NG SIU CHAU v. HKSAR

FACC No. 2 of 1999

IN THE COURT OF FINAL APPEAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 2 OF 1999 (CRIMINAL)

(ON APPEAL FROM CACC 118 OF 1998)

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Between:

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JUDGMENT

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Mr Justice Litton PJ :

1. I agree with Mr Justice Ching PJ's judgment.

Mr Justice Ching PJ :

2. The appellant was convicted in the District Court on seven charges of offering advantages to public servants contrary to section 4(1)(a) of the Prevention of Bribery Ordinance, Cap. 201. The charges were the same in each case, mutatis mutandis the details, and alleged that he had offered advantages in 1996 to

"... a public servant ... an apprentice jockey employed by the Royal Hong Kong Jockey Club ...."

The Hong Kong Jockey Club, as it is now called, is a public body within Schedule I of the Ordinance while section 2(1), so far as it is relevant, defines a public servant as being

"... any employee of a public body ...."

At trial the Judge found that the appellant did offer advantages to the apprentices for the purposes stated and these findings were not challenged in this Court. The sole question argued before us was whether the apprentices were employees of the Club.

3. The question was unfortunately not raised at trial. In the absence of argument but no doubt conscious of his duty to make a finding upon it one way or the other, the Judge dealt with it very briefly by saying that he was satisfied that the apprentices were in fact employees of the Club and that accordingly they were public servants for the purposes of section 4(1)(a). The only evidence to which he referred was the evidence of the apprentices themselves and of a stipendiary steward each of which said that the apprentices were employees of the Club. There is some authority that one of the factors to be considered in determining whether or not one person is the employee of another is the parties' own view of the relationship, see Chitty on Contracts (28th Edn.) at paragraph 39-009 where, however, no decided precedent is cited. It may be that, in an appropriate case, the fact that the parties regarded themselves as employer and employee may facilitate a finding by a Court to that effect. The finding is, however, one of mixed fact and law. The evidence already mentioned is no more than an assertion of a conclusion from unspecified facts to which a probably imperfect understanding of the law, if it was considered at all, has been applied. Such evidence, if admissible at all, can carry little weight. The majority in the Court of Appeal, Mayo JA and Stuart-Moore JA with Nazareth VP dissenting, agreed with the Judge's conclusion relying on the same evidence to which they added several other factors. On analysis, those factors were the control exercised by the Club over the apprentices, the provision of training, quarters and payment of money to them and finally a purposive interpretation of the Ordinance.

4. Before dealing with these matters it is as well to bear in mind the role of the Club in horse racing matters in Hong Kong. It has a monopoly on these activities which it administers. Vast amounts of money are wagered on each race from the earnings of which the Club makes substantial payments by way of tax and, as a non-profit organisation, makes equally large if not larger donations to charity. As a consequence of these matters it is incumbent upon the Club to advance the standard of racing in Hong Kong and to ensure that the racing is of high quality, clean and clear of that corruption for which it is such a fertile ground. At the same time it has a duty to the owners that their valuable animals should only be ridden by those who are competent. No person may ride any of the horses unless permitted by the Club.

5. The indentures of the apprentices were unfortunately not before the trial judge. They were, by leave, put before the Court of Appeal. The majority in that Court expressly, and Nazareth VP by necessary implication, found that the indentures could not be considered in isolation and could not, by themselves, be determinative. That is undoubtedly correct. So far as is relevant they were all in the same terms. They contain provisions such as may be expected by which the master, a trainer licensed by the Club, is given authority and control over the apprentices. The indentures were entered into by the apprentice, one of his parents and the trainer. The Club was not a party to them but is referred to in some of the terms. So there is a recital that the trainer is licensed by the Club. Clauses 1 and 6 provide that the indenture is to be for a period of one year from the date upon which it is approved by the Club. Clause 2(g) requires the parent or the apprentice to provide a written certificate signed by a qualified medical practitioner approved by the Club. Clause 2(h) provides that the apprentice will not ride overseas without the consent of the master and the stewards of the Club. Clause 4(a) contains provisions as to the earnings of the apprentices. They are to be paid riding fees of one half of that paid to jockeys but they are to be entitled to the full percentage of prize money won in accordance with the Rules of Racing. Clause 4(b) provides that all earnings and gratuities which an apprentice may earn or become entitled to receive is to be held by the Club which has a discretion as to how much and when any part of it is paid to the apprentice during the currency of the indentures. Clauses 4(c) to 4(e) make provision for the discharge or determination of the indenture in various circumstances, generally only with the consent of the Club. None of these provisions remotely point to a conclusion that the apprentices are employees of the Club and the Court of Appeal did not so find. They indicate nothing more than that the Club is exercising administrative powers. This is emphasised by Clause 5 which provides that the apprentice is subject to the rules and regulations of the Club. All apprentices, as a condition for riding in races and, indeed, any person taking part in any matter coming within the Rules is bound by them. So the first paragraph of the Rules of Racing provided at the relevant time that

"These Rules apply to all meetings held under the sanction of The Royal Hong Kong Jockey Club and to all races run at such meetings .... Any person who takes part in any matter coming within these Rules thereby agrees to be bound by them."

The Rules were revised in 1999 but it is those in 1995 that we are concerned.

6. Clause 3(b) of the indentures provides that it is agreed by the parties thereto

"That the Apprentice will be paid a monthly allowance of which 25% will be paid by the Master and 75% will be paid by the Club. The monthly allowance will be determined by the Stewards of the Jockey Club from time to time."

Payment by one person to another does not of itself mean that the latter is an employee of the former. In the course of his judgment Mayo JA said that

"... you can be an employee without the necessity of serving under a Service Agreement. A good example of this is a solicitor and client relationship. The Client employs the services of the Solicitor although usually there is no contract of employment."

With respect, the example is inapt. In common language a client employs or uses the services of a solicitor but the solicitor is not an employee of the client. To construe the word 'employee' as including a person who is paid for providing his services is to blur or to obliterate the distinction between employees properly so called on the one hand and agents or independent contractors on the other. Finally, while an employee, agent or independent contractor performs services for the benefit of or on behalf of the person paying him, it is quite impossible to identify anything that apprentices do for or on behalf of the Club. They do their stable work and ride in races for the benefit of the owners or for the trainer, or both, but not for the Club. We were not told why the Club pays 75% of the monthly allowances of the apprentices but it is not difficult to regard it as assistance to either the apprentice or the trainer.

7. Very few other factors were put forward to show that the apprentices were employees of the Club. They were that they were obliged to live in a hostel provided by the Club and that on the day before a race day they were confined there. They were apparently required to return to and stay in the hostel after stable work in the afternoons. They were not permitted to own or to have a paging machine or a mobile telephone. From the evidence of the stipendiary steward it is clear that these regulations were imposed to ensure that the apprentices were protected from any undesirable influence. A quick reading of the Rules of Racing shows other provisions, relating not only to apprentices, for the same purpose. These restrictions are conditions under which apprentices are allowed by the Club as the sole horse-racing authority in Hong Kong to enter into their apprenticeships. They show the Club acting in that capacity and do not show a relationship of employer and employee.

8. Stuart-Moore JA accepted 10 points put forward by the prosecution as showing that the apprentices were employees of the Club. Two of them, the sixth ('provides him with accommodation') and the eighth ('pays him his allowance') have already been dealt with and need no further comment. The first was that it was the Club who 'engages the apprentice'. With respect, that was simply not shown. The second to the fifth were that it was the Club who

"(2)	gives him his early training;
(3)	decides if he has the necessary skills;
(4)	assigns him to a trainer, who has applied to take on an apprentice, in order to supervise his further training;
(5)	requires him to enter into indentures with the nominated trainer;"

The evidence was that, potential apprentices were selected by the Club from applicants, whereafter training was provided in the course of which their suitability was decided by the Club. It was certainly not stated in the evidence that the Club assigned an apprentice to a trainer but even if it had been it would only have shown a further exercise of the Club's administrative functions. So far as the requirement of entering into indentures with a nominated trainer is concerned, it is axiomatic that an apprenticeship requires indentures. The seventh was that the Club

"(7) imposes upon him restrictions as to when he can ride."

It is enough to say that for obvious reasons Rule 61 provides that

"61.	No person shall ride in any race under these Rules until he has obtained a Jockey's or Amateur Rider's licence issued by the Stewards of the Jockey Club pursuant to these Rules."

Rule 62 provides that no licence will be granted unless a person shall have been apprenticed to a trainer licensed or approved by the stewards of the Club or has held a licence under the Rules of Racing of a recognised Turf Authority. The ninth and tenth factors were that the Club

"(9)	pays the apprentice's fee for riding which is 50% of the fee paid by the Jockey Club to a jockey; and
(10)	pays a percentage of the prize money to the apprentice if he is placed in the first five horses past the winning post."

These two matters do not arise from the terms of the indentures. They arise, instead, from the Rules of Racing but their factual bases are incorrect. Rule 167 provides that

"167.	The following deductions shall be made from the amount won by the winner, minor placed horses and horses placed fourth and fifth of every race ....
	(ii)	For the rider who rode the horse as laid down in Rules 70 & 71 ...."

Rule 70 provides that a riding fee is to be paid to the jockey which, in the definitions section of the Rules is defined as including an apprentice jockey save in the absence of express reference, is to be addition to the prize. Rule 71(1) simply provides that the riding fees for apprentices shall be half the amount payable to jockeys. The result of this is that the riding fee and the prize money paid to an apprentice comes not from the Club but from the prize money won by the owner of the horse although, as a matter of administration, it is paid through the Club.

9. Having regard to what has been said, it was not shown that the apprentices were employees of the Club at the relevant time. Construction of a statute in the purposive sense is something that is well understood. However, there is no room for such a construction when the words of the legislation do not allow it. Section 4 is concerned with employees of a public body such as the Club. Section 9 deals, generally, with agents. It is not necessary to decide whether, in the context of section 4, "employee" may include an agent. Both concepts involve an engagement to do something for the employer or principal. These apprentices did not undertake to do anything for the Club. So there is no warrant for regarding the apprentices as being in either group vis-a-vis the Club. The apprentices were not employees of the Club within the generally accepted meaning of that word. It is unnecessary to consider whether or not they were employees of anyone else.

10. This appeal is allowed.

Mr Justice Bokhary PJ :

11. I agree.

Mr Justice Fuad NPJ :

12. I agree.

Lord Hoffmann NPJ :

13. I agree.

Mr Justice Litton PJ :

14. The Court unanimously allows the appeal, quashes the Court of Appeal's judgment and the convictions. The Court awards costs in the appellant's favour, incurred in this Court and in the Court of Appeal, unless written representations are made within 14 days of the handing down of this judgment. In this event the opposing side will have 14 days to respond. The Court will then determine the issue of costs on the parties' written representations.