LEUNG SUK FONG PEGGY v. THE PRUDENTIAL ASSURANCE CO LTD

HCMP 1945/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1945 OF 2011

(ON AN INTENDED APPEAL FROM HCME NO. 11 OF 2010)

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BETWEEN

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DECISION

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Hon Cheung JA:

1.  I agree with the decision of Kwan JA.

Hon Kwan JA (giving the decision of the Court) :

The application

2.  This is an application by Miss Leung Suk Fong Peggy for leave to appeal to the Court of Appeal.

3.  Miss Leung was engaged by The Prudential Assurance Company Limited (“the defendant”) as an insurance agent under an Agency Agreement effective from 1 June 2008. Her appointment was terminated on 3 April 2010. On 26 April 2010, she brought a claim against the defendant in the Minor Employment Claims Adjudication Board (“the Board”) for outstanding wages, statutory holiday pay and annual leave pay under the Employment Ordinance, Cap. 57 in the total sum of $3,068.40.  The Board held she was not an employee of the defendant and dismissed her claim. She appealed to the Court of First Instance with the leave of the court, pursuant to section 31(1)(a) of the Minor Employment Claims Adjudication Board Ordinance, Cap. 453, which provides that an aggrieved party may appeal with leave “on any ground involving a question of law alone”. On 30 September 2011, Poon J dismissed her appeal. She now seeks leave from the Court of Appeal to appeal the decision of the judge.

4.  Under section 33(1) of Cap. 453, a party dissatisfied with a decision of the Court of First Instance may appeal to the Court of Appeal with leave granted by the Court of Appeal. Section 33(2) provides that leave may be granted if the Court of Appeal is satisfied that “a question of law of general public importance is involved”. Under section 33(3), an application shall be in the form specified by the Registrar of the High Court, “setting out the question of law”.

5.  Miss Leung took out this application by a summons filed on 6 October 2011. It was supported by her affirmation of the same date of 15 pages with two exhibits, being her affirmation made on 4 March 2011 and her closing submission, which were placed before Poon J at the hearing of her appeal on 14 September 2011. In her supporting affirmation in this application, she went through the decision of Poon J paragraph by paragraph, and sought to answer each paragraph by quoting from the relevant parts of her earlier affirmation and closing submission. This is not the proper way to fulfil the requirement of “setting out the question of law” for the purpose of applying for leave to appeal. It is possibly only in the last page of her supporting affirmation that some questions of law were raised. These questions will be addressed in the latter part of this decision.

6.  The defendant filed a statement in opposition to this application on 21 October 2011. Under Order 59 rule 2A(5) of the Rules of the High Court, the Court of Appeal is empowered to determine the application on the basis of the papers filed by the applicant and any statement in opposition that may be filed. We think it appropriate to deal with this application on paper without an oral hearing, having considered thoroughly the papers filed in the proceedings below.

The appeal to the Court of First Instance

7.  Miss Leung claimed she was an employee of the defendant. The Board, having considered the evidence and directed itself by reference to the decision of the Court of Final Appeal in Poon Chau Nam v. Yim Siu Cheung (2007) 10 HKCFAR 156 and the text in Chitty on Contracts Hong Kong Specific Contracts, 2008 ed., pages 564 to 567[1], made findings of fact on each of the indicia pointing to or against an employment relationship, weighed the findings of fact and decided that Miss Leung was not an employee.

8.  As mentioned earlier, Miss Leung’s appeal to the Court of First Instance was confined by statute to “any ground involving a question of law alone”. It is apparent from the affirmation she filed in support of that appeal and her closing submission that what she attempted to do was to ask the court to revisit and evaluate the evidence afresh so as to reverse the findings of fact made by the Board. She pointed to section 32(2)(a) of Cap. 453, which provides that on an appeal for which leave was granted under section 31, the Court of First Instance may “draw any inference of fact”.

9.  The approach advocated by Miss Leung is wrong in law. The question whether Miss Leung was an employee or an independent contractor of the defendant is to be regarded on appeal as a question of fact determined by the Board. A finding that an employer-employee relationship did not exist could only be interfered with on appeal if it could be shown that the Board had misdirected itself in law or had come to a decision which no tribunal, properly directed itself on the relevant facts, could reasonably have reached (Lee Ting Sang v. Chung Chi Keung & Anr. [1990] 1 HKLR 764 at 768I to 769D; Poon Chau Nam, supra. at para. 22). Although the appellate court may draw any inference of fact, such inference must be consistent, not at variance with, the findings of primary fact of the Board, and it is not open to the appellate court to substitute its own conclusions as to the effect of the evidence for the conclusions of the Board, save where the Board’s view of the evidence is one which could not reasonably be entertained (Lee Tim & Ors. v. Chow Suk Ching t/a Wang Chong Co., Civ App 164 of 1996, 18 February 1997, per Godfrey JA).

10.  The above are well settled principles. The burden on an appellant in this situation is a heavy one. The decision whether a person is an employee or an independent contractor will depend on the evaluation of many facts and there will be many borderline cases. Even if it were a borderline case where it would be reasonable for similarly instructed minds to come to different conclusions, it is not open to the appellate court to interfere (O’Kelly v. Trusthouse Forte P.L.C. [1984] 1 QB 90 at 123 B to D; Lee Ting Sang , supra. at 769F; Chan Kwok Kin v. Mok Kwan Hing [1990] 2 HKC 65 at 69E to F).

11.  Poon J’s approach was guided by the above principles. He went through the findings regarding the eight indicia considered by the Board, being the extent of control, the prospect of profit return and risk of loss, integral part of the organisation, mutual obligation to work and to provide work, provision of equipment, incidence of taxation and insurance, the parties’ own view as to the relationship and traditional structures of the trade. He saw no basis to interfere with the findings on each of the indicia, save that he was “not sure” whether the last finding concerning the traditional structures of the trade was supported by the evidence before the Board. But assuming the Board had erred on the last finding, he did not think this would have any impact on the overall impression of the parties’ relationship.

12.  The Board did not make findings on each of the indicia wholly in favour of the defendant, and the weight it decided to give to the various findings was different, having regard to all the features of the particular relationship against the background of the indicia. Clearly, this was a “nuanced not a mechanical approach” (Poon Chau Nam, supra. at para. 18). And these are matters solely within the purview of the Board.  

13.  Poon J held that the Board had directed itself correctly on the law, and had applied the correct legal principles to the findings made. The Board’s decision was not one which no reasonable tribunal properly directed could have reached. There was no error of law. He therefore dismissed Miss Leung’s appeal with costs.

The appeal to the Court of Appeal

14.  Miss Leung contended that her intended appeal would involve questions of law of general public importance, because if her case were to be accepted as a precedent, this would have far-reaching consequence and it would be important to labour relations in Hong Kong.

15.  Leaving aside the questions of law that might be said to be involved in this appeal, I am unable to see how any question arising in this appeal, which is concerned with whether Miss Leung was correctly held not to be an employee, could be of general public importance. The determination that she was not an employee was based on an informed and considered evaluation of the circumstances relevant to her case. How this determination of fact was made in her particular circumstances could not be regarded as a precedent to be applied in different fact situations.

16.  One of Miss Leung’s complaints was that the judge did not make reference to any of the eight cases cited by her in her previous affirmation. She questioned if it should now be regarded that those eight authorities were all wrongly decided. Miss Leung’s reliance on those eight cases is misconceived and is not a legitimate use of authorities. The statements of the court she extracted from those judgments were made in the context of different fact situations. In deciding a question of this nature, the fact-finding tribunal is entitled to give different weight to the various findings it made on each of the indicia pointing to or against an employment relationship. It is not a mechanical exercise of going through a checklist to see whether any factor was for or against a party and just adding up the tally. What the tribunal said in a particular fact situation regarding a finding of, say, the extent of control, is not to be treated as binding and applicable and to be accorded the same weight in the evaluation exercise in a different fact situation.

17.  Mr Bernard Man, counsel for the defendant, has attempted to identify three questions of law from Miss Leung’s supporting affirmation. I agree with counsel they would appear to be the only questions and they are as follows:

(1) the proper construction of “contract of employment” in section 2 of Cap. 453;

(2) the construction of “insurance agent” under sections 2 and 68 of Insurance Companies Ordinance, Cap. 41; whether all “insurance agents” would be held not to be employees of insurers; and the labelling effect of claims in labour disputes; and

(3) the construction of sections 2 and 3(5) of Occupational Retirement Schemes Ordinance, Cap. 426; the construction of section 2 of Mandatory Provident Fund Schemes Ordinance, Cap. 485; and the legislative intent of these two statutes.

18.  As to (1), I agree with Mr Man no question arises in this appeal out of the construction of “contract of employment” in section 2 of Cap. 453. Both the Board and Poon J followed the decision of the Court of Final Appeal in Poon Chau Nam in determining whether there was an employment relationship. There is no dispute on the law in this respect.

19.  Turning to (2), section 2 of Cap. 41 provides a definition of “insurance agent” for the purpose of that statute. No question arises in this appeal regarding that definition.

20.  Section 68 of Cap. 41 is irrelevant as it is concerned with an insurer’s liability against third parties for an agent’s acts. Plainly, it has nothing to do with the question whether the relationship between an insurer and an agent is one of employment. I agree with counsel there is no basis to suggest that the Board or the judge had held there was no employment relationship between Miss Leung and the defendant merely because the relationship was labelled as an “agency”.

21.  The questions in (3) may be dealt with shortly. Section 3(5) of Cap. 426 clearly provides that a principal can make contributions to a scheme under that statute “whether or not there is a contract of employment between [the claimant] and [the principal]”. The other questions simply do not arise.

22.  Poon J is correct in dismissing Miss Leung’s appeal. Her intended appeal is but another attempt to re-argue her case and to challenge the findings of fact made by the Board, and to ask the Court of Appeal to make its own evaluation of the evidence. This is not permissible under the legislative scheme in Cap. 453, where the powers of the High Court have been severely circumscribed to interfere with a decision of the Board.

23.  No question of law of general public importance arises in the intended appeal. We refuse leave to appeal to the Court of Appeal under section 33 of Cap. 453. As this application for leave to appeal is entirely without merit, we further order pursuant to Order 59 rule 2A(8) of the Rules of the High Court that no party may request the determination to be reconsidered at an oral hearing inter partes.

24.  We make an order nisi that Miss Leung is to pay the defendant’s costs of this application and the costs are to be taxed on a gross sum basis. We direct the defendant to submit its bill of costs within seven days hereof and leave is given to Miss Leung to submit her response within seven days thereafter.