered that the claim which is for a sum in excess of HK$2 million should be transferred to the High Court.

7. It was subsequent to the transfer of the case to the High Court that the application was made to the Master for security for costs.

8. In his Ruling on the Appeal Kaplan J. gave reasons for reversing the two Orders of the Masters which I have referred to.

9. One of the matters which caused him grave concern was the effect of the Decision of the Presiding Officer to transfer the case to the High Court. Proceedings in the Labour Tribunal are necessarily undertaken by the parties themselves as legal representation is not permitted. Had the case remained in the Labour Tribunal there can be no doubt that the issues could have been ventilated and the Respondent would have had the opportunity of having his case heard.

10. During the course of the appeal before Kaplan J. the Respondent said and the learned judge accepted that his financial resources were limited and that they were insufficient to fund either his or the Appellants' legal costs let alone the combined costs.

11. This led to the other main concern of the judge that if the Respondent was required to make the payment into Court which was ordered the Respondent may be unable to comply with it and that his legitimate claim may be stifled.

12. One of the difficulties which confronts us on this appeal is the inadequacy of the evidence relating to the Respondent's financial circumstances. He has at no time filed affidavit evidence on this subject nor has there been sufficient disclosure to enable the Court to conclude that his affairs are as parlous as indicated to Kaplan J.

13. We are satisfied that in exercising the discretion in the manner he did Kaplan J. failed to have sufficient regard to the highly prejudicial position the Defendants find themselves in.

14. We consider that the Master was right to order that security should be put up by the Respondent. However, having regard to all the circumstances we would order that the amount should be ordered in the sum of $75,000.00.

15. The whole situation is extremely unsatisfactory. It appears that we have no power to order that the matter be sent back to the Labour Tribunal which is a far more satisfactory venue for the resolution of the differences between these parties. However, we have no alternative but to make an Order the effect of which will be to enable the case to proceed in the High Court.

16. Kaplan J.'s order to set aside Master Cheung's order will not be interfered with. The period of time for effecting the payment of the sum ordered will be 28 days. We will hear the parties on costs.

Nazareth, J.A.:

17. Before we leave this matter, there is one aspect upon which I wish to add a few words. The respondent, Mr. Chian, took his claim to the Labour Tribunal in the expectation that he himself would be able to conduct it and that he would not expose himself to substantial costs. He says he was shocked when the Tribunal declined jurisdiction and he found he had to go to the High Court. He could not afford legal representation and found himself unable to cope. At the same time the defendants have had to bear the costs of legal representation in the High Court and before this Court, with diminishing prospects of recovering them if they should succeed. It has become increasingly clear and now is perfectly plain that Mr. Chian's claim would best be dealt with in the Labour Tribunal and that is not only the parties' view and that of this Court, but we are told by Mr. Wong also that of Kaplan J. However, having reviewed the position it appears that this Court, like the High Court from whence it derives its jurisdiction in the present respect, does not have jurisdiction to remit the claim to the Tribunal save under s.35, i.e. where the matter arises on appeal to the High Court, which this does not.

18. We think that early consideration should be given to the amendment of the Labour Tribunal Ordinance (Cap. 25), to empower the High Court to remit matters to the Tribunal not only on an appeal but also where the Tribunal declines jurisdiction under s.10, with powers similar to those in s.35. We think also that the opportunity should be taken to require the Tribunal to give its reasons for declining jurisdiction; in any event, we commend that to the Tribunal as a desirable practice regardless of whether the amendment recommended is made.