LEE SO MAN v. SOUTH STAR GLASS LTD

DCCJ 3021/2022

[2026] HKDC 1474

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3021 OF 2022

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BETWEEN

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JUDGMENT

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1.  This is the trial of the action commenced by the Plaintiff (“P”) against the Defendant (“D”) for, in the main, (a) outstanding commission in the sums of HK$1,387,739.81 and RMB108,526.70 (or its equivalent value in Hong Kong dollars at the time of payment)[1] and (b) outstanding bonus in the sums of HK$972,373.99 and RMB63,515.91 (or its equivalent value in Hong Kong dollars at the time of payment).

2.  D denies P’s claims and counterclaims against P for a total sum of HK$440,011.13 overpaid in P’s claims for commission and bonus during her employment with D.

3.  The trial came before me on 3 February 2026 for 5 days[2]. P was represented by Ms Larissa Wong of Counsel (“Ms Wong”) and D represented by Mr Stony Chan of Counsel (“Mr Chan”).

4.  At trial, P[3] elected to testify whilst D called a total of 4 witnesses, Mr Patrick Wong (黃錫偉) (“Mr Wong”) [4], the founder and managing director of D, Ms Jenny Cheung (張孆之) (“Ms Cheung”)[5], a sales manager of D, Mr Wilson Lo (盧炳有) (“Mr Lo”)[6], a sales director of D and Ms Kicki Chung (鍾秋芳) (“Ms Chung”)[7], the managing director of P’s former employer (Infinity Finishes Ltd (“Infinity Finishes”)), to testify.

5.  Parties have helpfully filed their written closing submissions. After I have heard their oral closing on 10 February 2026, I reserved my judgment to be handed down on or before 10 August 2026.

6.  This I now do.

BACKGROUND

7.  The following is the undisputed and indisputable background of this case.

8.  In 2000, Mr Wong set up D and operated D in a one-man band, carrying on the business of glass trading.[8] D has never employed an accountant for its business.[9] All along, Mr Wong was responsible for D’s finance and compiling the “trading account” of D. [10]

9.  In 2013, Mr Wong invested in a glass processing factory with a PRC partner.[11]

10.  Prior to her employment with D, P was a senior sales manager of one of D’s customers, Infinity Finishes.[12]

11.  By a letter of appointment accepted by P on 14 March 2016[13] (the “Appointment Letter”), P was employed by D as senior sales manager with effect from 14 March 2016. The Appointment Letter provided, inter alia, the following: -

“Commencing Salary	HKD 40,000 per month plus commission and bonus
Commission Scheme	Based on 10% of gross profit of each individual sale.
	All commissions are paid when full payment is received.
Bonus Scheme	Based on sales value 1%, when annual sale target met and full payment received.
Sales Target	First year (1st April 2016 – 31st March 2017), HK$6,000,000.00
	Second year (1st April 2017 – 31st March 2018), HK$10,000,000.00
	Third year (1st April 2018 – 31st March 2019), HK$17,000,000.00
…
Termination	…
	3. Should the employee cease work prior to their applicable Notice period this unworked period will be deducted from the final paycheck, or in cases of a shortfall, by immediately reimbursable from the Employee to the [D] as per Hong Kong Law.
	…
	5. Upon the termination of this Letter of Employment for whatever reason, the Employee shall immediately deliver up to the Employer all books, documents, correspondence, notes, materials and other property including but not limiting to those containing information and materials of the Group of the Companies.
Terms of Employment	These Terms and Conditions of Employment may be amended from time to time by the Company at its sole discretion with prior notice.”

12.  By the end of March 2016, D, at the request of P, also employed P’s former colleague, 李肇昌 (ie Mr Vincent Li) to assist her.[14]

13.  During the course of employment,

(a)  P was responsible for inputting information of invoices issued into D’s computer, using Excel table for calculation;

(b)  the accounting staff of the PRC factory would ask P to provide them with the invoices issued by her so that the former could compile sales lists (銷售清單)[15] for the calculation of P’s commission and bonus;

(c)  the sales lists compiled would be emailed to P with copy to Mr Wong;

(d)  P and Mr Wong would confirm the amounts stated in the total sales lists (總銷售清單); and

(e)  P collected payments from D’s customers on the instruction of Mr Wong.

14.  On 13 September 2018, Ms Cheung joined D as sales manager.[16]

15.  P and D have further agreed the annual sale targets from 2019 to 2022[17] as follows: -

Year	Annual Sale Target
From 1 April 2019 to 31 March 2020	HK$25,000,000
From 1 April 2020 to 31 March 2021	HK$32,000,000
From 1 April 2021 to 31 March 2022	HK$40,000,000

16.  In 2020,

(a)  D installed the ERP (Enterprise Resource Planning) system[18]; and

(b)  D paid P full commission which P was entitled to from 2016 to 2018.[19]

17.  P has told Mr Wong that she was too busy to use the ERP system.

18.  On 16 and 27 August 2020, D emailed P, indicating D’s agreement to and confirmation of the calculation and mode of payment of the commissions.[20]

19.  On 14 December 2020, D paid P a sum of HK$327,284.28 for her bonus from 2016-2018.[21]

20.  In 2021, D paid P full commission which P was entitled to in 2019.[22]

21.  On 1 May 2021, D employed Mr Lo as its sales director.[23]

22.  In December 2021, D sacked Mr Vincent Li, one of the staff of P’s team.[24]

23.  In late January/February 2022, another staff of P’s team (Wong Wing Tung) resigned.[25]

24.  Between 27 January and 16 March 2022, a string of emails was exchanged between P and Mr Wong on commission payments to P for 2020 and 2021.[26]

25.  By letter dated 1 April 2022, P terminated her employment with D with effect from 1 April 2022, stating that D had stalled payment to her of bonus and commission for the years of 2020 and 2021.[27] Enclosed therewith a cheque drawn by P in favour of D for the sum of HK$42,000 as payment in lieu of notice.

26.  On 1 April 2022, Ernest Tang, Solicitors (“ET”), on the instruction of P, sent out a letter of demand to D, asking for (a) a breakdown of (i) the total amount of commission and bonus that P was entitled to; (ii) the amount of commission and bonus already paid to P; and (iii) the amount of commission and bonus to be paid to P, calculated up to and including 1 April 2022; and (b) settlement of the outstanding payments within 3 days after D’s written confirmation of the amounts.[28]

27.  After P left her employment with D,

(a)  Mr Lo has taken over P’s job tasks at D[29]; and

(b)  Mr Wong inputted P’s sales information/data into D’s ERP system and P did not know about it.

28.  On 7 April 2022, D emailed P, informing the latter (a) that the former had accepted that their employment relationship had ended on 31 March 2022 and (b) D’s position on P’s commission and bonus payments.[30] On the same day, Mr Wong supplied P with documents generated from D’s ERP system regarding P’s bonus and commission calculation.[31]

29.  By a chaser dated 22 April 2022, P, through ET, claimed, inter alia, that up to and including 1 April 2022, D owed her bonus[32] and commission[33] payments of at least HK$1,599,775.09 and RMB76,573.23.[34]

30.  On 13 June 2022, P commenced an action in the Labour Tribunal, claiming against D a total sum of HK$1,752,920.43[35] as follows: -

(a)  HK$60,351.12 annual leave payment;

(b)  HK$974,683.64 (ie HK$922,283.92 and RMB45,016.96) commission payment;

(c)  HK$714,222.67 (ie HK$677,491.17 and RMB 31,556.28) bonus payment: and

(d)  HK$3,663.00 reimbursement of mobile phone payment.

(the “LBTC Case”)

31.  By Consent Order of the Presiding Officer, Ms SIU Chi-wan, Jo dated 11 July 2022, D should pay P HK$60,351.12 in full and final settlement of P’s claim for annual leave payment and reimbursement of mobile phone payment.[36] On the same day, P’s claim for outstanding commission and bonus payments in the LBTC Case was ordered to be transferred to the District Court for trial.[37]

32.  P’s Bonus Summary 2016-2022[38] was prepared by Mr Lo’s assistant on 1 January 2023.

PARTIES’ RESPECTIVE CASES

33.  P’s case as pleaded in her Statement of Claim is simple and straightforward which is as follows: -

(a)  P relied on the provisions pertinent to the commission scheme and bonus scheme in the Appointment Letter (respectively the “Commission Provision” and the “Bonus Provision”) and claimed that under section 25 of the Employment Ordinance, Cap 57, D should, within 7 days from termination, pay all outstanding sum due to her.

(b)  On commission, P claimed: -

(i)  that, as of 1 April 2022, P was entitled to not less than HK$2,223,985.14[39] and RMB108,526.70 from 1 January 2020 to 31 March 2022;

(ii)  that D had already paid P commission in the sum of HK$840,000.00 for the year from 1 January 2020 to 31 December 2021[40]; and

(iii)  that accordingly, as of 1 April 2022, D owed P commission in the sums of HK$1,383,985.14 and RMB108,526.70.

(c)  On bonus, P claimed: -

(i)  that P met the sale target for the years of 2020/2021[41] and 2021/2022[42];

(ii)  that, as of 1 April 2022, P achieved sales of not less than HK$45,544,912.45 and RMB320,047.92 for the year from 1 April 2020 to 31 March 2021 and not less than HK$43,006,574.41 and RMB6,031,543.05 for the year from 1 April 2021 to 31 March 2022;

(iii)  that, as of 1 April 2022, P was entitled to bonus of not less than HK$885,514.86 and RMB63,515.91;

(iv)  that D still owed P bonus of not less than HK$86,859.13 for the year from 1 April 2018 to 31 March 2019; and

(v)  that, accordingly, as of 1 April 2022, D owed P bonus in the sums of HK$972,373.99 and RMB 63,515.91

34.  In P’s Reply and Defence to Counterclaim, P also pleaded the following: -

(a)  that chasing D’s customers for payment and collecting payment from D’s customers were not part of P’s job duties;

(b)  that according to the employment agreement, D should, after receipt of payment under “each individual sale”, pay P full commission in respect of that individual sale;

(c)  that from 2016 to 2019, D, with the aforesaid mode of payment as the foundation, paid commission to P;

(d)  that in the LBTC Case, D confirmed that P met the conditions for payment of bonus from 1 April 2021 to 31 March 2022; and

(e)  that in the email from Mr Wong to P on 14 December 2020, D agreed and confirmed that P had met the sale targets for her 1^st (1 April 2016 to 31 March 2017), 2^nd (1 April 2017 to 31 March 2018) and 3^rd (1 April 2018 to 31 March 2019) years of employment.

35.  In §51 of P’s supplemental witness statement, P has readjusted the figures claimed for her 2021 and 2022 commission[43], resulting in her claim for outstanding commission becoming HK$1,387,739.81 and RMB108,526.70 (or its equivalent value in Hong Kong dollars at the time of payment) and (b) outstanding bonus in the sums of HK$972,373.99 and RMB63,515.91 (or its equivalent value in Hong Kong dollars at the time of payment).

36.  In defending P’s claim, D’s pleaded case is as follows: -

(a)  On commission: -

(i)  The condition for payment of commission to P was full payment by the customer of the relevant sale received by D.

(ii)  The method of calculating commission was 10% gross profit from the full payment of the relevant sale received by D.

(iii)  Gross profit was calculated by deducting the cost of the relevant sale from the full payment received in respect of that relevant sale.

(iv)  P was entitled to receive commission in a total sum of HK$1,981,515.88[44] from the start to end of her employment with D.

(v)  D had paid P commission in a total sum of HK$2,245,569.53[45].

(vi)  Hence, D had overpaid P commission in the sum of HK$264,053.75.

(b)  On bonus: -

(i)  There were 2 conditions for the payment of bonus to P:

(aa)  P must meet the sale target of the relevant year (1 April to 31 March next year); and

(bb)  D must receive full payment of the sale targeted sum within the same relevant year.

(ii)  The amount of bonus paid would be 1% of the sales amount that relevant year.

(iii)  P only met the sale target (ie HK$10,000,000) of her 2^nd year of employment (ie 1 April 2017 to 31 March 2018).

(iv)  P was only entitled to bonus of HK$151,326.62[46] for her 2^nd year of employment.

(v)  D had paid P bonus in the sum of HK$327,284.00[47] on 14 December 2020.

(vi)  Hence, D had overpaid P bonus in the sum of HK$175,957.38.

(c)  After P left her employment on 31 March 2022, P was no longer an employee of D and had not represented D to chase for or collect payments from its customers. P therefore could not receive bonus and commission from the gross profit gained by D.

(d)  D therefore counterclaimed for a total sum of HK$440,011.13 (264,053.75 + 175,957.38) overpaid by D to P.

ISSUES

37.  As agreed by the parties, there are 2 main issues required to be resolved in this case.[48] They are as follows: -

(a)  (i)  Whether there is any outstanding commission owed from D to P; or

      (ii)  Whether there has been any overpayment of commission by D to P; and

(b)  (i)  Whether there is any outstanding bonus owed from D to P; or

      (ii)  Whether there has been any overpayment of bonus by D to P.

38.  The nub of the aforesaid 2 main issues is a twofold question of contractual interpretation: -

(a)  How should the Court interpret the Commission Provision and the Bonus Provision[49] (“Issue (1)”);

(b)  Whether the Commission Provision and the Bonus Provision survived termination of P’s employment agreement with D on 31 March 2022. If in the negative, P could no longer receive commission and bonus from D after 31 March 2022 (“Issue (2)”).

39.  After the aforesaid questions of contractual interpretation are answered, the Court needs to resolve the following factual questions: -

(a)  How much commission is P entitled to claim from D for the entire period of her employment, in particular the period from 1 January 2020 to 31 March 2022? (“Issue (3)”)

(b)  How much commission had D paid P for the entire period of her employment, in particular the period from 1 January 2020 to 31 December 2021? (“Issue (4)”)

(c)  Had P met the sale target for the years of 2020/2021[50] and/or 2021/2022[51]? (“Issue (5)”)

(d)  If P had met the sale target for both or either of the aforesaid years, how much bonus P was entitled to receive from D for the year(s) of 2020/2021 and/or 2021/2022? (“Issue (6)”)

(e)  If P had not met the sale target for both or either of the aforesaid years, had D overpaid bonus to P? and if in the affirmative, how much? (“Issue (7)”)

ASSESSMENT OF WITNESSES’ CREDIBILITY

40.  When assessing the credibility and reliability of the parties involved, the court should focus on the inherent probabilities of the parties’ respective cases, the internal consistency of their evidence and their demeanour when testifying at trial. This is aided by contemporaneous documents, circumstantial evidence tending to support one account rather than the other, and overall impression of the character/motivation of the witnesses.[52]

41.  Where there is a long passage of time between the events and the trial, the Court should place special importance to contemporaneous documentation. In Esquire (Electronics) Ltd v Hong Kong and Shanghai Banking Corp Ltd [2007] 3 HKLRD 439, Stock JA (as he then was) held at pp.480J-481B & 481D-I the following: -

“… Comparison with contemporaneous documentation is always an aid to reliability of oral testimony, unless there is reason to believe that the documentation is contrived or materially incomplete; but where the passage of time between events and trial is as long as it was in the present case, and where there is such a host of contemporaneous documentation, as there was in this case, the documentation must, I would have thought, assume a special importance. …

I would venture to suggest that the truth, in so far as one is able to reach it or, as is sometimes the case, to reach a version of it that is more likely to be correct than not, can best be tested by reference to contemporaneous documentation where it exists, or to its absence where one would expect it to have been created, as well as to inherent probabilities (though bearing in mind that there may be occasions where the truth may run against that particular grain) having regard to all the facts that are known. This is particularly so in a case such as the present, where events have taken place so long before trial and where there exists a mountain of contemporaneous documentation that can be used to point the way. This is not to say that the documentation should have been treated as if it stood on its own, not to be explained, contradicted or supported by oral testimony. It is however to say that in this case the approach adopted to assessment of the facts placed far too much emphasis on character impression and too little upon what was suggested by the documentation and by the inherent probabilities in their historical context. That documentation, as well as conflicts within the evidence, inherent probabilities, and a study of how matters were originally pleaded and asserted in witness statements – these are the factors which in a trial such as this, so long removed from the time of the events in question, were likely to be of particular use in assessing the facts; …” (Emphasis added)

42.  The evidence of Ms Chung, Ms Cheung and Mr Lo is of peripheral relevance.

43.  Ms Chung’s evidence is about the copy of unsigned supplemental agreement between P and Infinity Finishes[53] (the “Unsigned Supplemental Agreement”) supplied by Ms Chung to Mr Wong and D used the same to differentiate the legal position concerning payment of commission post termination of employment in Infinity Finishes from that in D. Ms Cheung, a sales manager of D, testified on her job duties and how her commission and bonus were calculated under her employment contract with D. Mr Lo’s evidence concerns his taking over P’s job tasks after P left her employment with D and his discovery that contrary to D’s established sales practice, P had issued a lot of invoices to D’s customers without delivery of goods prior to leaving D.

44.  As their evidence is of peripheral relevance, I do not think I need to make a finding of their credibility in this case. If need be, I shall find their evidence credible.

45.  There was no less evidence of marginal value canvassed by P and Mr Wong in their evidence.[54] I do not want to laden this judgment with such evidence. I may only need to come to my view as to their credibility in the course of my analysis and resolution of the Issues in this judgment.

46.  I now turn to my analysis of each of the Issues in this case.

ISSUE (1)

47.  The approach in construing an employment contract is no different from that in construing any other type of contract. As such, the proper approach to construing the contractual provisions in this case is to apply the conventional contractual interpretation principles.[55]

48.  In Eminent Investments (Asia Pacific) Ltd v DIO Corp (2020) 23 HKCFAR 487, the Hong Kong Court of Final Appeal enunciated the following principles of the interpretation of contract: -

“43.  It is a truism that the starting point is the ordinary and natural meaning of the words of the contract, and of course in the vast majority of cases that is the ending point also. But, as Ma CJ pointed out in Fully Profit (Asia) Ltd v Secretary for Justice,[56] in the more difficult cases it is not particularly helpful to refer to the “ordinary and natural meaning” of words because in such cases there can be much debate over exactly what is the ordinary or natural meaning of words; and in those cases the surer guide to interpretation is context.

44.  In Wood v Capita Insurance Services Ltd,[57] Lord Hodge JSC reviewed the many cases on interpretation and emphasised that interpretation was a unitary exercise. That is why, where there are conflicting interpretations, account should be taken of the natural and ordinary meaning of the provision in question, the purpose of the contract and of the provision, other relevant provisions, the facts and circumstances known or assumed by the parties at the time that the contract was executed, the quality of the drafting of the instrument, and commercial common sense.

45.  The following points emerge from the judgment of Lord Hodge JSC:

(a)  it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each;

(b)  the court must be alive to the possibility that one side may have agreed to something which with hindsight did not serve its interest, or that a provision may be a negotiated compromise or that the negotiators were not able to agree more precise terms;

(c)  some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals, whereas the correct interpretation of contracts which are marked by informality, brevity or the absence of skilled professional assistance may be achieved by a greater emphasis on the factual matrix;

(d)  but negotiators of complex formal contracts may often not achieve a logical and coherent text because of, for example, the conflicting aims of the parties, failures of communication, differing drafting practices, or deadlines which require the parties to compromise in order to reach agreement; and

(e)  commercial common sense and surrounding circumstances should not be used to undervalue the importance of the language of the provision which is to be construed, and the mere fact that a contractual arrangement, if interpreted according to its natural language, has worked out badly for one of the parties, is not a reason for departing from the natural language.”

49.  Evidence of pre-contractual negotiations may be looked at to show the surrounding circumstances and, by that means, to explain the commercial or business object of a contract. What is not permissible is to seek to rely on evidence of what was said during the course of pre-contractual negotiations for the purpose of drawing inferences about what the contract should be understood to mean, or as evidence for the interpretation of the terms of a contract. The Court should exercise considerable caution in the use of pre-contractual negotiations as evidence even as to the general object of the transaction.[58]

50.  Post-agreement conduct and statements of the parties are not generally relevant in construing the terms of an agreement made earlier.[59] There are however some exceptions to this rule, such as showing existence of the contract and what the terms of the contract were.[60]

The Contract Template

51.  There was a dispute as to what contract template had been supplied by P to Mr Wong for the latter to prepare the Appointment Letter. The reason why contract template was mentioned in evidence was that the contract template, as P argued, was P’s contract of employment with her previous employer and that it contained similar if not the same provisions as the Commission Provision and Bonus Provision. P’s previous employer (ie Infinity Finishes) still paid her commission after her employment contract with her previous employer was terminated. So, as P’s argument goes, she should be entitled to receive commission from D after her employment with D was terminated.

52.  It is quite clear that P has not discovered her employment contract with Infinity Finishes. Neither has she discovered the Unsigned Supplemental Agreement. This was so notwithstanding her admission in cross examination that she was in possession of a signed employment contract and supplemental agreement on “Commission and Bonus Scheme 2015 (Jan – Dec)” with Infinity Finishes (the “Supplemental Agreement”). Mr Wong said that P had only given him an employment contract template from a company called BW Limited (the “BW Contract Template”) for him to prepare the Appointment Letter. According to Ms Chung, BW Limited was another company set up and operated by her and her business partner, and BW Limited was different from Infinity Finishes.

53.  In cross examination, P insisted that she had given Mr Wong her employment contract and the Supplemental Agreement with Infinity Finishes. Mr Wong disputed that and elaborated on the same mistake made by him on the terms of “years of service” in annual leave[61] in drafting the Appointment Letter.

54.  P also explained why she had not discovered those documents: she said those documents did not have a direct connection with this case.

55.  All in all, I accept Mr Wong’s evidence on this issue. His version more tallies with the kind of documents discovered by the parties and the evidence of Ms Chung. On the contrary, P has never mentioned the Supplemental Agreement in her witness statement and supplemental witness statement. I reject her evidence on this aspect and do not accept her explanation. If she had thought that her employment contract with Infinity Finishes and the Supplemental Agreement had no direct connection with or bearing on this case, why did she mention the contract template in the first place? At any rate, the Unsigned Supplemental Agreement was discovered by D and it contained a provision entitling P to receive commission after termination of employment. P’s argument is akin to comparing apples with oranges and cannot on any view assist me in interpreting the Commission Provision and Bonus Provision. This is a red herring.

Factual Matrix

56.  In interpreting the Commission Provision and Bonus Provision in the Appointment Letter, I need to take into account the facts and circumstances known or assumed by the parties at the time when the Appointment Letter was entered into.

57.  It is plain that at the time of the Appointment Letter,

(a)  Mr Wong was operating D in a one-man band, carrying on the business of glass trading;

(b)  D has not employed an accountant for its business;

(c)  All along, Mr Wong was responsible for D’s finance;

(d)  P was to be employed by D as its first employee in the position of a senior sales manager;

(e)  Mr Wong received the BW Contract Template from P to work on for the drafting of the Appointment Letter; and

(f)  Mr Wong was the one who drafted the Commission Provision and Bonus Provision.

58.  No doubt, the purpose of employing P as D’s senior sales manager was to enhance the trading business and consequentially the profits of D.

59.  Mr Wong in his evidence emphasized that chasing D’s customers for payment and collecting payment from D’s customers were part of P’s job duties although he admitted that such duties were not expressly set out in the Appointment Letter. In cross examination, Mr Wong said that he expected P to have completed the entire sales-job task which included chasing customers for payment after credit period was over.

60.  However, P said in cross examination that she being employed by D as senior sales manager, her primary job task was sales, that when Mr Wong instructed her to collect payment from customers, in particular at the early stage of her employment with D, P and her assistant would do so as instructed and that she had all along during employment had chased customers for payment. But P denied that it was her duty to do so.

61.  I find that throughout her employment with D, it had become an established practice and her responsibility to chase customers for payment and collect payment from customers.

The Commission and Bonus Provisions

62.  The Appointment Letter is not a sophisticated document prepared with the assistance of skilled professionals. It was drafted by Mr Wong himself with the help of the BW Contract Template.

63.  It is a matter of agreement whether D was liable to pay P commission and bonus as of 1 April 2022, and if in the affirmative, how much.

64.  It is worth the while to set out the text of the Commission Provision and Bonus Provision here again.

“Commission Scheme	Based on 10% of gross profit of each individual sale.
	All commissions are paid when full payment is received.
Bonus Scheme	Based on sales value 1%, when annual sale target met and full payment received.
Sales Target	First year (1st April 2016 – 31st March 2017), HK$6,000,000.00
	Second year (1st April 2017 – 31st March 2018), HK$10,000,000.00
	Third year (1st April 2018 – 31st March 2019), HK$17,000,000.00”

The Commission Provision

65.  An employee’s commission is, putting it broadly, the employee’s specified share of what the employer receives through the employee’s efforts while at work. And the employee’s fortunes follow that of the employer inasmuch as the employee’s commission fluctuates along with what the employer so receives.[62]

66.  But commission involves what the employee might have earned, depending on whether the contractual requirements for entitlement to commission are satisfied.[63]

67.  The Commission Provision was positioned immediately before the Bonus Provision. The syntax of the two provisions was different. Unlike the Bonus Provision which clearly stated that “[b]ased on sales value 1%, when annual sale target met and full payment received”, the Commission Provision began with a sentence “Based on 10% of gross profit of each individual sale” followed by another sentence of “All commissions are paid when full payment is received”. In my view, the 2^nd sentence relates to when D is liable to pay P a commission on an individual sale, and the 1^st sentence relates to quantification of such commission if D is liable to pay P a commission on such individual sale. The commission arising from an individual sale is due and payable when full payment under such sale is received. This interpretation accords with the nature of commission payment to employees and the factual matrix of this case.

68.  Seen in that light, P has to establish that as of 1 April 2022, D had received full payment in respect of the sales she secured for the period from 1 January 2020 to 31 March 2022. If P can establish the aforesaid, the amount of commission she was entitled to would be 10% gross profit of such sales.

The Bonus Provision

69.  The position of the Bonus Provision is much plainer. D’s liability to pay P bonus arose when annual sale target was met and full payment to the tune of the sale target received. The quantification of the bonus to be received by P would be 1% of the sales value secured by P.

70.  D also pleaded and argued that P must receive full payment of the sale targeted sum within the same year as that in which such annual sale target was engaged. I agree with D’s submission[64] that it makes no commercial sense to track payment of each and every sale of the years in which sale targets were met, to subsequent years. My rhetorical question is: How long would D and P have to wait to see whether the sale target of a particular year had been met so that they could know in no uncertain terms whether P was entitled to receive bonus from D? More so, those who were entrusted to compile the financial statements of D must know clearly whether P was entitled to receive bonus from D in a particular financial year to which the relevant annual sale target applied. This interpretation matches well with each annual sale target period having been couched in a way to cover the financial year of that year.

71.  In my view, D was only liable to pay P bonus when the relevant annual sale target was met and full payment to the tune of the sale target or more received during the year to which the relevant annual sale target applied.

72.  Hence, P has to establish that as of 1 April 2022, she had met the sale target for the years of 2020/2021[65] and 2021/2022[66], and that D had received full payment to the tune of the relevant sale target or more within the same year to which the relevant sale target applied. If P can prove the foregoing, P would be entitled to 1% of such sales value.

ISSUE (2)

73.  The question as to whether the Commission Provision and the Bonus Provision would survive termination of P’s employment with D is not a question which falls for my decision in light of P’s pleaded case and my interpretation of the Commission Provision and Bonus Provision above.

74.  P’s pleaded case is that D had liability to pay commission and bonus (even for the sales in respect of which full payments have not been received) as of 1 April 2022. P’s plea as to the timing of D’s accrual of liability to pay P commission and bonus is unequivocally clear: the pleaded amounts of commission and bonus were due and payable by D to P as of 1 April 2022. The accrual of liability to pay P commission and bonus post termination has not been pleaded.

75.  The material questions are whether, insofar as commission payment is concerned, full payments had been received by D in respect of each individual sale on or before 31 March 2022 and whether, insofar as bonus payment is concerned, full payment to the tune of the sale target or more received by D during the year to which the relevant annual sale target applied. For bonus, such full payment must be made on or before 31 March 2021 or 31 March 2022 as the case may be.

76.  As I have said, it is not necessary for me to answer the question as to whether, as a matter of construction, the Commission Provision and the Bonus Provision would survive termination of P’s employment with D. If I am required to do so, I would find that those provisions could not survive termination of P’s employment relationship with D. The purpose of introducing those provisions in P’s employment contract with D was to reward D for her efforts while at work. It would fall foul the commercial purpose and presumed intention of the parties should those provisions survive termination of P’s employment contract.[67]

ISSUES (3) & (4)

77.  In §51 of P’s supplemental witness statement, P readjusted her claim for commission for the years of 2021 and 2022, resulting in her total claim, as of 1 April 2022, for commission in a sum of no less than HK$2,227,739.81 and no less than RMB108,526.70 from 1 January 2020 to 31 March 2022.[68]

78.  During cross examination,

(a)  P gave a detailed account on how her commission was calculated before the ERP system was set up;

(b)  P was referred to document at p 479 of the Agreed Trial Bundle (3) and agreed that throughout her employment with D, she had received a total amount of HK$2,245,569.63 of commission from 1 February 2017 to 4 February 2022;

(c)  P said the following: -

(i)  she would provide documents relevant to her sales to the PRC accountant of Mr Wong’s glass manufacturing factory in the PRC;

(ii)  the PRC accountant would compile sales lists (銷售清單) [69]containing all relevant data such as invoices, factory costs, sales contract, information of the sales and the amount of commission she was entitled to within that relevant year;

(iii)  the commission would only be subsequently released upon checking and confirmation of P herself and Mr Wong;

(iv)  she would input information regarding payments by customers into D’s computer; and

(v)  when she and Mr Wong received cheque payments by customers, they would inform the PRC accountant of the information regarding those cheques immediately;

(d)  As to how D calculated her commission, P said that her commission was calculated and paid on each individual sale by applying 10% to the difference between the invoiced amount and the cost of each individual sale.

79.  Mr Wong also confirmed in cross examination the practice of how sales lists (銷售清單) were produced and the receipt of the email from P[70] that contained her sales lists (銷售清單)[71]. Mr Wong thereafter confirmed the amount by email at that time[72]. However, Mr Wong further said in cross examination that the amount of commission released to P under the sales lists in 2020 was wrong because the sales lists did not take note of the amount of money actually received from customers nor were they cross checked with D’s bank statements.

80.  P relies on a table at p 971 of the Agreed Trial Bundle (4) (“P’s Commission Table”) together with its supporting grounding documents at pp 1,000-1,040 of the Agreed Trial Bundle (4) in support of her claim for commission.[73] Those are documents relied on by P in her supplemental witness statement.[74] In fact, supporting grounding documents at pp 1,000-1,040 of the Agreed Trial Bundle (4) are documents relied upon by D[75] with corrections and adjustments made by P. I accept P’s calculation of her commission for the years from 1 January 2020 to 31 March 2022 in P’s Commission Table.

81.  Since P has to establish that as of 1 April 2022, D had received full payment in respect of the sales she secured for the period from 1 January 2020 to 31 March 2022, the figures plucked from P’s Commission Table would be HK$1,762,283.92 (684,647.97 [year 2020] + 1,074,293.63 [year 2021] + 3,342.32 [year 2022]) and RMB45,016.95 (1,298.23 [year 2020] + 37,632.27 [year 2021] + 6,086.45 [year 2022]), being commission calculated by reference to the received gross profits for those years.

82.  I do not accept the table at p 479 of the Agreed Trial Bundle (3) relied on by D (“D’s Commission Table”) in its calculation of the overpayment of commission by it to P.[76] The reason is obvious: when D calculated the amount of commission which P was entitled to during the relevant period, it simply discounted the total costs incurred from the total invoiced sums received by D to arrive at the received gross profit for 10% to apply to. This is incorrect because the cost incurred for the invoiced sums not yet received by D was erroneously discounted from the total invoiced sums received by D.[77] This led to Mr Chan, in §117 of D’s Closing Submission, adding back the element of cost in respect of the outstanding invoiced sums to D’s calculation of additional commission which P was entitled to. The additional commission added back would be HK$700,005.39.

83.  Furthermore, by taking note of and giving credit to this additional commission added back, D has not overpaid commission to P. To the contrary, D still owes P commission of HK$435,951.64 (700,005.39 – 264,053.75). Accordingly, I dismiss D’s counterclaim for the return of its overpayment of commission.

84.  There is a dispute as to the total amount of commission received by P for 2020 to 2022. In answer to the Court’s question during oral closing on 10 February 2026, the parties wrote back to the Court jointly on 25 March 2026 (the “25/3/2026 Letter”), informing the Court of their difference. P said that she had received commission of HK$840,000.00 from D for 2020 to 2022 whereas D said that it had paid P a bigger sum of HK$1,096,106.80 as commission for 2020 to 2022. P has not adduced any supporting grounding documentation to support her case that she had only received a commission of HK$840,000.00 from D for 2020 to 2022. The only document which refers to the payment of commission was D’s Commission Table, but it only informs the Court of all the commission already paid by D to P for her entire period of employment with D. D’s Commission Table does not tell the Court the amount of commission paid is referable to which period of P’s employment. Doing the best I can, the amount suggested by P is slightly supported by D’s Commission Table in that the total amount of commission paid by D to P from 2 August 2021 to 4 February 2022 comes up to a total of HK$840,000.00. On balance, I accept P’s case that HK$840,000.00 should be deducted from P’s claim for commission.

85.  Accordingly, the outstanding commission recoverable by P from D would be HK$922,283.92 (1,762,283.92 – 840,000.00) and RMB45,016.95.

ISSUES (5), (6) & (7)

86.  On bonus, P claimed that she had met the sale target for the years of 2020/2021[78] (ie year 5 of P’s employment with D) and 2021/2022[79] (ie year 6 of P’s employment with D) and therefore, as of 1 April 2022, was entitled to bonus of not less than HK$885,514.86 and RMB63,515.91. She also claimed that D still owed her bonus of not less than HK$86,859.13 for the year from 1 April 2018 to 31 March 2019 (ie year 3 of P’s employment with D).

87.  Contrariwise, D said that it had overpaid P bonus in the sum of HK$175,957.38 in that:-

(a)  P only met the sale target (ie HK$10,000,000) of her 2^nd year of employment (ie 1 April 2017 to 31 March 2018);

(b)  P was only entitled to bonus of HK$151,326.62 for her 2^nd year of employment; and

(c)  D had paid P bonus in the sum of HK$327,284.00 on 14 December 2020[80].

88.  It is undisputed that on 14 December 2020, D paid P a sum of HK$327,284.28 for her bonus from 2016-2018.

89.  P relies on a table at pp 929-930 of the Agreed Trial Bundle (4) (“P’s Bonus Table”) together with its supporting grounding documents at pp 931-970 of the Agreed Trial Bundle (4) in support of her claim for bonus.[81]

90.  Forming part of the grounding documents relied on by P is a 1-page document entitled “Dora Bonus Summary 2016-2022” at p 948 of the Agreed Trial Bundle (4) (the “Bonus Summary (1)”). The Bonus Summary (1) is in fact a document generated from the ERP system by D, disclosed to P on 7 April 2022 and relied on by D[82]. According to the Bonus Summary (1), the following can be discerned: -

(a)  P only met the sale target for year 2 (ie 1 April 2017 – 31 March 2018) and year 6 (ie 1 April 2021 – 31 March 2022) since D received full payment of HK$13,582,852.80 for year 2 and HK$40,586,474.43 for year 6 which are in excess of their respective sale target.

(b)  P could not meet the sale target for year 5 (ie 1 April 2020 – 31 March 2021) as D only received full payment of HK$31,029,531.04 although the invoiced amount for year 5 exceeds the sale target for that year.[83]

(c)  D owed P outstanding bonus in the sum of HK$236,964,15.

91.  Subsequently, another 1-page document entitled again “Dora Bonus Summary 2016-2022” at p 561 of the Agreed Trial Bundle (4) (the “Bonus Summary (2)”) was generated by D from the ERP system, disclosed to P on 1 January 2023 and relied on by D. The Bonus Summary (2) has corrected the Bonus Summary (1) principally as follows: -

(a)  The invoiced amount for year 6 (ie 1 April 2021 – 31 March 2022) was significantly reduced from HK$41,292,181.17 to HK$26,356,191.91, but the payment received for the same year remained at HK$40,586,474.43.

(b)  P only met the sale target for year 2 (ie 1 April 2017 – 31 March 2018).

(c)  D has overpaid P bonus in the sum of HK$151,326.62.

92.  For year 6, D further elaborated the reason why the invoiced amount was reduced from HK$41,292,181.17 to HK$26,356,191.91.[84] Mr Wong said that HK$26,356,191.91was the sum arrived at after discounting the ineffective sales from HK$41,292,181.17.[85] The ineffective sales were subsequently identified in a table set out in §37 of Mr Wong’s supplemental witness statement[86], revised[87] and explained by Mr Chan in §§98-115 of D’s Closing Submission. The revised table referred to the 373 invoices mentioned by P in her document at pp 894-901 of the Agreed Trial Bundle (4) (ie Lee-27).

Reason for exclusion   from calculation	Relevant Invoice # at Lee-27
Full payment made to D after P’s resignation (“Category 1”)	002, 004, 007, 008, 010, 011, 018 - 023, 027, 035, 036, 038, 041, 042, 046, 047, 053, 055, 067, 068, 072, 077, 079, 084, 090, 091, 098, 100, 108, 110, 113, 114, 119, 121, 123, 124, 126, 128, 130, 133, 134, 139, 152, 153, 160, 167, 177, 187, 192, 197, 199, 204, 206, 209, 211, 236, 265, 295, 298, 313, 314, 332, 334-336, 344, 358, 363, 364, 373
Client cancelled the order (“Category 2”)	003, 005, 006, 016, 017, 025, 026, 028, 031, 033, 062, 073, 076, 106
D has not received payment (“Category 3”)	009, and all invoices with client “Hacely Façade Engineering Limited”
Others	034 (deposit)[88]; 044 (substituted)[89]

93.  P agreed in cross examination that after she left her employment with D, she normally would not know whether or when D’s customers paid the invoiced amount or whether D’s customers cancelled the orders placed. It seems to me that P has staged no challenge to P’s reasons for excluding the aforesaid invoices although there was a flimsy bare assertion by P as to her belief that the invoices mentioned in Category 2 had not been cancelled as she had asked D’s customers who told her that the work under those invoices had been completed.

94.   I directed parties to agree on the invoiced amount to be attributed to Category 1, Category 2 and Category 3 invoices mentioned in the revised table. By the 25/3/2026 Letter, the parties agreed the following: -

(a)  Total invoiced amount for Category 1: HK$6,637,959.09;

(b)  Total invoiced amount for Category 2: HK$3,769,308.67; and

(c)  Total invoiced amount for Category 3: HK$5,526,643.88.

Year 5

95.  Apart from P’s ipse dixit, the only documentary evidence relied on by P is P’s Bonus Table which stated that D had received a total of HK$43,822,109.46 for year 5 prior to P’s termination of her employment. P’s Bonus Table is a document created by P for the purpose of this litigation and there is no grounding documentation in support of the claimed amount of HK$43,822,109.46.  

96.  Conversely, the Bonus Summary (1) and Bonus Summary (2) both recorded that P could not meet the sale target for year 5 (ie 1 April 2020 – 31 March 2021) as D only received full payment of HK$31,029,531.04 for that year.

97.  I therefore find that P has failed to meet the sale target and is not entitled to claim any bonus for year 5.

Year 6

98.  It is quite obvious that on my interpretation of the Bonus Provision, Category 1, Category 2 and Category 3 invoices should not be counted towards calculating P’s bonus for year 6. The invoiced amount received by D was only HK$26,356,191.91 which is miles apart from the sale target for year 6.

99.  Hence, P has also failed to meet the sale target and is not entitled to claim any bonus for year 6.

Year 3

100.  In P’s Bonus Table, P has admitted that P has not reached the sale target. On P’s admission, P is not entitled to any bonus for year 3. This is so notwithstanding that P has received from D some so-called bonus payment for year 3.

101.  According to the Bonus Summary (1) and Bonus Summary (2), the total invoiced amount (ie HK$15,456.850.75) and the total full payment received (ie HK$13,723,026.18) did not reach the sale target for year 3.

102.  I therefore dismiss P’s claim for her outstanding bonus for year 3.

Whether there was any overpayment of bonus

103.  On 14 December 2020, D paid P a sum of HK$327,284.28 for her bonus from 2016-2018 (ie year 1 and year 2).

104.  P relies on the email sent by Mr Wong to P on 14 December 2020[90] together with one of its attachments[91] to substantiate P’s assertion that the sale target for year 1 and year 2 were met. The attachment is a table showing how the aforesaid sum of HK$327,284.28 was calculated by Mr Wong. The aforesaid sum relates to year 1, year 2 and part of year 3 (from April to December 2018) and calculated presumably from sales (ie invoiced amount). I don’t think this is a correct way of calculating P’s entitlement to bonus for year 1 and year 2.

105.  Furthermore, the Bonus Summary (1) and Bonus Summary (2) only show that P has met the sale target for year 2, not year 1.

106.  I place weight to the relevant parts of the Bonus Summary (1) and Bonus Summary (2) and find that P was only entitled to a bonus for year 2 which is HK$135,828.52 (13,582,852.80 [full payment of invoiced amount received] x 1%).

107.  D has overpaid P bonus in the sum of HK$191,455.76 (327,284.28 – 135,828.52).

108.  Hence, D succeeds in its counterclaim for the return of HK$191,455.76 overpaid by D to P.

DISPOSITION

109.  Accordingly, I make the following Order:-

(a)  Judgment be entered for P on her claim for the sum of HK$922,283.92 and RMB45,016.95[92] with interest at 1% above the HSBC best lending rate from 7 April 2022 to the date of judgment; and

(b)  Judgment be entered for D on its counterclaim for the sum of HK$191,455.76 with interest at 1% above the HSBC best lending rate from the date of service of the Defence and Counterclaim to the date of judgment.

110.  As to costs, I make the following order nisi: -

(a)  D do pay P 50% costs of the action on a party and party basis, such costs to be taxed if not agreed with certificate for counsel; and

(b)  P do pay D 50% costs of the counterclaim on a party and party basis, such costs to be taxed if not agreed with certificate for counsel.

111.  The costs order nisi shall be made absolute unless application for variation is made within 14 days from the date of this judgment.

112.  Lastly, I would like to thank Ms Wong and Mr Chan for their assistance.