LAM TUNG HEI v. BRIGHT CHARTER (HONG KONG) LTD AND ANOTHER

HCLA 149/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 149 OF 2003

(ON APPEAL FROM LBTC 6076/2003)

LAM TUNG HEI v. BRIGHT CHARTER (HONG KONG) LTD AND ANOTHER

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DECISION

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1. This is the 1st and 2nd defendants' application for leave to appeal against the decisions of the Presiding Officer made on 7 and 13 November 2003 refusing their applications for review.

Background

2. The claimant is a cook. On 15 July 2003, the claimant issued proceedings in the Labour Tribunal against the 1st defendant for arrears of wages, wages in lieu of notice, severance pay, sickness allowance and also annual leave and holiday pay, totalling $94,684.40. The claimant's case is that he had been constructively dismissed under section 10A of the Employment Ordinance.

3. The 1st defendant filed with the Labour Tribunal a statement of defence. In it, a Mr Kwan Ying Kit (關英傑) was named as the 1st defendant's representative. The 1st defendant disputes the claim principally on the ground that the claimant had since 15 May 2002 ceased to be its employee. It is said that he has since become a consultant of the 2nd defendant under a consultant contract.

4. Subsequently, the claim was amended by adding the 2nd defendant as a party. The 2nd defendant disputes the claim on the ground that the claimant was not an employee, but only a consultant of the company.

5. At the first hearing on 7 August 2003, Mr Kwan appeared as the authorized representative of the 1st defendant. A letter of authorization to that effect was provided to the Tribunal. A Miss Siu Pui Ying (蕭佩英) who claimed to represent the 2nd defendant was also present. Miss Siu had previously given a witness statement dated 4 August 2003 in which she described herself as an employee of the 2nd defendant. At this hearing, the Presiding Officer granted leave to amend the claim by adding the 2nd defendant as a party. The Presiding Officer gave directions for the 2nd defendant to provide a statement of defence and to produce documents. The case was adjourned to 16 September 2003 for mention.

6. At the second hearing on 16 September 2003, Miss Siu appeared and was stated on the Tribunal record as representing both defendants. She provided to the Tribunal a letter of authorization issued by the 1st defendant. She informed the Presiding Officer that the person in charge was not in Hong Kong. At her request, the hearing was further adjourned to 6 October 2003 with costs against the defendants.

7. At the further adjourned hearing on 6 October 2003, Mr Kwan appeared and informed the Presiding Officer that he represented both defendants. For reasons that I shall return to later, the hearing was again adjourned to 9 October 2003.

8. On 9 October 2003, Mr Kwan appeared and he again informed the Presiding Officer that he represented both defendants. He explained that the arrears of wages were occasioned by financial difficulties experienced by the defendant(s), and further indicated willingness to discuss settlement with the claimant. The proceedings were then adjourned to enable the discussions to take place. The claimant and Mr Kwan eventually signed a settlement agreement ("the Settlement Agreement"), under which the defendants were to pay the claimant $68,000 by two instalments in full and final settlement of the claim. An award embodying the terms of agreement was issued on the same date.

9. By 2 letters dated 10 October 2003, the 1st and 2nd defendants informed the Tribunal that the Settlement Agreement was null and void in that Mr Kwan had no authority to bind the 2 defendants. They applied to review the award. On 7 November 2003, the Presiding Officer heard the defendants' review applications and dismissed them.

10. On 10 November 2003, the defendants applied for a review of the 7 November 2003 order and a stay of execution of the award. On 13 November 2003, the Presiding Officer dismissed the defendants' applications without a hearing.

The leave application

11. On 28 November 2003, the defendants applied for leave to appeal against the decisions made on 7 and 13 November 2003 on the ground that the decisions are erroneous in law. The principal contention is that there was, in the case of the 1st defendant, no written authorization authorizing Mr Kwan to enter into any settlement agreement with the claimant. In the case of the 2nd defendant, it is said that there was no written authorization from the 2nd defendant authorizing Mr Kwan to represent it in the Tribunal proceedings or to enter into any settlement agreement with the claimant. Additionally, the defendants contend that the Presiding Officer erred in refusing their second review applications and in not considering their applications for stay of execution.

The 1st defendant's arguments

12. The 1st defendant accepts that it had authorized Mr Kwan to represent it in the Tribunal proceedings. As noted above, Mr Kwan was named as the 1st defendant's representative in the statement of defence. The authorization is admittedly a general one that does not qualify the authority of Mr Kwan. What the 1st defendant has sought to argue is that Mr Kwan had at the third hearing on 6 October 2003 stated that he did not have any authority to enter into settlement agreement, such that the Presiding Officer ought to ascertain at the subsequent hearing on 9 October 2003 whether Mr Kwan had the requisite authority to enter into settlement agreement with the claimant.

13. What happened at the hearing on 6 October 2003 was that Mr Kwan told the Presiding Officer that he could not represent the defendants to settle with the claimant, and he had to telephone the defendants to discuss the matter. As a result of Mr Kwan's indication that he could not make decisions for the defendants, the hearing was adjourned so that the defendants could be properly represented. It was the Presiding Officer's specific direction that the defendants should send a representative who was able to make decisions and answer questions from the bench.

14. At the subsequent hearing on 9 October 2003 when Mr Kwan again appeared, he confirmed to the Presiding Officer that he was, on that occasion, in a position to deal with questions from the Court. He further said that he was prepared to undergo settlement negotiations with the claimant.

15. Having regard to what Mr Kwan told the Presiding Officer on this last hearing and bearing in mind the Presiding Officer's previous direction that the defendants should be represented by someone who was able to make decisions on their behalf, the 1st defendant's argument that the Presiding Officer had been put on notice that Mr Kwan had no authority to enter into the settlement agreement with the claimant is untenable.

16. On the contrary, by nominating Mr Kwan as the company's representative in the statement of defence and by authorizing him to represent the 1st defendant in the Tribunal proceedings, there is no doubt that the 1st defendant had held Mr Kwan out as having full and unqualified authority to act on its behalf. It matters not that the 1st defendant had in fact not authorized Mr Kwan to settle the claim with the claimant.

17. Although a presiding officer is under a statutory duty to investigate relevant issues, it is not an absolute duty. For a failure to give rise to a valid ground of appeal, it must be shown that the lack of investigation gives rise to injustice in that a fair and proper determination cannot be attained: Chan Suk Bing Angie v. Harbour Phoenix [1992] 2 HKC 459 at 462H-I; see also Wong v. Five Star Wine Ltd (unreported) HCLA 35 of 2001 at para. 14 and Shum v. Ailec International (Hong Kong) Ltd (unreported) HCAL 122 of 2002 at paras. 10-11.

18. In the present case, given the 1st defendant's statement of defence, the letter of authorization, the fact that there had several adjournments to enable the defendants to be properly represented and in view of what Mr Kwan said at the hearing on 19 October 2003, the Presiding Officer cannot reasonably be put under a duty to investigate the extent of Mr Kwan's actual authority. If indeed Mr Kwan's authority did not extend to entering into binding settlement, it would be incumbent upon the 1st defendant to bring that specifically to the attention of the Tribunal. In the circumstances, the lack of investigation does not result in any injustice in the sense explained by the cases.

19. Mr Leung argues that the Settlement Agreement does not comply with the requirements of section 15(7) of the Labour Tribunal Ordinance in that the terms were not embodied in the prescribed statutory form (Form 10). But section 15(7) is not to be read in isolation. It is not dealing with settlement agreement in general. Rather it is referring to a settlement reached outside the Labour Tribunal and with the assistance of the Labour Department. This construction becomes apparent if one were to read the entire section 15, and particularly sub-sections (3) to (9), as well as the contents of Form 10. The Authorized Officer referred to in Form 10 is defined in section 2 of the Ordinance to be a public officer who has been authorized by the Commissioner for Labour to assist in conciliation.

20. There is thus no basis for the 1st defendant to challenge the validity of the Settlement Agreement. It follows that there is no basis for challenging the Presiding Officer's dismissal of the review applications and the refusal of the stay application. It should also be pointed out that it is not incumbent upon a Presiding Officer to hold a hearing for every review application, especially in the case of a second review application. Otherwise, there will be no finality to Tribunal proceedings.

21. The 1st defendant has failed to demonstrate that it is arguable that the decisions of the Presiding Officer are erroneous in law. Accordingly, its application for leave to appeal has to be refused.

The 2nd defendant's arguments

22. In the case of the 2nd defendant, the application is put on the basis that the 2nd defendant had not given any written authorization authorizing Mr Kwan to represent it in the Tribunal. It is not exactly clear whether the 2nd defendant is suggesting that Mr Kwan did not have actual authority to appear on behalf of the 2nd defendant. But in the applications for review before the Tribunal, the 2nd defendant had stated that it had not authorized Mr Kwan to represent it in the proceedings. The Presiding Officer in his Reasons for Decision rejected this contention and held that Mr Kwan was authorized to represent both defendants.

23. Whether Mr Kwan had actual authority to appear on behalf of the 2nd defendant at the various hearings is a question of fact. The conclusion of the Presiding Officer is supported by what the 2nd defendant's authorized representative, Miss Cheung Wing Wai (張穎慧), said at the review hearing on 7 November 2003. According to Miss Cheung, Mr Kwan was throughout representing the 2nd defendant, but he was supposed to report to the directors and the senior management and to act on their instructions: Transcript p.22 lines F-I. What Miss Cheung said is consistent with what Mr Kwan told the court at the various hearings, namely, he appeared on behalf of both the defendants.

24. Additionally, Mr Kwan had also at the 6 October 2003 hearing informed the Tribunal that he was employed by the 2nd defendant, and because the 1st defendant was managed by the 2nd defendant, he also represented the 1st defendant.

25. To the extent the 2nd defendant is now arguing that Mr Kwan had no authority to appear on its behalf, it must fail as a matter of fact. There were ample materials upon which the Presiding Officer was justified in coming to the conclusion that Mr Kwan was authorized to appear for the 2nd defendant. There is no error of law.

26. The 2nd defendant also argues that Mr Kwan had no authority to enter into the Settlement Agreement. As in the case of the 1st defendant, the 2nd defendant had not made known to the Tribunal or the claimant that Mr Kwan's authority was in any way limited or qualified. Having regard to the fact that the 2nd defendant had sent Mr Kwan to attend the hearings at the Labour Tribunal, especially on 9 October 2003 after the Presiding Officer had directed that the defendants should send a proper representative who could make decisions and answer queries, it is open to the Presiding Officer to conclude that Mr Kwan had authority to negotiate and settle the claim with the claimant on behalf of the 2nd defendant. There is no arguable error of law.

27. As to the other arguments advanced on behalf of the 2nd defendant, they are the same as those of the 1st defendant. For reasons that have been given above, they do not amount to arguable points of law. The 2nd defendant has failed to show that the decisions sought to be appealed against are arguably erroneous in law. Leave to appeal should be refused.

Conclusion

28. For the above reasons, the 1st and 2nd defendants' application for leave to appeal is dismissed.