XCHRX SHIH MEI CHIN v. YEN HING FACTORY LTD.

HCA 20691/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 20691 OF 1998

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J U D G M E N T

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1. This is an appeal by the Plaintiff against the order of the master dismissing her claim.

2. The Plaintiff claims against the Defendant for just over $2 million as director's fee for the period from July 1996 to November 1998.

3. The Defendant's defence was that the Plaintiff was not entitled to the salary payment because she had voluntarily resigned and ceased to be an employee of the Defendant as of 30th June 1996.

4. It is suggested that as from the 30th June 1996, the Plaintiff has been an non-executive director and therefore not entitled to receive a salary.

5. In support of the aforesaid contention, the Defendant relied on two letters dated 12th June 1996 and 14th June 1996. The relevant extracts from the two letters are set out as follows:-

6. It is also the Defendant's contention that the Plaintiff ceased to turn up for work and ceased to carry on any sort of executive role after 30th June 1996.

7. Whilst the Plaintiff might have stopped returning to the office for active management work since 30th June 1996, there is no dispute that she remains a director of the Defendant until now. She also holds 33% of the shares in the Defendant's company.

8. The Plaintiff's claim is for director's fee and not for salary as an employee. There is no dispute that she is still a director, be it an non-executive one.

9. Whether as an non-executive director, she is still entitled to be paid director's fee is of course a matter of evidence and can only be properly determined at the trial.

10. In so far as the Plaintiff's claim was dismissed on the basis that it was a claim for salary and that she had ceased her employment with the Defendant, the decision was reached on a falsed premises. The mistake arose out of the attempt on the part of the Defendant's solicitor to translate into English the Plaintiff's Statement of Claim which was filed in Chinese.

11. "Director's fee" was wrongly translated as "salary" which mistake was followed up on in the Defence.

12. The mistake was further compounded when the Defendant's solicitor included the wrongly translated documents as part of the bundle of documents for the hearing.

13. A monolingual solicitor in Hong Kong may well require the translation of documents to assist him in the conduct of litigation, but such translated documents should never be made part of the Court documents, otherwise a wrongly translated document will mislead not just the solicitor concerned but the Court as it did in the present case.

14. To strike out a claim summarily is a serious step to take and it should only be taken when there is no arguable case against the Defendant.

15. The Plaintiff's claim may not have been too well set out as she is acting in person. The Defendant may well be entitled to further and better particulars.

16. But in so far as the claim is for director's fee and there is no dispute that the Plaintiff is still a director of the Defendant, there is no valid basis to strike out her claim at this stage even though she may have stopped taking an active role in the day to day management of the Defendant's company.

17. In the circumstances, the appeal must be allowed and the order of the master dated 22nd July 1999 is set aside.