CHAN CHI LING ELWYN v. RICHFIELD REALTY LTD

HCLA 9/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 9 OF 2013

(ON APPEAL FROM LABOUR TRIBUNALCLAIM NO 4103 OF 2012)

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REASONS FOR DECISION

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1.  The defendant was a wholly-owned subsidiary of Richfield Group Holdings Ltd, a listed company carrying on the business of inter alia property assembly and brokerage business for redevelopment purposes. The claimant commenced employment with the defendant as its project director on 10 November 2008.

2.  On 8 November 2012, the claimant filed a claim at the Labour Tribunal.

3.  Pursuant to the order/award dated 30 November 2012, the claimant and the defendant settled the claim for end of year payment, and the defendant agreed to pay the same to the claimant through the Labour Tribunal.

4.  On 7 May 2013, the claimant amended his claim form to claim for the total sum of $11,247,600.93 comprising inter alia (a) “project bonus” for completed projects (ie $100,000.00 x 51 projects less $1,000,000.00 received) in the sum of $4,100,000.00 (“Claim B Bonus”), and (b) “project bonus” for 71 「落訂項目」 (ie $100,000.00 x 71 projects) in the sum of $7,100,000.00 (“Claim C Bonus”).

5.  The parties proceeded to trial in respect of the dispute over the two items of alleged “project bonus”.  After an 8-day trial that took place in February and May 2013, the Deputy Presiding Officer found for the claimant in respect of his claim for the Claim B Bonus, but dismissed his claim for the Claim C Bonus.  By an order/award dated 5 July 2013, the Deputy Presiding Officer awarded the Claim B Bonus in the sum of $4,100,000.00 with interest in favour of the claimant and dismissed the claim for the Claim C Bonus with no order as to costs (“Determination”).

6.  On 17 July 2013, the defendant filed an application for leave to appeal against the Determination (“Leave Application”) on the grounds that the Deputy Presiding Officer:

(a)     had wrongfully ignored and/or failed to give any and/or any sufficient weight to the evidence produced by the defendant;

(b)     had wrongfully taken into account matters and evidence which he should not take into account and/or unrelated to the issue in dispute;

(c)     erred in law for reaching a decision that no reasonable tribunal could have reached and coming to  a conclusion that was perverse since there was no evidence to support it.

7.  On 19 August 2013, the defendant was granted an adjournment of the hearing of the Leave Application on the ground that the Reasons for Decision by the Deputy Presiding Officer and the transcript of the trial hearing were not yet available.

8.  In his Reasons for Decision dated 23 August 2013 (“Reasons”), the Deputy Presiding Officer found that apart from the written contracts of employment between the claimant and the defendant, there was an oral agreement whereby the defendant agreed with the claimant to pay a “project bonus” calculated on the basis of $100,000 per construction project (“Oral Agreement”).

9.  On 24 October 2013, the defendant issued an ex parte summons (“Summons”) for leave to amend the Leave Application by replacing the grounds of appeal with the perfected grounds set out in the draft Amended Application for Leave to Appeal on Point of Law (“Draft”) annexed thereto.

10.  The onus is on an applicant to show that the intended appeal has arguable grounds (see Chan Kwok Hung v Hotel Pennell Rama Company Ltd HCLA20/2009, Chu J (as she then was) (unreported, 19 November 2009)).  Whilst an appeal against a determination by the Labour Tribunal is on point of law (see section 32(1) of the Labour Tribunal Ordinance Cap 25 (“Ordinance”)), leave to appeal will also be granted if the determination was made without regard to relevant factors, was made without evidence, or there was failure to discharge the statutory duty to investigate and such failure has given rise to injustice, in that a fair and proper determination of the claim cannot be attained (see Wai Mei Lai Stella v Viya Pramita HCLA3/2010, Au J (unreported, 28 June 2011)).

11.  Mr Chow SC (with him Mr Wong), counsel for the defendant, submitted that the defendant clearly had (at least) an arguable case that the Deputy Presiding Officer had committed fundamental errors of law and had failed to discharge his statutory duty to investigate in a material way in the above senses, so that leave to appeal ought to be granted accordingly.

12.  As will be seen below, the proposed grounds of appeal (1)-(5) set out in the Draft ultimately attacked the findings made by the Deputy Presiding Officer, but as Mr Chow SC explained, such attack was not intended to be a direct challenge to the findings made but a criticism of how the Deputy Presiding Officer approached the evidence in coming to his factual conclusions.  I bear in mind section 35(2) of the Ordinance which provides that on an appeal the Court of First Instance may not (a) reverse or vary any determination made by the Labour Tribunal on questions of fact or (b) receive further evidence.  But Mr Chow SC submitted that the findings by the Deputy Presiding Officer were arguably suspect (and hence arguably liable to be impugned) in the senses set out in paragraph 10 above, which would not infringe the restriction in section 35(2) of the Ordinance. I turn to the proposed grounds of appeal.

13.  In respect of proposed ground of appeal (1), Mr Chow SC submitted that the claimant carried the legal and persuasive burden of proof to establish the Oral Agreement, but the Deputy Presiding Officer failed to apply such burden of proof correctly in that in paragraphs 36-59 of the Reasons he rejected the defendant’s case and in paragraphs 60-62 and 63-64 of the Reasons he referred to and rejected two pieces of the claimant’s evidence on the Oral Agreement, but he nevertheless considered the claimant’s case to be more believable “by comparison” and found in favour of the claimant (see paragraph 68 of the Reasons).  It was suggested that the Deputy Presiding Officer should have focused on the claimant’s allegations and considered their credibility rather than to find in favour of the claimant by considering and rejecting the veracity of the defendant’s case.

14.  In respect of proposed ground of appeal (2), which was tied to proposed grounds of appeal (1) above and (5) below, Mr Chow SC submitted that the Deputy Presiding Officer failed to apply the correct test in assessing the claimant’s evidence in respect of the Oral Agreement in that he focused on the defendant’s evidence, and failed to assess or test the claimant’s case on the Oral Agreement by reference to consistencies/inconsistencies with contemporaneous documents, inherent probabilities and internal inconsistencies.

15.  In respect of proposed ground of appeal (3), Mr Chow SC noted that although it was alleged that the Oral Agreement was made by Mr Au and Ms Wong on behalf of the defendant and both such witnesses called by the defendant denied this, they were not cross-examined by the claimant.  The Deputy Presiding Officer said such failure to cross-examine was understandable since the claimant was not legally represented (see paragraph 65 of the Reasons), but Mr Chow SC complained that given such failure to cross-examine it was incumbent upon the Deputy Presiding Officer to explain why their evidence was rejected. Mr Chow SC further submitted there was insufficient analysis to support the Deputy Presiding Officer’s rejection of Mr Au’s and Ms Wong’s evidence merely by unfavourable comment on one aspect of their evidence, ie whether they had ever heard of the term “project bonus” (see paragraphs 53-57 of the Reasons).

16.  At first blush, the defendant’s above complaints appear to be attacks on the Deputy Presiding Officer’s findings of fact.  But further review of Mr Chow SC’s submissions show that although his criticisms were targeted at findings made by the Deputy Presiding Officer, they arguably come within the potential errors that are liable to be impugned in the senses discussed in paragraph 10 above.  At this stage of considering whether to grant leave to appeal, it is inappropriate for me to analyse Mr Chow SC’s arguments in any great detail and/or to come to any definitive view, but having reviewed the Reasons, I am persuaded that proposed grounds of appeal (1)-(3) above are arguable.

17.  In respect of proposed ground of appeal (4), Mr Chow SC noted that the Deputy Presiding Officer found that:

(a)  prima facie (“初步看來”) the agreement between the claimant and the defendant was partly in writing and partly oral because (i) the claimant’s written contract of employment with the defendant made no reference to discretionary bonus and yet the same had been paid to the defendant, and (ii) the staff handbook which referred to discretionary bonus was not incorporated as part of the employment agreement  (see paragraphs 24-25 of the Reasons);

(b) given the aforesaid and the finding of the existence of the Oral Agreement, the parties intended (“雙方確有意圖”) that their agreement to be partly in writing and partly oral (which would result in the dis-application of the parol evidence rule) (see paragraph 72 of the Reasons).

18.  Mr Chow SC submitted that the Deputy Presiding Officer arguably committed two errors.  First, he argued that the Deputy Presiding Officer ought to have determined whether the parties intended their agreement to be partly oral and partly in writing since this was a question of fact and the applicability of the parol evidence rule (and hence any reference to extrinsic evidence) turned on such finding.  Secondly, he submitted that the Deputy Presiding Officer’s premise for finding that the discretionary bonus was not contractually provided for was contrary to undisputed evidence that (a) payment of discretionary bonus was expressly provided for in the staff handbook (see paragraph below) and (b) as evident from the transcript of the trial hearing on 25 February 2013 (page 18) the claimant upon questioning by the Deputy Presiding Officer accepted that such handbook constituted part of the employment agreement.

19.  Mr Chow SC suggested that the following provisions in the staff handbook arguably indicated that its terms were relevant to the employment agreement between the parties:

「二、為使閣下清楚瞭解受僱期內所須知道及遵守之事項, 公司特編此手冊, 各員工熟悉其內容, 並遵守冊內之僱傭條件及公司則例。」(前言)

「(五) 僱傭合約只扼要列出薪酬及工作時間, 其餘法則需參照員工手冊及公司通告。」(第一章)

「(一) 僱員可得的各項收入見下表:

項目/僱員	起止時間	發放時間	總寫字樓文員	市場部員工
花紅		不定時	隨僱主酌情發放」

(第二章)

「(六)此手冊為僱傭合約以外具法律效力的補充文件。」(第七章)

20.  In my view, whilst such proposed ground of appeal relates to a factual finding, Mr Chow SC’s criticism was arguably not targeted at the finding itself but at the approach to the evidence as adopted by the Deputy Presiding Officer and at how he reached his conclusion on the finding.  Having reviewed parts of the documentary and witness evidence to which Mr Chow SC brought to my attention, I am persuaded that this proposed ground of appeal is arguable.

21.  In respect of proposed ground of appeal (5), Mr Chow SC submitted that the Deputy Presiding Officer failed to take into account or otherwise investigate highly relevant and material issues in assessing the claimant’s case on the oral evidence, ie

(a) the existence of contemporaneous documents which terms were inconsistent with the Oral Agreement, eg the supplemental employment contract of 1 April 2010 that made no reference to the Oral Agreement;

(b) the inherent improbabilities against the existence of the Oral Agreement, eg the need for proper documentation of the remuneration package of the claimant as a member of the senior management of a wholly owned subsidiary of a listed company, the improbability of a person of the claimant’s background to leave a substantial part of his remuneration package undocumented, and the absence of persistent efforts by the claimant to chase for the “project bonus”;

(c) internal inconsistencies of the claimant’s evidence over the Oral Agreement, eg whether and how the claimant made the Oral Agreement with Mr Au, and what explanation was given to him on the incomplete form of the employment agreement.

22.  In my view, Mr Chow SC’s above criticisms were directed at the Deputy Presiding Officer’s statutory duty to investigate, which is an arguable ground of appeal on point of law in the senses set out in paragraph 10 above.

23.  I consider the proposed grounds of appeal above to be at least arguable. Therefore, at the hearing on 29 October 2013, I granted leave for the defendant to amend the Leave Application in the manner marked in red as per the Draft annexed to the Summons, and I also granted leave for the defendant to appeal against the Determination on the grounds specified in the Amended Application for Leave to Appeal on Point of Law.  As for costs, I also made an order that costs of the Summons and of the application for leave to appeal be costs in the cause of the appeal.