THE ATTORNEY GENERAL v. HERALD HOUSEWARE LTD

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO. 656 OF 1993

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Corm: Hon Stock, J.

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J U D G M E N T

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1. This is an appeal by way of case stated from a determination of a magistrate that an employee of the respondent company was not authorised to make a certain admission on behalf of the respondent, and that accordingly the information against the respondent be dismissed.

2. The respondent company has a sheet metal factory in Castle Peak Road. On 4th July 1991 an application was submitted to the Labour Department purportedly on behalf of the company seeking authority for it to operate a special scheme of work for the employment of women and young persons in the factory. Permission for that scheme was required by virtue of the provisions of the Women and Young Persons (Industry) Regulations ("the Regulations"), regulations which are designed for the protection of women and young persons employed in industrial undertakings.

3. The Labour Department sent a response dated 11th July. Permission was granted, subject to a number of conditions, one of which was that the company should keep a register for workers employed in each group covered by the permission and to make at register available for inspection at all times.

4. In January 1992 a Labour Department Inspector visited the factory premises and asked to see the register. None was produced. Accordingly, an information was laid which alleged that, being the employer of women or young persons in industrial undertaking, the respondent failed to maintain a register of women and young persons.

5. At all material times the Labour Department had dealt with a Madam Lam Mun-yi, an employee of the company. The application for the special scheme had been signed by her, as had another material form, and it was she who had received the Labour Department Inspector in January and told him that there was no register. It was upon that admission by her to the Labour Department Inspector that no register was maintained that the Crown relied, but the magistrate was not satisfied that she was the company’s agent to make that admission, and accordingly he dismissed the information. The Crown, aggrieved by that decision, invited the magistrate to state a case for the opinion of this court. This he has done, and the questions of law which are posed are these:

“1. Whether, upon the available evidence, I could have drawn the inference that Madam Lam was the authorised agent of the Respondent to make an admission that the register was not maintained in accordance with Regulation 16.

2. Whether, I should, upon the available evidence have drawn the inference that Madam Lam was the authorised agent of the Respondent to make an admission that the register was not maintained in accordance with Regulation 16.”

6. The Regulations are made pursuant to s.73 of the Employment Ordinance. Regulation 16 requires every employer of women and young persons in an industrial undertaking to maintain a register specifying details of each employee and the employment undertaken as well as such particulars as in the opinion of the Commissioner for Labour are required to assist the Commissioner to ascertain whether certain other regulations (for example, as to hours of employment) have been complied with. Failure to keep such a register is an offence, punishable by a fine.

7. There are a number of further provisions of the Regulations which are germane to this appeal:

(a) Regulation 8 prohibits the employment of women and young persons in an industrial undertaking unless the working hours conform with conditions there set out, and it is specified also that those hours shall be the same for all in that category in that industrial undertaking, but the Commissioner may permit departure from this requirement.

(b) Regulation 11 permits the employment of certain young persons beyond normal hours if on shift work and if the Commissioner so approves.

(c) Regulation 9(1) forbids the employment of Women or Young Persons unless there is posted at a conspicuous place a notice which particularises various details about working hours, rest days and so on.

8. The facts upon which the magistrate’s determination was based were as follows. An application was made by the respondent company dated 4th July 1991. It was in writing and sought permission to operate a special scheme. It was signed by Madam Lam whose position was described as “Staff”, and the document carried the company chop with the company’s name and the words “Personnel Department”. The case does not particularise the nature of the scheme, no doubt because its details are of little significance to this appeal. Suffice it to say that it proposed that women and young persons employed in the factory be divided into two groups, each working different hours, one of which group was to work from 3 p.m. to 11 p.m. As I understand the position, since this split and these hours required the Commissioner’s permission, the scheme was called a special scheme.

9. By letter dated 11th July 1991 the Commissioner granted the application, though subject to certain conditions, one of which was to keep registers required by regulation 16 separately for workers employed in each group of work as specified by the scheme, such registers to be available at all times for inspection. I note that the letter is addressed to the manager of the company.

10. There was another condition attached to the permission granted. It was that the scheme be not implemented until a Form LD334 had been completed and witnessed by an officer of the Labour Department, for which purpose the company was invited to contact a certain Senior Labour Inspector. Form LD334 is the notice which regulation 9(1) requires to be posted in a conspicuous place.

11. On 18th July 1991, Madam Lam went to the Labour Department where the form was completed. She signed it next to the words “Signature of Employer or Manager”. Again, there appears the company chop encircling the label "Personnel Department".

12. On 27th January 1992 a Labour Department Inspector went to the respondent factory. He introduced himself to Madam Lam. It is common ground that Madam Lam was neither a director, nor the secretary of the respondent company.

13. Evidence was adduced before the magistrate that Madam Lam was then asked to produce the regulation 16 register, and that she said that although she was the only person responsible for keeping such a register, none had been maintained.

14. The magistrate was satisfied that Madam Lam had been authorised by the respondent to make the application to operate the special scheme of work, and to sign Form LD334. Yet, he held that:

"The evidence did not establish that Madam Lam was the authorised agent of the Respondent to make an admission that the register was not maintained in accordance with Regulation 16".

And since that was, he said, not proved, the information had to be dismissed.

15. There is no question but that an agent can make admissions on behalf of his principal; that “the party seeking to rely upon the admission must prove that the agent was duly authorised"; and that “any evidence having probative effect and not excluded by a rule of law is admissible to prove that fact; circumstantial evidence is just admissible as direct evidence." (per Norton L.J. in R. v. Turner (1975) 61 Cr. App. R. 67, 82).

16. What proof will be required to show that an agent was thus duly authorised? In the case of corporations, there is no rule that an admission may bind the company only if made by a director, or by a senior officer. The nature of the proof necessary in such a case is in the same vein as when it is sought to bind a corporation contractually by the act of another. In other words, what must be shown is that the other has the corporation’s actual or apparent authority to make the admission. Actual authority is established by proof of the relationship between the parties and, by reference to the express or implied terms of the agency, the scope of authority. Apparent authority, on the other hand, may be established by proof of some representation by the principal as to the fact and scope of the agent’s authority.

“The representation which creates ‘apparent’ authority may take a variety of forms of which the commonest is representation by conduct, that is, by permitting the agent to act in some way in the conduct of the principal’s business with other persons.”

(per Diplock L.J. in Freeman v. Lockyer [1964] 2 WLR 618, 636.)

17. It is quite clear in this case that the respondent company permitted Madam Lam to act on its behalf in its dealings with the Labour Department insofar as concerned the application for this special scheme. It was she who applied on the respondent’s behalf for permission to operate the scheme. It is noteworthy that whilst the Department’s reply was addressed not to her in person but to the respondent, it was she who responded to the invitation in that reply to see a Labour Department officer. Beyond that, the respondent permitted her to sign the statutory notice, Form LD334, a notice which the respondent was required by law to complete and display. All this is quite sufficient from which to infer a representation by the respondent company that Madam Lam was authorised by it to conduct such dealings with the Labour Department on its behalf as were necessary to effect the new or special scheme, which related to the respondent’s employment of women and young persons, that she held a position of some authority in relation to that aspect of the respondent’s activities, and that she was authorised to maintain the documents relevant to the scheme and which were required by law. One of these documents was the register. It seems to me to be a small step from there to an inference that she was authorised to state on the respondent’s behalf whether that register was or was not maintained.

18. Illstrative of the correct approach to questions of this kind is Edwards v. Brookes (Milk) Ltd. [1963] l WLR 795. There, an information was preferred against a company which was in the business of selling milk, alleging that certain cartons of milk found at one of its milk depots did not contain the quantity of milk required by law. Objection was taken to evidence of conversations with the manager of the milk depot, and with a person who later called at the office of a weights and measures inspector and said that he was a representative of the company. The only evidence as to the latter's status or authority was that the inspector had on an earlier occasion delivered a schedule to the depot manager setting out the extent of the statutory default and that the second individual called at his office to discuss the position. It was submitted before the justices that there was no evidence that either was an agent of the defendant company authorised to make admissions on the company's behalf. As to that Lord Parker C.J., on an appeal by way of case stated, suggested that the question was whether there was evidence that the individuals were agents of the status who “prima facie would be entitled to make statements and admissions on behalf of the company” (page 798). That, he concluded, at page 799:

“... must depend on all the circumstances and the status of the person concerned. I am quite satisfied the depot manager in charge of the depot is of that status. In so far as the second interview is concerned, the representative who on this basis is the agent of the company, was coming along having had the schedule and the clear inference is that he was authorised by the company to discuss the matter.”

19. Edwards was referred to by Macdougall J.A. in R. v. Lolly Queen Company Limited (MA356/91), a case in which an interview had been conducted at company premises of one who described himself as a director of the appellant company, during which interview certain admissions were made. In response to a contention that the magistrate should not have concluded that that person was a director of the company, the learned judge had this to say:

“However, in my view there was amply evidence from which the magistrate was entitled to conclude that Mr Lam was authorised to make admissions on behalf of the appellant company.

The circumstances in which a person makes admissions are very relevant to the assessment of the question of whether he or she was an authorised agent of the company. Such circumstances can include the fact of an assertion as to status in the company, coupled with the physical circumstances of the conversation in which they were made, for example, the making of admissions by a person on company premises.”

The circumstances there particularised do not, of course, purport to be exhaustive of relevant circumstances. So, for example, in some cases the evidence will reveal a history of conduct by the company and by the supposed agent, including perhaps a course of dealing with the investigating authority, from which history or course of dealing authorisation to make admissions, either generally or in relation to the area of investigation, will readily be inferred.

20. In this case, the issue is not whether Madam Lam was authorised to make admissions generally on behalf of the respondent company. The issue is whether the evidence was sufficient from which to infer that she was authorised to make the admission she did, an admission which related to only part of the respondent’s operations, yet to the very area of those operations in respect of which she had on my view been entrusted with a representative role of some responsibility. I have rehearsed those features of Madam Lam’s role which suggest to me that there was sufficient from which to infer authority to make the admission she in fact made. If something in addition to those features is required, it is to be found in the fact that upon the inspector’s arrival at the factory, it was she to whom he spoke and with whom he dealt. It is not as if he stumbled across an ordinary employee with whom he happened then to engage in conversation. He clearly assumed at Madam Lam was authorised to speak on the company’s behalf. From the prior history of the matter, as well as from her presence and conduct at the factory when he was there, he was entitled to make that assumption. So too, in my judgment, should the magistrate have concluded, in the absence of any contrary evidence from the company, that Madam Lam was authorised to make the admission.

21. I would add only two matters. First, that a contrary conclusion would render the relevant statutory provisions difficult to enforce. Section 72 of the Employment Ordinance empowers the Commissioner for Labour to enter and inspect an industrial undertaking at any time, and without notice, and to require the production of any register required by the Ordinance to be kept there. An inspector ought to be entitled to rely on statements made by someone on the spot who is, and who has been held out to be, in a position of apparent authority in relation to the issue at hand. Who more obvious than the person on the premises who presents herself upon the inspection, the same person who, with the company’s permission, has been dealing with the Labour Department in connection with those personnel matters which are the very subject matter of the inspection?

22. The second matter I would add is that Madam Lam, so the case tells me, was authorised by the company to appear on its behalf at the hearing before the magistrate. That is a matter to which the magistrate was entitled to have regard and in itself is an indicator that she enjoyed, or that the company held her out to carry, a status which entitled her to make statements binding upon the company in that sphere of the company’s operations with which the information was concerned.

23. For the reasons I have given, I am satisfied that the magistrate ought to have held that Madam Lam was authorised to make an admission on behalf of the respondent that the register was not maintained. It follows that, in my opinion, the answer to each of the questions posed is "Yes".