PARK CHUL SOO v. SWEE KHENG BUILDING MATERIAL CO. LTD

HCLA 1/2021

[2021] HKCFI 2942

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 1 OF 2021

(ON APPEAL FROM LABOUR TRIBUNAL

CLAIM NO. 1453 OF 2019)

____________________

BETWEEN

____________________

________________

DECISION

________________

1.  This is the application for leave to appeal by the Defendant against the Award made by the Labour Tribunal dated 6 January 2021. By that Award, Judgment was given against the Defendant for arrears of wages and interest in favour of the Claimant.

2.  Under the governing statute, s.32 of the Labour Tribunal Ordinance, Cap 25, the right to appeal is confined to points of law or where the award is outside the jurisdiction of the Tribunal.

3.  The applicable principles of law are trite and had been set out in, inter alia, Wai Mei Lai Stella v Viya Pramita, unrep, HCLA 3/2010, 28 June 2011, per Au J (as he then was) at §16. The same may be summarised as follows :

(1) The threshold onus of an application for leave is to show that the intended appeal has arguable grounds;

(2) Apart from error made on what may be regarded as pure point of law, leave will be granted if the tribunal’s determination (a) was made without regard to relevant factors, (b) was made without evidence, or (c) there was a failure to discharge the statutory duty to investigate and such failure had given rise to injustice in that a fair and proper determination of the claim could not be attained.

4.  This application is based on a set of perfected grounds of appeal which contained 6 grounds.

5.  The material facts can be briefly stated. The Claimant and Mr Lim, who were the only witnesses at the hearing before the Tribunal, set up the Defendant in 2004 and managed it jointly. The Claimant was a director of the Defendant until 31 July 2017. Due to his personal circumstances, Mr Lim was not appointed a director of the Defendant until July 2017, but he nominated his brother to be so appointed who was later replaced by Mr Lim’s son. The Tribunal found that Mr Lim was a de facto director of the Defendant at the material times.

6.  Both the Claimant and Mr Lim were paid a monthly salary of HK$20,000 by the Defendant from January 2009 until December 2010 when its business ran into trouble. The two of them agreed to withhold the receipt of their salaries until profitability returned. That agreement was evidenced by an email dated 2 December 2010.

7.  There was a period of time, from September 2012 to end of 2013 and around 2014, when the Claimant was stationed in Singapore to look after a related company of the Defendant.

8.  In June 2012, the Defendant had returned to profitability and Mr Lim was reimbursed his withheld salaries. However, the Defendant refused to pay the Claimant on the ground that the Singaporean business had not returned to profitability.

9.  The Reasons for Judgment of the Tribunal dated 8 February 2021 (“R/J”) was a well written 48-page document in which the issues were identified, the applicable law was applied and the evidence were analysed with meticulous care. There was a good deal of documentary evidence before the Tribunal and, importantly, the Tribunal had accepted the evidence of the Claimant as reliable but rejected that of Mr Lim.

10.  I should say at the outset that I am unable to find any one of the 6 perfected grounds as constituting proper challenge on point of law for which leave should be given. The grounds reflected a carpet-bombing approach where the Defendant seeks to re-run its case. The reasons for rejecting the grounds may be stated succinctly as follows.

Ground 1: the Claimant was not entitled to “salaries” in his capacity as director

11.  The Defendant had placed much emphasis on the characterisation by the Claimant (there was no suggestion that he is a lawyer) of his claim, ie, he claimed to have been employed as a director. However, there was no legal inhibition for a director to be employed by the company in additional to holding the office of director. The Tribunal had identified the applicable legal principles, analysed the evidence and applied the law on the evidence accepted by it.

12.  The Tribunal was not bound by the Claimant’s characterisation of his claim. It was required to reach a conclusion by analysing the evidence and applying the law, which it did. The Tribunal found that there existed a contract of employment between the Defendant and the Claimant, albeit one not in writing.

13.  The finding, which was primarily one of fact, cannot be challenged. I would add that the finding was consonant with common sense. It was common ground that the Defendant was run by both the Claimant and Mr Lim. Neither of them had received any director’s remuneration in return for their work (in the case of Mr Lim, such remuneration could have been paid to his nominated director). Apart from the supporting documentary evidence such as the MPF contributions by the Defendant and the Claimant, the irresistible inference was that the Claimant was paid for his work by way of the HK$20,000 monthly salary. It is difficult to see that the salary was not paid pursuant to a contract of employment.

Ground (2): there was no evidence for the finding that an employment relationship existed from September 2012 onwards

14.  This is plainly an impermissible re-run of the Defendant’s factual case. The relevant evidence were carefully scrutinised by the Tribunal, including the termination of the Claimant’s MPF contribution to save the expenses of the Defendant.

15.  In para 68 of the R/J, the Tribunal found that: “[t]he work emails indicated that the Claimant devoted his time to and was involved in the operation and decision-making of the Defendant during the time he was physically in Singapore and after his return to Hong Kong”.

Ground (3): having found that the contingent event under the December 2010 Agreement happened in June 2012, the Deputy Presiding Officer should have held that all of the Claimant’s claims which were based on the December 2010 Agreement should have been time-barred

16.  There is no merit in this ground. The Tribunal had fully considered the issue and indeed disallowed part of the claim by reason of the 6-year time bar.

17.  I see no flaw in the Tribunal’s analysis that the salaries fell due (and the causes of action arose) on a monthly basis. Hence, it upheld only the claim for salaries payable from 7 May 2013 to 6 May 2019, which was not time-barred. It was noted in para 140 of the R/J that such claim was conceded by the Defendant.

Ground (4): the December 2010 Agreement was in any event highly uncertain, unenforceable, and not binding against the Defendant

18.  I am unable to find merit in this ground :

(1) The uncertainty and unenforceable issue was not raised before the Tribunal;

(2) The documentary evidence before the Tribunal was that the Defendant’s accountant stated in an email that the Defendant was making a profit and would be able to honour the payment of salaries to Mr Lim. The given reason not to pay the Claimant (see para 8 above) was rejected as a fabrication by the Tribunal[1];

(3) In respect of the non-binding argument, in my view the proper analysis is that both the Claimant and Mr Lim had agreed, for the benefit of the Defendant, not to draw their salaries until the Defendant had returned to profitability. I am unable to see any consideration provided by the Defendant in return for the temporary forbearance by the two gentlemen. Hence, there would have been no bar to the Claimant if he were to go back on his words and sought payment of his outstanding salaries before the Defendant returned to profitability. In short, the point is a red-herring.

Ground (5): the Deputy Presiding Officer had failed to investigate whether the Claimant was precluded from making his salaries claim under the doctrine of estoppel, waiver, acquiescence and/or laches

19.  This ground is equally unmeritorious :

(1) The argument was not raised below;

(2) In any case, I fail to see what unconscionability there was when the Claimant was only claiming what was due to him. Nor can I see any unequivocal representation by the Claimant that he would give up his outstanding salaries;

(3) I am unable to agree to the Defendant’s submission that the evidence cried out for investigation by the Tribunal on the estoppel issue.

Ground (6): the Deputy Presiding Officer took into account irrelevant matters regarding the Defendant’s payment of salaries to Mr Lim which influenced and formed part of the basis of her decision to award part of the Claimant’s claim

20.  The Defendant rightly accepted that this was not its strongest ground of appeal.

21.  In my view, the Tribunal had correctly taken into account the treatment by the Defendant of Mr Lim as part of the relevant evidence in reaching its findings on the claim before it. The Defendant was a small company ran by the Claimant and Mr Lim, and they entered into the December 2010 Agreement. The treatment to Mr Lim clearly had a bearing on the credibility of the Claimant’s evidence, eg, there was no written employment agreement for Mr Lim also.

Disposition

22.  For these reasons, this application is dismissed.