TYRRELL, BENJAMIN JOHN v. WRITER RELOCASIA LTD

HCLA 14/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 14 OF 2013

(ON APPEAL FROM LBTC 215 and 579 OF 2013)

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D EC I S I O N

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1.  This is an application by the defendant for leave to appeal against an award/order of Ms Isabella Chu, Deputy Presiding Officer of the Labour Tribunal made on 18 July 2013 and her award/order made on 12 August 2013 which dismissed the defendant’s application to set aside and review the 18 July award/order.

2.  This application is made under section 32(1) of the Labour Tribunal Ordinance, Cap 25.  The defendant accepts that the application can only succeed on the grounds that the awards/orders of the Deputy Presiding Officer are either erroneous in point of law or outside the jurisdiction of the tribunal.

3.  This first issue is the defendant’s complaint that the Deputy Presiding Officer did not allow the defendant to be represented by its chosen representative, Mr Desai.  The defendant had all along been represented by Mr Chotwani.  There were however previous applications for Mr Desai to be appointed in place of Mr Chotwani.  Mr Desai was one of the managing directors and the group head of legal and compliance section of the defendant’s parent company.  The previous applications were not acceded to by the tribunal because Mr Desai was not an employee or director of the defendant, and therefore not entitled under section 23 of the Labour Tribunal Ordinance to represent the defendant. 

4.  The defendant made the same application again at the commencement of the trial.  It was opposed by the claimant.  The Deputy Presiding Officer refused the application on the grounds that the original resolution by the board of the defendant appointing Mr Desai as its director was not submitted and the defendant had not notified Hong Kong Companies Registry about the appointment of Mr Desai as a director despite the lapse of a month from the alleged appointment to the trial.  For these reasons, the Deputy Presiding Officer doubted the genuineness of the appointment.  The Deputy Presiding Officer therefore upheld the opposition by the claimant.

5.  Mr Sakhrani, counsel for the defendant submitted that the lack of the original resolution was not made known by the Deputy Presiding Officer to the defendant at the time, and if the Deputy Presiding Officer should have allowed half an hour indulgence to the defendant, the original resolution would have been tabled before the tribunal. 

6.  However, the trial was scheduled to commence at 9:30 am on 15 July, but Mr Desai only arrived at the tribunal at 11:20 am. thereby delaying the commencement of the trial.  I see no reason why the tribunal should have offered more indulgence to the defendant.  The original resolution should have been before the tribunal without prompting. 

7.  Furthermore, the availability of the original resolution would still not have cured the lack of notification of the appointment to the Companies Registry.  It is this lack of notification that cast doubt in the mind of the Deputy Presiding Officer about the genuineness of the appointment of Mr Desai as a director of the defendant.

8.  In any case, there was Mr Chotwani who was present at the tribunal and could have continued to represent the defendant. He was also a witness for the defendant in the case.  The tribunal had invited the defendant to appoint Mr Chotwani to continue representing the defendant, but Mr Chotwani declined for the purported worry about possible criminal liability.  But he gave no elaboration of what criminal liability that he was worrying above.

9.  It is hard to imagine how Mr Chotwani could have attracted criminal liability by representing the defendant to defence the Labour Tribunal claim.  This is particularly so when Mr Chotwani had been performing such role previously in the same proceedings. He also took up this role at the later stage when the defendant applied to set aside and review the award/order of 18 July.

10.  It was therefore not unreasonable for the Deputy Presiding Officer to have considered Mr Chotwani’s refusal as a move to force the tribunal to allow Mr Desai to be appointed as the defendant’s representative or to plant a ground of appeal on the basis of the lack of representation for the defendant at the trial.  Therefore it is understandable for the Deputy Presiding Officer to have commented in her judgment given on 24 October 2013 that the defendant’s putting forward of Mr Chotwani’s excuse for not representing the defendant was a tactical move.

11.  The defendant also complained that the Deputy Presiding Officer had commented that the defendant’s case before the tribunal was conducted negligently.

12.  However, one should read the comment in context.  It was made in para 29 of the judgment and not in the course of the trial.  Para 29 reads:

“29. I cannot see any unfair prejudice done to the Defendant company as alleged. On the contrary, I have acted my utmost to ensure a fair trial by allowing the Defendant company to take all possible procedural steps to remedy the loopholes of the Defence case caused by the negligent manner of the Defendant company in conducting this trial hearing.”

13.  The obvious failings of the defendant were its failure to comply with a previous direction of the tribunal to produce certain documents resulting in the need for it to apply to the tribunal in the course of trial to produce the same and the failure to properly prepare the application for appointing Mr Desai as a director of the defendant and for him to represent the defendant at the trial.

14.  In the circumstances of the case, I do not think the comment by the Deputy Presiding Officer in para 29 of the judgment can be taken as a manifestation of her having a clouded approach to the case or that she was biased towards the defendant.  In fact, despite Mr Desai not being allowed to represent the defendant at the trial, the defendant was allowed all opportunities to call evidence and produce documents. 

15.  In this application, the defendant relies on Chan Yat San v Fortune Lucky (296) Ltd, unreported HCLA 18/2012 per Mimmie Chan J, 6 August 2013 where the learned judge said:

“Whilst the Tribunal has the power under the Ordinance to determine a claim in the absence of a defendant, in circumstances when it considers ‘that the facts relating to the claim are sufficiently established’, it cannot be disputed that a defendant has a right to the fair determination of the case and the claims made against it. It is trite, and the courts have highlighted that it is the essential right of a party to challenge the evidence of its opponent by cross-examination, to test the claimant’s case, to cross-examine the claimant, and to be given the opportunity to call its own witnesses to give evidence. (Emphasis added).”

16.  However, the facts in Chan Yat San are very much different.  In that case, the only shareholder and director of the defendant was in a coma lying in a hospital.  There was no one who could represent the defendant at the trial.

17.  In the present case, Mr Chotwani had been representing the defendant in the hearings before the trial.  He also resumed the representative role when the defendant applied to set aside and review the 18 July award/order. However, the defendant wanted Mr Desai to be the defendant’s representative at the trial.  But then the defendant handled the application to appoint Mr Desai as its representative negligently resulting in its defeat by the opposition of the claimant.

18.  Counsel for the defendant also stated that the defendant was prejudiced in not having anyone to marshal its defence despite its evidence was admitted (para 16 of written submissions) or in not being able to freely test the claimant’s case (para 18 of the written submissions).  However, if the defendant has indeed been so prejudiced, that was the result of the defendant’s tactical move.  Mr Chotwani could have represented the defendant at the trial.  To accede to this ground of appeal is to allow such tactical move to prevail.

19.  In any case, the claim is a simple one.  It is for employment benefits based on an employment agreement and a separation agreement (which set out the terms for the parting of the claimant from the defendant).  The defendant could not deny the claims, but it wanted to cloud the simple issues by dragging in another dispute between the parties in HCA 2366/2013.  That action arose out of the purchase of the defendant’s shares by the defendant’s present parent company from the claimant and his previous fellow shareholder of the defendant.  The issues there have nothing to do with this claim for employment benefits.

20.  The next matter is the tribunal’s refusal of the defendant’s application to adjourn the trial to a date no earlier than 14 days from the conclusion of the mediation of HCA 2366 of 2013.  The Deputy Presiding Officer refused the application.  She said in paras 14 and 15 of her judgment as follows:

“14. …Having carefully considered the submissions made by both parties, the relevant documents produced in the said application and the relevant legal principles, the Tribunal has refused the Defendant company’s application to adjourn on the grounds that: (i) HCA 2366 of 2012 concerned different parties, the defendant therein was the Parent Company but not the Defendant company in the present two actions; (iii) HCA 2366 of 2012 had no direct bearing or relevance in the present two actions; and (iv) the issues to be determined in HCA 2366 of 2012 were different from those to be determined in the present two actions.

15. The issues to be tried in the present two actions concern arrear of wages, expenses and annual leave pay pursuant to the Employment Contract and the Separation Agreement.  Therefore, the Tribunal did not see any reason to delay the whole trial in particular that the said application could have been made during the adjournment period but should not have been made at the beginning of the trial hearing without any advance notice to the Claimant.”

21.  The Deputy Presiding Officer in paras 11 to 13 of her judgment also referred to an earlier application by the defendant to transfer the two claims to the Court of First Instance for it to be deal with together with HCA 2366/2012.  That application was dismissed on 27 May 2013.  The Deputy Presiding Officer commented that if the defendant was unhappy with the earlier decision, it could have applied for review or appealed instead of applying at the commencement of the trial to adjourn the trial.  The defendant now complains that the Deputy Presiding Officer had at the trial allowed herself to be put into the straitjacket of the earlier refusal to transfer.  I do not think that was how the Deputy Presiding Officer had approached the application to adjourn.  She had given clear reasons for dismissing the application to adjourn in paras 14 and 15 as referred to above.

22.  The defendant also complained that they had asked for the reasons for the refusal of transfer but was given none.  But the failure to provide reason could not have stopped them from applying for review or to appeal against the refusal.

23.  In support of the argument that the Deputy Presiding Officer should have allowed the application to adjourn, the defendant submitted that:

“(a) The Share Purchase, Shareholder and Employment agreements were all signed on 19 July 2011 with the intention that they be considered together and were part of one transaction involving D, the claimant and the Parent Company (P.N. Writer, the current 70% shareholder of D);

(b) The issues that arise in relation to the claimant are intertwined in as much as the issues arising in the High Court proceedings between the Parent Company and the claimant are similar. In particular:-

(i) The issue regarding collection of monies from D’s customers by the claimant and the failure of the claimant to deposit the same with D – thereby amounting to acts against the interest of D which had been raised in the High Court proceedings – was also an issue which the DPO addressed;

(ii) Other instances regarding acts/omissions on part of, inter alia, the claimant which are prejudicial and against the interest of D, including the manipulation of accounts, where such acts also amount to breach of the Employment Agreement.”

24.  The issue of collection of monies is a matter of fact which had been properly and adequately dealt with by the Deputy Presiding Officer in her judgment.  The other allegation of other instances is devoid of particulars.  Furthermore, allegations of manipulation of accounts were not advanced as a defence at the tribunal.  The grounds of defence (which were not accepted by the tribunal) are summarised in paras 32 and 33 of the judgment:

“32. The Defendant company however alleged that the Claimant’s misappropriation of the company’s fund and the reckless claims on reimbursement expenses and putting up defamatory statement against the Defendant company have constituted breaches of the Separation Agreement.

33. The Defendant company further alleged that since the Defendant company was obliged to pay the Claimant only under the Separation Agreement, the Claimant’s breach of the Separation Agreement gave the Defendant company the right to withhold the Claimant’s salary.”

25.  These matters of fact, insofar as they had been raised with sufficient particulars to deserve adjudication, had been properly adjudicated by the Deputy Presiding Officer.  The Deputy Presiding Officer also pointed out that section 32 of the Employment Ordinance, Cap 57 would not have allowed the deduction of wages on account of these allegations.  There is therefore no point in transferring these claims to the CFI or to adjourn them until after the mediation of HCA 2366 of 2012.

26.  The defendant on this application also referred to HCA 1372/2013 which was instituted by the defendant against the claimant in this court after the trial of the tribunal claims.  However there is only an endorsement of claim on the writ which alleges breaches by the claimant of the Employment Agreement.  It is devoid of particulars of any breach.  There is still no statement of claim filed up to today.  That action as at today cannot assist the defendant in this application for leave.

27.  The defendant also refers to Ng Si Li t/a Gallium v Yeung Tsz Shan, unreported, HCSA 9/2012 to say that where there are allegations of misappropriation of monies by the employee which is tied up with payment of wages, then the matter is outside the jurisdiction of the tribunal.  I think that is not a proper reading of the decision which was made by me.  The nature of that case is set out in para 1 of the judgment in that case:

“1. The appellant has made a claim of misappropriation of money against the respondent at the Small Claims Tribunal. The claim is for HK$18,000. The respondent’s defence is that the money was for payment of her wages. The respondent has also made a claim at the Labour Tribunal No. LBTC 1682/2011 against the appellant herein for arrears of wages, payment in lieu of notice of termination and severance payment. The total amount of the claim exceeds HK$60,000.”

28.  There is no similar allegation here.  The claimant is not using salary as a ground to defendant any claim of theft by the defendant.

29.  I think the Labour Tribunal claims could and should have been dealt with in the tribunal.  To apply to transfer it to this court or to adjourn it until after the mediation of HCA 2366 of 2012 is to delay the resolution of the tribunal claim.

30.  The defendant has also submitted that there was apparent bias on the part of the Deputy Presiding Officer as she had sit through the trial of a claim made by a former fellow shareholder of the claimant against the same defendant.  The Deputy Presiding Officer explained that she had attended that trial and the trial of some other cases from the public gallery before her appointment as a Deputy Presiding Officer.  She attended those trials just to familiarise herself with the procedure of the tribunal. 

31.  I do not think that the fact that the Deputy Presiding Officer had heard from the public gallery the whole or part of the trial of the claim of a former fellow shareholder of the claimant against this defendant would have created any apparent bias in the Deputy Presiding Officer against this defendant thereby affecting the suitability of the Deputy Presiding Officer to conduct the trial of these claims.  I do not think this can give rise to any suggestion of apparent bias.

32.  Finally, there is a suggestion that this hearing should be adjourned pending the availability of the transcript of the trial at the tribunal.  The purpose is to ascertain whether Mr Desai had raised the above question of apparent bias on the 2nd day of the 3-day trial or after judgment was given.  I do not think it is necessary to adjourn the hearing of this application to wait for the transcript for this purpose.  If the Deputy Presiding Officer indeed had apparent bias against the defendant, then regardless whether the challenge was raised on the 2nd day of the trial or only after judgment, the defendant is still entitled to rely on it.  Hence there is no need to wait for the transcript.  But I have already ruled above that on the facts of this case, there could not have been such bias on the part of the Deputy Presiding Officer.

33.  Since the defendant has not made out any arguable case on error of law or want of jurisdiction on the part of the tribunal, this application is dismissed.

34.  There is also an application for stay of execution pending appeal.  It was heard on 30 October and was adjourned to 8 November.  Since no leave to appeal is given, there is no point in staying the execution of the awards/orders.  I therefore dismiss the application for stay as well.