IBRAHIM JAAFAR v. BANK BUMIPUTRA MALAYSIA BERHAD

1992, No. A2238

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. This is an action by Ibrahim Jaafar, the former General Manager of Bank Bumiputra Finance Limited, Hong Kong ("BMFL") and former Chief Representative of Bank Bumiputra Malaysia Berhad ("BBMB") in Hong Kong against BBMB for breach of his employment contract.

2. The Plaintiff commenced employment with BBMB in Malaysia in 1972. In 1977, he was seconded to Hong Kong to start up a new subsidiary, BMFL, which was wholly-owned by BBMB. The terms of his employment as General Manager of BMFL with effect from 1 December 1977 were set out in a letter from the Chairman of BMFL dated 28 November 1977. This Appointment Letter contained a number of express terms relating to his appointment as General Manager of BMFL. Under Clause 7 he was to have "such other privileges and benefits as stated in Terms and Conditions of Service of Officers of BBMB". This conferred upon the Plaintiff additional rights and privileges available under BBMB's standard terms and conditions.

3. At the time of the Plaintiff's appointment, BBMB had only one overseas branch, namely its branch in London and no wholly-owned overseas subsidiary. BMFL was and remains the only wholly-owned overseas subsidiary of BBMB. BMFL officially commenced its operations on 12 December 1977.

4. The Appointment Letter was supplemented by a supplemental agreement in November 1979 made between the Plaintiff and BMFL acting through its then Chairman, Mr Osman. That supplemental agreement conferred certain additional benefits on the Plaintiff which formed part of the Plaintiff's present claims. At the trial, the parties reached agreement as to these additional rights, and it is no longer necessary for me to adjudicate on the claims arising out of the supplemental agreement.

5. In 1983, the Carrian scandal erupted. The Plaintiff offered to resign in August 1983 but his offer was not accepted by BBMB. Mr Dawood became the General Manager of BMFL in place of the Plaintiff as of 1 September 1984 on which date, the Plaintiff was appointed Chief Representative of BBMB in Hong Kong.

6. The Plaintiff's appointment as Chief Representative of BBMB in Hong Kong was communicated to him in a letter from BBMB dated 4 September 1984, retrospective to 1 September 1984 ("the 1984 Letter"). The representative office was to be located at the Plaintiff's home which is a flat in Victoria Heights owned at that point by BMFL. The letter stated as follows :

"There will be no change in the Terms and Conditions of your service insofar as your salary, ex gratia and other perks are concerned. These, however, will now be paid/reimbursed by Headoffice."

7. By letter dated 30 May 1985 ("the 1985 Letter"), BBMB notified the Plaintiff that whilst he might retain his present position as Chief Representative of BBMB in Hong Kong, the performance of his duties would be suspended with effect from 1 June 1985. This step was apparently precipitated by various allegations that had been made against the Plaintiff in relation to the performance of his duties whilst the General Manager of BMFL. The period of suspension was to last until all matters had been clarified. During that period, the Plaintiff's entitlement under the terms of his employment was to continue unaffected. The Plaintiff was expected to make himself available and to co-operate with the legal representatives of BBMB and BMFL in Hong Kong and to comply with all lawful instructions of his employers.

8. There is a letter dated 14 October 1985 evidencing an agreement between BBMB, BMFL, Petroliam Nasional Berhad ("Petronas") and the Plaintiff whereby BBMB, BMFL and Petronas agreed to release and discharge the Plaintiff from all claims and civil actions in connection with his appointment by BBMB and BMFL in consideration of the Plaintiff's co-operation with and assistance to BBMB, BMFL and their legal advisers in Hong Kong and the giving of evidence in civil proceedings issued in Hong Kong involving BBMB, BMFL and Petronas or any of them ("the Immunity Letter"). It contained the following provision :

"For the avoidance of any doubt, BBMB agrees to continue to employ you under the present terms and conditions of your Contract of Employment insofar as they relate to your remuneration and allowances for so long as you are required to and do continue to abide by and comply with the requirements hereinbefore set out."

It was the Plaintiff's unchallenged evidence that this was part of a "package deal" struck by BBMB/BMFL and the Attorney General's Chambers. Under this "package deal", the Plaintiff had to render assistance to the Hong Kong and Malaysian authorities as well and is obliged to remain in Hong Kong until the Carrian case is over. The Plaintiff has not left these shores since 1984 and will not be able to do so unless and until he is no longer required by the Crown to remain in Hong Kong in connection with the Carrian matter.

9. By letter dated 29 April 1986 ("the 1986 Letter"), BBMB notified the Plaintiff that Mr Dawood, who was the General Manager of BMFL, had been appointed Chief Representative of BBMB in Hong Kong. The period of suspension of the Plaintiff's duties was to continue until further notice. Nevertheless, during the period of suspension, the letter stated that the Plaintiff would be entitled to draw the full salary and his "entitlement under the terms and [his] employment shall continue to apply".

10. The Plaintiff's employment was terminated by BBMB on 25 February 1991.

11. The Plaintiff's claims to be entitled to a number of benefits under the terms of his employment by BMFL and subsequently by BBMB. These benefits arise under one of the following -

(a) the express terms of the Appointment Letter;

(b) terms to be implied from a course of dealing;

(c) BBMB's standard terms as subsequently varied by BMFL/BBMB; and

(d) terms of a supplemental agreement entered into between the Plaintiff and BMFL in 1979 referred to above.

12. At the commencement of the hearing, the Defendant conceded a number of the Plaintiff's claims, namely, claims relating to the provision of a domestic helper, clothing allowance, education allowance, telephone rental, pager rental, parking and tunnel fees which, in paragraph 16 of the Statement of Claim appear as items (d), (e), (f), (g), and (h) under para.11 and items (b) and (d) under para.13. During the course of the hearing, the Defendant further conceded that the Plaintiff was entitled to be provided with a car (i.e. item (b) under para.11) but disputed the amount claimed. It was prepared to concede that the Plaintiff's loss was $166,606.58 but the figure was not acceptable to the Plaintiff.

13. I pause here to make the observation that it is somewhat surprising that these concessions were not made at a much earlier stage. Whilst the Defendant as employer is not under any legal obligation to treat the claims of a former employee (albeit one who has served the Defendant for 19 years) with generosity, the delay in addressing and conceding the Plaintiff's claims was wholly unnecessary. Moreover, the manner in which it dealt with some of the Plaintiff's claims would have exasperated anyone with less patience and fortitude than the Plaintiff.

14. The extant claims which require determination by this court are :

(i) air passages

(ii) car

(iii) tax reimbursement

(iv) newspapers and periodicals

(v) entertainment expenses

(vi) IDD calls

(vii) petrol

(viii) repair and maintenance of car

(ix) leave entitlement

(x) repatriation costs.

15. The Plaintiff gave evidence in support of his claims. The Defendant chose the unusual course of not adducing any oral evidence to rebut the Plaintiff's claims.

16. Before turning to consider the various claims, it would be convenient to deal with a general defence that has been raised in respect of several of the claims, namely, the application of the Limitation Ordinance to those claims.

Limitation Ordinance, Cap.347

17. On behalf of the Plaintiff, it was argued that the Limitation Ordinance is not relevant because of section 25 of the Employment Ordinance Cap.57 which provides :

(1) ... where a contract of employment is terminated any sum due to the employee shall be paid to him as soon as practicable and in any case not later than 7 days after the day of termination.

(2) The sum referred to subsection (1) shall be -

.....

(c) any other sum due to the employee in respect of his contract of employment.

Counsel submitted that the use of the word "due" is relevant : as the Limitation Ordinance bars the remedy but not the right, a debt remains "due" although it may be statute-barred. It was argued that the section was meant to remove the impediment a long-standing employee would otherwise face in respect of claims arising out of his employment contract that is more than 6 years old. In other words, by implication, the Limitation Ordinance could no longer apply to claims arising under a contract of employment.

18. Section 25 appears in Part V of Cap.57 under the general heading "Payment of Wages". As a matter of statutory interpretation, it is difficult to conclude that that was the intention of the legislature in the absence of a clear provision to that effect. One would have expected some reference to that intention during the passage of the Bill. I have found no reference to this in Hansard which was not cited, presumably because it did not assist the Plaintiff's interpretation. It would be quite remarkable if a potentially substantial curtailment of the Limitation Ordinance could be achieved, as it were, by a side-wind. Moreover, if the Plaintiff seeks to recover such sums by reason of section 25 of Cap.57, such an action is one to which the Limitation Ordinance expressly applies : see section 4(1)(d) of Cap.347.

19. For these reasons, I cannot accede to the Plaintiff's argument that the Limitation Ordinance is rendered irrelevant to his claims by reason of section 25 of Cap.57. Whether or not any particular claim is barred by Cap.347 will depend on the facts of the relevant claim which are considered below.

The Plaintiff's Claims

(i) Air passages

20. It was an express term of the Plaintiff's contract contained in the Appointment Letter that

"One month home leave with air passage paid (First Class) for you and your family on completion of your twelve months attachment in HongKong. You will also be provided with a return air passage (Economy Class) for one maid if required."

21. It is the Plaintiff's evidence that this was an annual entitlement. It also emerged from the Plaintiff's evidence that the annual trip could be taken at any time during the year and did not have to be at the completion of the 12 month cycle. Subsequently, the Board of BMFL resolved that members of an officer's family would be entitled to a first class return trip twice a year while the officer's entitlement remained once a year. It appears from BMFL's board minutes that the resolution was passed on 3 July 1979.

22. In a letter of December 1983 seconding new Malaysian staff to BMFL, it was apparently stated that the Bank would provide return air passage (Economy Class) to the staff and the family once every two years. BMFL therefore sought clarification from its Joint Company Secretary based in Kuala Lumpur.

23. The response from BBMB on 6 February 1984 was that at a "Management Meeting" held on 3 January 1984 in Kuala Lumpur, it was decided that with effect from 1 January 1984 Malaysian expatriates and members of their family based in BMFL would be entitled to one return air passage per year instead of "the current practice of twice per year for the families and once a year for the staff." The "Management Meeting" referred to was a meeting of the management of BBMB. On 29 March 1984, the Joint Secretary of BMFL based in Kuala Lumpur wrote to the Plaintiff on behalf of BMFL as follows :

"... the matter had been duly considered and the Board concurred with the decision of the Management, [BBMB], to reduce the return air passage between Hong Kong and Malaysia to once a year."

In the context, the "Board" must mean the Board of BMFL.

24. The Plaintiff's position is that none of the terms of his employment could be changed without his consent and that each employee had a choice whether or not to accept a proposed variation. Of course, the particular benefit he is claiming was not part of his original terms of employment. Rather, it stemmed from a board resolution of BMFL applicable to all Malaysian expatriate staff based in Hong Kong. As a matter of principle, I do not see that such a board resolution could not be changed by a subsequent board resolution, at least where the Plaintiff would not be rendered any worse off than under the terms of the Appointment Letter.

25. Although the initial decision was a return trip every two years (economy class), the revised decision was limited to the frequency of the trips. The ultimate decision could not be interpreted as affecting the class of passage that up to that time had been accorded to Malaysian expatriate staff of BMFL. The fact that on 29 June 1984 BMFL authorised and paid for a First Class annual return passage for the Plaintiff's family confirms this. The effect of the change meant reverting back to the original position of an annual trip for the Plaintiff and his family as was his entitlement under the Appointment Letter. Therefore, as the Plaintiff's entitlement under the Appointment Letter was not affected, the question whether those benefits could be altered unilaterally by BMFL without the Plaintiff's consent does not arise for consideration.

26. The Defendant relied on Circular No.81/21 which revised the standard Terms and Conditions on 27 March 1981 as limiting its obligation to providing return air passages (Economy Class) to the staff member and his family once every two years. However, there is no evidence that this Circular ever applied to BMFL staff in Hong Kong : it was never adopted by the Board of BMFL and it was not challenged that prior to 1984, the Plaintiff and his family were always given first class return passages. As noted above, the Plaintiff's family was given first class return fares for their annual trip home in 1984.

27. The Plaintiff's claim under this head relates to the years 1984 to 1991. The total amount claimed is $366,176.00. The computation is set out in a schedule provided to the Defendant's solicitors on 17 May 1991. It is apparent from the schedule and confirmed by Counsel for the Plaintiff that the claim is limited to air passages for the Plaintiff and his family and although the Statement of Claim included a claim for economy passages for his domestic helper for the years 1984, 1986, 1988 and 1990, that claim is not being pursued.

28. Prime facie, therefore, the Plaintiff's claim succeeds to the extent of an annual first class return passage for himself and his family. The Plaintiff's computation of this claim therefore needs to be revised in two respects :

(1) to reflect that his family's entitlement is only once a year; and

(2) to allow for the fact that the Plaintiff has already received payment for his family's annual trip home in 1984 (see the debit note of 29 June 1984).

29. The revised computation is as follows :

His Family

30. I now turn to consider the defences that have been raised : first, the Plaintiff is only entitled to reimbursement for the cost of tickets actually purchased which implicitly required proof of purchase; second, the claim for air passages prior to 30 March 1986 is time-barred.

31. Dealing with the first defence, I note that in BBMB's standard Terms and Conditions of Service, a distinction is drawn between the various benefits to which Malaysian Home-Based Officers Serving in Overseas Branches are entitled. For certain expenses such as entertainment expenses, it was expressly provided that reimbursement is based on the actual amount of expenses incurred. No such requirement existed for return air passages. There is also the Plaintiff's evidence that at BMFL, even if staff do not travel at the end of a particular year, they get paid if they are eligible for the benefit and the financial statement is drawn up on that basis. I therefore reject the defence that reimbursement is limited to expenditure actually incurred. Accordingly, the Plaintiff's entitlement is not contingent on proof of tickets actually purchased. In this connection, I note that on 29 September 1989, BBMB advised the Plaintiff that there was "no necessity to return to anybody your used ticket", be it BBMB Finance (HK) Ltd or the Head Office. Had I upheld the Defendant's submission, I would nonetheless have found that it is estopped from insisting on strict proof of tickets purchased.

32. As to the defence based on the Limitation Ordinance, in practical terms, it would affect the Plaintiff's claims for his own return passages for 1984 and 1985 and for his family for 1985. BBMB's letter of 19 June 1987 was, inter alia, in response to the Plaintiff's letter of 2 March 1987. In relation to his entitlement to trips home, the 2 March letter referred to the Plaintiff's earlier letter of 5 February 1986. This letter is not in the index of documents relating to air passages and I have not been able to locate it in any of the many files in this case. Nevertheless the Plaintiff's evidence is unequivocal : he claims to be entitled to an annual first class trip for himself and twice a year for his family. BBMB's letter is at the very least an acknowledgement that the Plaintiff's entitlement was to a trip for himself and his family once every two years. Therefore it operated as an acknowledgement of BBMB's obligation to pay for the passages for at least one of the two years in question and, on this basis, only the claim for 1984 is time-barred.

33. In the result, the Plaintiff's is entitled to $203,716 less $6,122, namely $197,594 for air passages.

(ii) Car

34. Under the terms of the Appointment Letter, the Plaintiff was entitled to be provided with a suitable car for his personal use. He was deprived of this benefit when he was replaced as General Manager of BMFL in September 1984 and became BBMB's Chief Representative. It was not until the hearing that BBMB conceded that the Plaintiff was so entitled.

35. Although the Plaintiff's claim was originally put on the basis of the cost of renting a Mercedes Benz from 1984 to 1991, it was amended at the hearing to an alternative claim based on the cost of purchasing a second-hand Benz in October 1984. In fact, the Plaintiff had to obtain a loan of HK$250,000.00 from a finance company, Asiavest, a client of BBMB, to finance the purchase on 26 October 1984. Because of BBMB's refusal to admit the Plaintiff's claim at the time and to discharge the cost of purchasing the car, the Plaintiff settled the balance of Asiavest's loan out of his own resources in July 1986. The car was sold for $172,855 in November 1991. The Defendant submitted that the purchase of the Benz cost the Plaintiff HK$166,606.58 calculated as follows :

36. This computation appears to be wrong in two respects : First, the insurance cost was $15,800 and not $15,000. Second and more importantly, the loss suffered by the Plaintiff was not limited to the net cost. There is another component of loss sustained by him. From the date of the discharge of the Asiavest loan on 3 July 1986 until 25 May 1991 (i.e. the termination of his contract in February 1991 plus 3 months' notice), which was when the Defendant's obligation to provide a car would have ceased, the Plaintiff has been deprived of the use of $340,261.58 of his own monies. To properly compensate the Plaintiff for what he could otherwise have earned from having the use of this sum, it would be appropriate to award interest on it. The Plaintiff seeks simple interest at 10% per annum. That is less than the judgment rate and I have no hesitation in holding this to be the appropriate rate.

37. The defence that has been raised to this claim is the Limitation Ordinance. The Defendant submitted that as the breach occurred in 1984, the entire claim is time-barred. I do not agree. The Defendant's obligation to provide a car was a continuing one during the entire period of the Plaintiff's employment. The payments by Plaintiff for the purchase of the car were made to mitigate the loss flowing from Defendant's breach. Subject to the acknowledgement point, at most, the Ordinance would bar recovery of payments made prior to 30 March 1986. According to exhibit P3, a total sum of $99,234 was paid prior to this period. It would thus reduce the figure of $340,261.58 referred to above to $241,027.58.

38. Was there an acknowledgement by the Defendant so as to extend the limitation period? The Plaintiff relies on the Defendant's letters of 19 June 1987 and 4 March 1988. What must be shown is an admission by the Defendant that there is a debt or other liquidated pecuniary claim outstanding and its legal liability to pay it. See generally Chitty on Contract Vol.I at para.28-072. The June 1987 letter is plainly not an acknowledgement. Turning to the March 88 letter, it was written in response to a series of earlier letters from the Plaintiff including his letter dated 13 June 1987 in which the Plaintiff claimed his entitlement to an "official car which the bank has to refund me as I have incurred a loan from Asiavest HK when it was purchased". The Defendant replied under the rubric "Official Car" as follows :

"An official car will be assigned to you once approval is obtained ..."

39. Even if the "approval" referred to was purely administrative rather than a qualification to the "acknowledgement", the acknowledgement was the Plaintiff's entitlement to an official car and that is neither a debt nor other liquidated pecuniary claim. Indeed, what BBMB proposed to do was "to assign" a car rather than to reimburse the Plaintiff for costs incurred. In my judgment, the March 1988 letter did not constitute an acknowledgement by the Defendant that it was legally liable to pay for the Asiavest loan.

40. It follows that the two components of the loss sustained by the Plaintiff as a result of the Defendant's breach in not providing a car are

(i) the net cost of $172,406.56; and

(ii) interest on $241,027.58 from 3 July 1986 to 25 May 1991 at 10% p.a.

(iii) tax reimbursement

41. Prior to taking up his position with BMFL in Hong Kong, the Plaintiff had a discussion with a Mr Khodki who was the officer in charge of Human Resources about the terms of his appointment. The Plaintiff understood from Mr Khodki that he would be entitled to an income tax reimbursement for any differential between the tax payable in Hong Kong and what he would have paid in Malaysia, and that this was the Bank's practice in relation to its employees serving overseas. At that time, BBMB was already operating a branch office in London.

42. The Plaintiff did not make a claim for reimbursement until after he received a letter dated 10 March 1986 from BBMB which purported to vary certain terms of his contract. It stated that the Plaintiff would no longer be entitled to a number of benefits including "reimbursement of excess income tax". In other words, BBMB plainly acknowledged that prior to 10 March 1986, the Plaintiff was contractually entitled to reimbursement of excess tax paid. The Plaintiff's explanation for not making a claim until 1986 was that he had simply overlooked it. He therefore wrote to BBMB on 11 April 1986 inquiring as to the correct procedure for making a tax reimbursement claim. He was asked to submit his Hong Kong tax returns for processing. Although all information requested of the Plaintiff was supplied, BBMB never reimbursed the Plaintiff for excess tax paid.

43. There was correspondence over a period of 6 years between BBMB and the Plaintiff over this claim. Internal BBMB memoranda regarding the Plaintiff's entitlement is voluminous and includes detailed computations of the amount of excess tax paid by the Plaintiff. Notwithstanding more than half a dozen internal papers recommending that reimbursement be made and an Exco minute dated 18 March 1988 specifically authorising reimbursement for 1985-86, no payment was ever made to the Plaintiff. Suffice to say that the manner in which BBMB chose to deal with the Plaintiff's claims, in particular his claim for excess tax reimbursement, does not reflect well on the organisation. BBMB's executive decision making process defied comprehension. It was the very antithesis of speedy and efficient despatch of business. What emerged was the executive's steadfast refusal to make any tax reimbursement payment to the Plaintiff regardless of the merits of his claim. The executive's attitude appeared to become more and more vindictive with the passage of time.

44. BBMB submitted that reimbursement of excess tax was not a term of the Plaintiff's contract. But this is not an answer to the Plaintiff's evidence regarding his understanding derived from his conversation with Mr Khodki. If as BBMB appeared to contend, no such benefit was given to the Bank's employees working overseas, it could easily have called Mr Khodki or other officers to rebut the Plaintiff's evidence. After all, the Plaintiff was only one of several Malaysian expatriates working for BMFL in Hong Kong. But BBMB chose not to do so. As the Plaintiff's evidence to the effect that it was a benefit to which the Bank's officers serving overseas were entitled was neither challenged nor rebutted, I accept it and find that it was a term of the Plaintiff's employment with BMFL.

45. The next question is how this excess tax was to be determined. It stands to reason that the relevant department within BBMB which handles an processes these claims must be best placed to perform the computation. In fact BBMB did carry out the relevant computations of excess tax paid by the Plaintiff for each of the years from 1978 to 1988. These calculations are annexed to an internal BBMB memorandum dated 23 August 1989 from the General Manager of the Financial Services Office to the General Manager of the Human Resources Department. The methodology adopted in determining whether any reimbursement was due was to compare the tax paid in Hong Kong with the tax the Plaintiff would have paid in Malaysia on the income he would have earned as a local employee.

46. BBMB submitted that this methodology was wrong and that Malaysian tax should be calculated as if the Plaintiff had the same assessable income in Malaysia as he had in Hong Kong and it is only if Malaysian tax is lower than Hong Kong tax would the entitlement to reimbursement arise. I find this submission incredible particularly as BBMB chose not to adduce any evidence as to how the tax reimbursement claim operated in practice in relation to its Malaysian expatriate staff and to explain why the methodology used in its calculations in August 1989 was wrong.

47. Adopting the methodology used by BBMB and its computation for the years 1978 to 1988, the Plaintiff prepared a schedule to show the tax differential (if any) for the years 1978 to 1991 which is exhibit P1. As to the exchange rate, the Plaintiff averaged out the rates used in respect of the Hong Kong payments of tax which were twice a year. The Plaintiff did not receive any salary increase after 1988 so his earnings here remained static. The Hong Kong tax rate remained at 15% during the relevant years and from 1986 to 1989, the amount of Malaysian tax had remained constant at M$15,061. For the years 1989 to 1990, the Plaintiff simply adopted the 1988 figures and for 1991, the amount was pro-rated. The Plaintiff's claim amounts to M$134,155 or HK$402,465.

48. BBMB submitted that the Plaintiff is not entitled to reimbursement for the period prior to 4 September 1984 as he was then employed by BMFL and not BBMB. The question is whether all the parties, namely, BMFL, BBMB and the Plaintiff, consented to BBMB taking over the Plaintiff's employment including pre-contractual obligations from BMFL. The 1984 Letter was to the effect that there would be no change in the terms and conditions and "salary, ex-gratia and other perks ... will now be paid/reimbursed by Head Office". Conspicuously absent from this letter was any reference to responsibility for the payment of accrued entitlements as between BMFL and BBMB. Given the circumstances that gave rise to the 1984 Letter and its terms as well as the relationship between BMFL and its parent BBMB, the 1984 Letter is capable of being be construed as an assumption by BBMB of contractual obligations vis-à-vis the Plaintiff as from 4 September 1984, including all existing entitlements as of the date of the 1984 Letter and I so find.

49. A further defence raised was the Limitation Ordinance. The Defendant relied on the Limitation Ordinance as barring claims arising prior to 30 March 1986. The Plaintiff submitted that there was a sufficient acknowledgement of the debt by the Defendant. In its letter of 19 June 1987, BBMB wrote to the Plaintiff in these terms :

"Income Tax Refund

Human Resources Department is awaiting the Bank's approval of your Income Tax Refund from 1978 to 1985 amounting to M$75,725.92. You will be notified accordingly."

On 4 March 1988, it wrote to the Plaintiff in the following terms :

"Income Tax Refund

Human Resources Department is still awaiting approval of your Income Tax Refund. The details of the calculation from 1978 to 1985 amounting to M$75,925.93 and from 1985 to 1986 amounting to M$17,105.20 are as per Appendix I and II."

The Appendices set out in detail the computation of the amount of refund due in respect of each of the years from 1978 to 1986.

50. Because there was a reference to "approval" which had not yet been forthcoming, the Defendant contended that there was no sufficient acknowledgement to satisfy section 23(3) of the Limitation Ordinance. Although the requisite "approval" had to be obtained before effecting payment to the Plaintiff, it does not necessarily follow that no sufficient acknowledgement could have arisen. A number of authorities were cited by Counsel, but they are of limited assistance as it is ultimately a question of construction. In the words of Lord Sumner in Spencer v. Hemmerde [1992] A.C. 507 at 519, which I respectfully adopt, "comparison with the words of other debtors is of little use". Read in its context, the March 1988 Letter together with Appendices I and II is properly construed as an acknowledgement that a repayment of the amounts specified was due to the Plaintiff. The defence based on limitation therefore fails.

51. As regards the Plaintiff's computation, I note that the Defendant attacked the reliability of the figures for the years 1989 to 1991 because the Plaintiff simply adopted the 1988 figures and although there were constants in the computation, the exchange rate was a variable. I was invited to disallow the claims for 1989 to 1991 for this reason. Whilst the exchange rate has fluctuated, it has been relatively stable since 1984 and has remained at around HK$3 to M$1. The Plaintiff's approach has not been unreasonable and I see no basis for disallowing his claim for those years. The Plaintiff has made out his entitlement to be reimbursed for excess tax. Although the exact amount could have been more precisely calculated, the Plaintiff should not be penalized for failing to do so. In any event it is not a reason for conferring a windfall on the Defendant who did not put forward an alternative exchange rate which it could have done. It is not even a certainty that the rate used was to the Defendant's disadvantage. In any event, this possibility can be taken into account when awarding interest. Accordingly, I hold that the Plaintiff is entitled to HK$402,465 in respect of this claim.

Claims (iv) to (viii)

52. In relation to items (iv) through (viii), in summary the Plaintiff's evidence was that he submitted monthly claims to BBMB supported by the original receipts and that he was reimbursed in full for all of these claims up till June 1988. This evidence was not challenged. I therefore find that until June 1988 the Plaintiff's claims for all these items were met in full by the Defendant. Further, each of the monthly claims was accompanied by relevant supporting documentation such as receipts.

53. The course of dealing between the Plaintiff and BMFL as regards the Plaintiff's entitlement to these claims was well-established by the time the Plaintiff ceased to be General Manager of BMFL. Each of the series of letters consisting of the 1984 Letter, the 1985 Letter, the Immunity Letter, the 1986 Letter operated to preserve the benefits or perquisites enjoyed by the Plaintiff whilst holding the post of General Manager of BMFL : as a matter of construction, they could not and did not effect any change in entitlement to those benefits.

(iv) newspapers and periodicals

54. The claim for $271.00 relates to unreimbursed expenses incurred during the period from August 1988 to January 1991. The additional defence raised was that the Plaintiff was not doing productive work for BBMB. But if, as I have found, it was a perquisite enjoyed by the Plaintiff whilst employed by BMFL, the fact that the Plaintiff might not be doing productive work for BBMB cannot alter his entitlement since BBMB's assumption of the burden of paying the Plaintiff was not conditional upon the Plaintiff doing productive work for it. In any event, it was the Plaintiff's evidence that Malaysian investors who were BBMB's clients still contacted him on occasion during this period and the Plaintiff had to keep himself informed. I find that the expenses were legitimately incurred and the Plaintiff's claim under this head succeeds.

(v) entertainment expenses

55. This claim for $825.00 is for expenses incurred in July 1988 and April 1990. The Defendant submitted that the Plaintiff ceased to have any right to entertainment expenses once he was suspended. In my judgment, if this was a perquisite previously enjoyed, the series of letters would have preserved it. The only question is whether these expenses were legitimately incurred.

56. It is the Plaintiff's evidence, which I accept, that he was contacted on occasion during his period of suspension by valued clients of BBMB including politicians. It was perfectly reasonable for the Plaintiff to see them and entertain them in a modest fashion (as is evident from the amount claimed). Accordingly, the Plaintiff is entitled to reimbursement.

(vi) IDD

57. This claim of $30,065.71 relates to the period from July 1988 through 25 February 1991. The Defendant relied on its circulars dated 15 January 1986 and 3 July 1987 as respectively limiting the Plaintiff's right to be reimbursed to those made on official business and capping the allowance to M$125 per month.

58. It is not disputed that until June 1988, the Plaintiff had been reimbursed in full in respect of IDD calls, no distinction having been made between official and personal calls. This conduct on the Defendant's part is wholly consistent with the view that the circulars did not apply to the Plaintiff because it was implicit in the agreement formed by the series of letters to the effect that the Plaintiff should continue to receive what he had been receiving as General Manager of BMFL, that those terms and conditions could not be varied unilaterally by the Defendant. Accordingly, the series of letters commencing with the 1984 Letter conferred on the Plaintiff contractual entitlements that could not be varied unilaterally by the Defendant without the Plaintiff's consent. The Plaintiff is therefore entitled to the amount claimed.

(vii) petrol

59. The Plaintiff's claim for $33,679.09 relates to the same period as for the IDD claim. As the defence is based on BBMB's circular of 15 January 1986 to cap its liability to a maximum of M$350 per month or actual costs if incurred on official business, it fails for the reasons given under (vi) above.

(viii) car repair and maintenance

60. Reimbursement of these expenses of $811.70 was also a perquisite enjoyed by the Plaintiff prior to the 1984 Letter. As I accept the Plaintiff's evidence that the relevant receipts were submitted with the relevant monthly claims, it follows that this claim succeeds.

(ix) leave entitlement

61. The Plaintiff was entitled to 30 days annual leave. Under the Terms and Conditions of Service, an employee could, with the managing director's approval, accumulate up to 60 days' leave upon certain conditions. In January 1974, the Plaintiff applied for and obtained approval to accumulate up to 60 days' leave. Upon his appointment to set up BMFL in December 1977, according to personnel records, he had accumulated 65 days' leave. It is the Plaintiff's evidence that he wanted to take some leave prior to taking up his appointment, but he was told by Mr Khodki : "You go ahead. Never mind the accumulation of leave." This was not challenged by the Defendant. By its conduct therefore, the Defendant implicitly represented to the Plaintiff that his leave entitlement would not be adversely affected by acceding to BBMB's request. It was so acted upon by the Plaintiff. In these circumstances, the Defendant is estopped from relying on its standard terms in relation to the 65 days of leave accumulated prior to joining BMFL.

62. In early 1983, at the time the Carrian affair was unravelling, the Plaintiff considered resigning but was persuaded to take 3 months' leave (totalling 92 days) and to consider his position after that. The Plaintiff had by 1983 accumulated 92 days leave with BMFL and his application was granted. It necessarily follows from the approval that the 60 days accumulated leave limitation had been waived vis-à-vis the 92 days.

63. After taking 12 days of his 3 months' leave, the Plaintiff was told to cut short his vacation and to return to Hong Kong. By the end of 1983, in terms of strict documentation, the Plaintiff's leave entitlement was as follows : 65 days accrued with BBMB prior to coming to Hong Kong; 92 days with BMFL of which 12 were taken in 1983 leaving 80 accrued days. The Plaintiff's claim is limited to these 145 days in total.

64. The Defendant submitted that the Plaintiff has used up all his leave entitlement and relied on its letter of 22 September 1987 which stated that when the Plaintiff was not assisting the Defendant's solicitors or the Crown, he would be treated by the Defendant as being on leave. The first point to note is that this was a unilateral decision by the Defendant. Second, whilst it is true that the Plaintiff was suspended from his duties as Chief Representative and that thereafter all he did was to assist in the Carrian litigation, the Plaintiff had to render assistance to at least 10 different governmental or quasi-governmental bodies, namely the Attorney General's Chambers, the Commercial Crimes Bureau, the Homicide Division of the Police, the Banking Commission, the Securities Commission, the ICAC, Bank Negara (Malaysia), the Malaysian Committee of Inquiry, the Committee set up to investigate the collapse of EDA and Carrian and the Malaysian Anti-Corruption Commission as well as the four different law firms that were successively advisers to the Defendant and BMFL. He was on call throughout the period of suspension and other than when required by the legal advisers for BBMB/BMFL to assist, he was given little or no notice of when his assistance would be required. It was the Plaintiff's unchallenged evidence that when he was summoned by the governmental or quasi-governmental bodies, he was expected to attend immediately and he did so because he did not want to run the risk of falling foul of the terms of the immunity granted.

65. In those circumstances, the Defendant's stance as set out in its letter of 22 September 1987 is, to say the least, wholly untenable. It was the Plaintiff's unchallenged evidence that he would think twice before venturing as far as the New Territories. It is contrary to commonsense to treat a person in the Plaintiff's position, being permanently on call to more than ten different government or quasi-governmental agencies or entities at no or little notice, as being "on leave" whenever he was not actually rendering assistance. This defence is utterly devoid of merit.

66. The Defendant also relied on its Terms and Conditions of Service referred to earlier, which were subsequently (in 1981) revised to provide leave accumulation of up to 90 days. For the reasons set out above, the Defendant had waived those provisions vis-à-vis the Plaintiff. As the Defendant terminated the Plaintiff's employment without affording him the opportunity to take his leave entitlement, it must pay the Plaintiff in lieu. I need not be concerned with the limitation point as that has now been abandoned by the Defendant. Accordingly, the Plaintiff's claim to remuneration in lieu of leave entitlement in the sum of M$71,050.00 succeeds.

(x) repatriation costs

67. The Defendant denies that it is under any obligation to repatriate the Plaintiff and his family to Malaysia : first because there was no contractual term to that effect; second, if there was such an obligation, the Plaintiff is not entitled to any payment as he has not relocated and has not, therefore, incurred any expense; and third, the Plaintiff is not entitled to reimbursement unless the costs were incurred within a reasonable time of the termination of his employment.

68. The cost of transporting the Plaintiff, his family and effects to Hong Kong from Malaysia when the Plaintiff was seconded to take up his post here was defrayed by BMFL/BBMB. The fact that the Appointment Letter did not contain a specific provision to this effect did not mean that BMFL/BBMB did not have that obligation. When an employee is seconded to a foreign posting, the repatriation of the employee, his family and effects at the end of that posting is a term that would be implied to give business efficacy to the arrangement. It was the intention of the parties that this would be the case and it matters not, in my view, whether the employer's contract is renewed or not. That is wholly consistent with the representation made to the Director of Immigration by Mr Osman on 5 October 1977 before the Plaintiff took up the secondment. It was the Plaintiff's unchallenged evidence that two 40' containers and a 20' container would be needed to transport his personal effects, including his car.

69. Whilst I accept that in normal circumstances the obligation to bear repatriation costs cannot remain open indefinitely, the very unique circumstances of this case make it an exception to the general rule. The Defendant was party to the "package deal" which kept and still keeps the Plaintiff here. That evidence was unchallenged. Therefore the Defendant's obligation continues until a reasonable time after the Plaintiff becomes free to leave Hong Kong. For these reasons, the Plaintiff is entitled to a declaration that the Defendant is contractually bound to bear the repatriation costs of the Plaintiff and his family to Malaysia provided that such relocation occurs within a reasonable time, say 3 months, from the date the Plaintiff is no longer required by the Crown to remain in Hong Kong for the Carrian litigation.

The Counterclaim

70. The Defendant counterclaims for mesne profits of the flat in which the Plaintiff had been residing for a period of 3 months from 1 April 1991 to 30 June 1991. The flat in question was initially acquired by BMFL and assigned to BBMB by an assignment dated 31 March 1991.

71. Mr Shaw, for the Plaintiff, submitted (1) that BBMB is not entitled to claim mesne profits because no express notice of the assignment of the property to it had been given to the Plaintiff; and (2) that in any event $50,000 a month claimed by the Defendant is excessive. The Defendant's expert admitted in cross-examination that the market rental for the property taking into consideration its condition at the material time was $46,500 and not the sum of $50,000 a month claimed by the Defendant; further, on the basis of the price at which the property was assigned from BMFL to BBMB, the yield was only $18,000 a month. Mr Shaw therefore submitted that an appropriate rental should be the difference between those amounts, i.e. $33,250 a month.

72. Mesne profits are really damages for trespass. Damages suffered by the owner by being kept out of possession are recoverable as mesne profits. If actual damage cannot be proved, he may recover as mesne profits the value of the property to the Defendant during the period of the Defendant's wrongful occupation. See generally 27(1) Halsbury's Laws of England 4th Edn. para.258. In order to be entitled to mesne profits, the Defendant had to show that it was the legal owner of the property during the material period. That BBMB has done : it became owner by virtue of the assignment of 31 March 1991.

73. The subject matter of the assignment from BMFL to BBMB was the property itself and not a chose in action such as the benefit of a tenancy agreement. The submission based on the requirements of a valid legal assignment of a chose in action was misconceived. It would be a different matter if BBMB as assignee of BMFL sought to recover rent due under a tenancy agreement between BMFL and the Plaintiff and no notice of the express written assignment had been given to the debtor prior to the commencement of the action. Its first submission therefore fails.

74. As to the appropriate market rental, the evidence of the Defendant's expert was that it was $46,500 per month. Where, as in this case, the transaction between BBMB and BMFL was between related corporations and was not an arm's length transaction, the yield based on the expressed consideration for the transaction is not a reliable indication of the rental value. In the absence of any expert evidence from the Plaintiff, there is no reason why I should not accept the valuation of the Defendant's expert. Accordingly I find that the Defendant is entitled to recover from the Plaintiff mesne profits of $46,500 per month for 3 months under its counterclaim.

Conclusion

75. To summarise, the Plaintiff is entitled to the amounts set out below in respect of his claims :

76. As regards the car claim, there are two components to the amount to which the Plaintiff is entitled namely, (a) the net cost of $172,406.56 and (b) interest on $241,027.58 from 3 July 1986 to 25 May 1991 at 10% simple interest per annum. The amount under (b) is to be calculated by the parties and submitted for approval.

77. The Plaintiff is entitled to have his repatriation costs borne by the Defendant provided that such costs are incurred within 3 months of his being notified by the Crown that his presence in Hong Kong in connection with the Carrian matter is no longer required or that he is at liberty to leave Hong Kong and I so declare.

78. As to interest, I make the following awards of simple interest on the amounts set out below until the date of judgment pursuant to section 48 of the Supreme Court Ordinance, Cap.48 :

(i) air passages

at 10% p.a. on each of the amounts set out in the revised computation set out above for the years 1985 to 1991 (inclusive), such interest to be calculated as from 1 January of the year following the year against which the amount is shown

(ii) car

at 10% p.a. on the sum of $172,406.56 only as from 26 May 1991

(iii) tax reimbursement

on each of the amounts set out under the column headed "Difference in Amount" in exh.P1 for the years 1978 to 1991 (inclusive), such interest to be calculated from 1 January of the year following the year against which the amount is shown at

10% p.a. for the years 1978 to 1988 (inclusive)

7% p.a. for the years 1989 to 1991 (inclusive)

(iv) newspapers and periodicals

at 10% p.a. from 1 February 1991

(v) entertainment expenses

at 10% p.a. from 1 May 1990

(vi) - (ix)

79. IDD, petrol, car repair and leave entitlement

at 10% p.a. from 26 February 1991

80. The Defendant is entitled to simple interest at 10% p.a. on the following amounts from the following dates until the date of judgment :

81. On the question of costs, I make an order nisi in favour of the Plaintiff on his claim and in favour of the Defendant on its counterclaim.