LEE SOW KENG JANET v. LINKWATERS INVESTMENT LTD. t/a KELLY MCKENZIE

HCA 11828/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 11828 OF 1998

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REASONS FOR JUDGMENT

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1. On 18 January 2001 at the hearing of this action I gave judgment for the plaintiff for the sum of $303,825.00 and a declaration that a motor vehicle, registration number HB 3620, was beneficially owned by her, together with the costs of these proceedings. I now give my reasons for so doing.

2. At the hearing on 18 January, the defendant did not appear and was not represented. Their solicitors had come off the record by an order of the Court dated 7 September 2000, and no application has been made to the Court for any other person to represent them. I was satisfied that the date of hearing had been fixed while the defendant was still represented by solicitors, so that they had notice of it, and accordingly proceeded to hear the matter in their absence.

3. Mr Sadhwani for the plaintiff sought leave at the commencement of the hearing to amend the statement of claim to delete the claim originally made for defamation, to adjust the sums claimed to allow for a payment made by the defendant in February 1999 and a judgment already obtained in these proceedings for $100,000.00, and to clarify other matters referred to in the parties' witness statements. As these did not in my view prejudice the position of the defendant, I gave leave for the amendments without re-service.

4. The only witness called was the plaintiff herself. Her evidence was that she had been employed by the defendant first in 1989 in the capacity of a personnel consultant and had enjoyed considerable success over the years so that she had progressed eventually to a position of director in 1992. Her terms of service had been agreed verbally with the managing director of the defendant, Ms Linda Lui, and, by 1997 included a basic salary of $32,000.00 a month, 15 days annual leave, a guaranteed annual bonus of one month's salary, and a share amounting to 10% of the defendant's net profits.

5. Over the years the plaintiff had not drawn all her share of the profits, preferring to leave a part to accumulate to assist the company as an investment. On 6 October 1997, at a meeting with Linda Lui at which the latter put forward proposals for a change in the plaintiff's conditions of service, that share was referred to and the current amount due then was calculated by Linda Lui at $377,440.00, and a copy of the document containing that calculation is included in the agreed documents. Indeed, a cheque for this sum had been drawn by her to pay to the plaintiff, but was not handed over as the plaintiff asked for time to consider the new proposals. Further evidence that the plaintiff was entitled to a share of the profits is contained in a letter from the defendant to American Express Bank Ltd dated 25 June 1997, also among the agreed documents.

6. On that evidence, I am satisfied that the plaintiff was entitled to a share of the profits, and as at 6 October 1997 the amount due was $377,440.00. On 18 October 1997 the plaintiff was paid a sum of $15,000.00 which she agrees was part payment of the sum outstanding, leaving a total of $362,440.00 due to her.

7. On 27 October 1997 the plaintiff gave two months' notice of her intention to resign from the company. On 12 December 1997, the plaintiff received a letter from the defendant purporting to terminate the plaintiff's services without notice and she left her employment. No further payments were made to her until these proceedings commenced.

8. In her statement of claim the plaintiff claimed arrears of wages of $12,387.10 and payment in lieu of her annual leave outstanding in the sum of $8,533.33. However, that was paid by the defendant in the payment referred to above made in February 1999, after allowing for an advance of salary of $10,000.00. The only other claim under her terms of employment is the guaranteed bonus for 1997. As her own notice would have expired a few days before the end of the year, I found she was entitled to 51/52 of one month's salary, being $31,385.00.

9. I accordingly awarded the plaintiff the sum of $303,825.00 calculated as follows:

10. The other matter raised in the statement of claim related to a car purchased in the name of the defendant.

11. The plaintiff's evidence, which I accept, is that the car was purchased by her in March 1997 with a deposit of $100,000.00 paid to her by the defendant as part of her share of the profits. The car was registered in the name of the defendant for tax reasons, but it was understood that the plaintiff would pay the hire purchase instalments. This she did for several months until December 1997, when she paid the balance owing to the finance company, and there is ample documentary evidence that the final sum of $153,985.00 was paid from her bank account. The intention was that the car would then be sold, and a buyer was found, but, although the registration document was given to her by Linda Lui's sister Eveline Lui, nothing was done to transfer the ownership to the plaintiff's name.

12. There is clear evidence that the plaintiff paid for this car and is entitled to the beneficial ownership of it, and judgment was given accordingly.