CHAN YAT SAN v. FUTURE LUCKY (296) LTD

HCLA 18/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 18 OF 2012

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 1265 OF 2012)

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REASONS FOR JUDGMENT

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1. In April 2012, Mr Chan Yat San (“Claimant”) instituted proceedings in the Labour Tribunal against his employer, Future Lucky (296) Limited (“Defendant”) for arrears of wages, wages in lieu of notice, annual leave pay, long service payment and statutory holiday pay which the Claimant alleges are due and payable by the Defendant to him upon the termination of his employment contract. After witness statements were filed by the parties, a hearing “for mention” was set for 19 September 2012. The Defendant applied for and obtained an adjournment of the hearing, and a further mention hearing was fixed to take place on 8 October 2012.

2. The Defendant company was at all material times represented in the Tribunal proceedings by Mr Lau Tak Kin (“Lau”), the sole director and shareholder of the Defendant, who had signed and filed all the documents used by the Defendant in the proceedings.

3. On 3 October 2012, Lau was admitted to the intensive care unit of the Prince of Wales Hospital for neurosurgical treatment.  He was comatose and remained in intensive care on 8 October 2012.  For that reason, Mrs Lau wrote to the Tribunal on 4 October 2012 to request a postponement of the hearing scheduled for 8 October 2012.  As the hearing for mention had already been postponed from 19 September 2012, the Tribunal refused Mrs Lau’s application for a further adjournment, and required the Defendant to send another representative to attend the hearing on its behalf on 8 October 2012.

4. When the hearing commenced on 8 October 2012, the Defendant was unrepresented, as Lau was comatose.  The Tribunal officer contacted Mrs Lau, and having made inquiries with the Claimant who had indicated that one Mr Lee could represent the Defendant, the Tribunal officer requested that Mr Lee should appear at the hearing for the Defendant.  Mrs Lau informed the Tribunal that Mr Lee could not represent the Company as he was not an employee of the Company, and that as Lau was not able to attend, the Defendant could not send any other representative to the hearing.

5. The Presiding Officer decided to proceed with the hearing on 8 October 2012 in the absence of the Defendant.  Being satisfied that the facts relating to the claim had been sufficiently established, the Presiding Officer made an award against the Defendant, in exercise of her power under section 21 of the Labour Tribunal Ordinance (“Ordinance”), whereby the Defendant was ordered to pay a sum of $59,907.35 to the Claimant, with interest and costs (“Award”).

6. On 24 January 2013, I granted leave on the Defendant’s application to appeal against the Award.  The reasons for my decision were handed down on 31 January 2013.

7. After hearing submissions from the parties on 23 July 2013, I allowed the Defendant’s appeal, with costs.  The following are the reasons for my decision.

8. As I have indicated in my reasons for granting leave to appeal, the Tribunal has power, under the Ordinance, to hear and determine a claim in the absence of a defendant, “if the Tribunal is of the opinion that the facts relating to the claim are sufficiently established”.  It is also clear that under section 20 of the Ordinance, the role of the Presiding Officer is inquisitorial (Chan Suk Bing Angie v Harbour Phoenix Ltd [1992] 2 HKC 459), such that the Presiding Officer has to discharge a statutory duty to investigate all relevant matters.  However, as the late Deputy Judge Jerome Chan (as he then was) explained in Chan Suk Bing, there is a limit to that duty to investigate, which is not absolute:

“It is obvious that not every failure to investigate a relevant matter will give rise to an appeal for a failure to discharge a statutory duty. The relevant matter forming the subject matter of the complaint must not only be relevant but be of such a nature that the lack of investigation will give rise to injustice, in that, a fair and proper determination of the claim cannot be attained. All the circumstances of the case as well as all of the findings must be given all due regard before such a complaint could be upheld. … To suffice, it must be a clear and obvious case that the inadequacies of an investigation will render an ordinary reasonable man on the tram to Shaukiwan to conclude that injustice has resulted in that a fair and proper determination of the claim cannot be attained.”

9. The key issue for determination by the Tribunal is whether the Claimant was an employee of the Defendant, or an independent and self employed contractor providing services for the Defendant.  On this important issue, there are factual matters which are in dispute between the Claimant and the Defendant. 

10. The Defendant provided vehicles for hiring by its clients, and made oral contracts with drivers whereby the latter would accept orders from the Defendant to drive the Defendant’s vehicles and provide services to the Defendant’s clients.  The Claimant was one of such drivers. 

11. The Claimant alleges that under his contract with the Defendant, he had no control over the work given to him, which was decided by the Defendant, and that he could not undertake any work other than the Defendant’s work orders.  On the other hand, Lau on behalf of the Defendant claims in his witness statement that the Claimant had the right to accept or refuse any work order assigned to him.  Lau claims that the Claimant had refused work orders relating to particular clients of the Defendant, and work which related to half a day only. Lau also claims that the Claimant was  free to accept any other work assignment from or engagement by third parties, but in the event that the Claimant required use of the Defendant’s vehicle to carry out such work, then the Claimant had to first notify the Defendant and obtain its approval.

12. There is thus a disparity in the parties’ evidence as to whether the Claimant could and did refuse work orders given to him by the Defendant.  The Claimant filed statements in support of his assertions, and 5 drivers filed evidence on behalf of the Defendant, which support the Defendant’s case that the drivers had the freedom of choice whether to accept, or reject, work orders assigned to them by the Defendant.

13. 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.

14. Further, the inquisitorial role of the Presiding Officer under section 20 of the Ordinance involves the duty to investigate relevant matters.  Incidental to its performance of such a role and its duty to ensure a fair trial, in cases where there are disputes on facts and the credibility of the witnesses is essential to the Presiding Officer’s determination, the Presiding Officer has the duty to raise with a party matters that require its clarification or elaboration, on which the Presiding Officer has queries and which may be determined against the party.  This is in order to give the party an opportunity to deal with these matters and to call evidence on such matters.

15. In deciding on the relevant and important issue of the Defendant’s control over the Claimant’s work, the Presiding Officer had not given to the Defendant the opportunity to call its witnesses to give evidence on this key issue, to test the Claimant’s case by reference to the evidence of Lau and of the drivers who had given statements for the Defendant, and to cross-examine the Claimant on his assertions with regard to his choice of work given to him by the Defendant.

16. In her Reasons for the Award, the Presiding Officer stated that in choosing not to send a representative to attend the hearing on 8 October 2012, the Defendant had waived its right to present its evidence.  Although the Presiding Officer states in her Reasons for the Award that she had considered all the evidence, there was no reference to, or reasons given for rejecting the Defendant’s evidence relating to the Claimant’s freedom of choice of work, or her preference for the Claimant’s evidence over that of the drivers or Lau’s, other than to her acceptance of the Claimant’s explanation for not working on Saturdays, Sundays and public holidays. 

17. In resisting the Appeal, Counsel for the Claimant argued that the Award was not unsafe, and that the court can find that the Claimant’s evidence, that it had no control over the work assigned to him, is  “inherently more probable” than the evidence sought to be relied upon by the Defendant.  However, questions of the credibility of the witnesses, and of whether the Claimant’s assertions, or the assertions of Lau and the other drivers, are inherently more probable, can only be determined after hearing their viva voce evidence and cross-examination.

18. Counsel for the Claimant also argued that the Defendant’s right to cross-examine the Claimant had not been deprived, as this was a case of the Defendant being incapable of availing itself of such a right as it was not in a position to attend the hearing by its sole director.

19. On the facts, I am not satisfied that there is any material distinction.  The Defendant could not be represented by Lau, as he was comatose in hospital on the day of the hearing.  This was the effect of Mrs Lau’s explanation given on the day, and the reason for her seeking an adjournment on 4 October 2012.  The Defendant has since procured the appointment of Mrs Lau as a director in November 2012, and the Defendant can be duly represented in future hearings.  I do not consider that in the circumstances of this case, any culpable or wilful default can in all fairness be attributable to the Defendant.  Nor does the Defendant’s inability to attend the hearing by reason of Lau’s condition relieve the Presiding Officer of her duty to investigate a relevant matter and to ensure a fair and proper determination of the case.

20. It cannot be concluded that the decision of the Tribunal Officer would have been the same if she had given the opportunity to the Defendant either to call its witnesses to give evidence at a hearing attended by the Defendant’s representative, or to cross-examine the Claimant, or if the Tribunal Officer had called the Defendant’s witnesses to give evidence and tested the Claimant’s case against such evidence.

21. The investigations made by the Presiding Officer in the important aspect of the Defendant’s control over the Claimant’s work, one of the indicia set out in Poon Chau Nam v Yim Siu Cheung [2007] 10 HKCFAR 156 as being relevant to the determination of the existence or otherwise of an employment relationship between the parties, cannot be said to have been adequate.  Adopting the test applied in Chan Suk Bing Angie v Harbour Phoenix Limited [1992] 2 HKC 459, the ordinary reasonable man on the tram to Shaukiwan will conclude that injustice has resulted, in that a fair and proper determination of the claim was not attained.

22. For the above reasons, the Defendant’s appeal was allowed, with costs, and I ordered that the judgment below be set aside.  I further order that the case be remitted to the Tribunal for a retrial before another presiding officer.