TAM KA v. LAM HUNG KWONG AND OTHERS

CACV 75/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 75 OF 1999

(ON APPEAL FROM HCA 4389 OF 1996)

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J U D G M E N T

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Mortimer V-P:

1. This is a defendants' appeal against the order of Nguyen J on 4 February 1999 awarding the plaintiff $230,000 together with interest as a long service payment at the termination of his employment.

The background

2. The plaintiff was employed by the defendants for many years, from 15 March 1972 until 13 December 1995. The plaintiff was a cement worker. His final earnings were $660 per day. He claimed long service payment under the Employment Ordinance (Cap. 57).

3. There was a defendants' counterclaim below for overpaid wages but this was dismissed and there is no appeal.

4. The plaintiff's claim under the Ordinance turned upon one issue. This is accepted by both parties and was identified by the judge below. The issue is this: "Did the plaintiff resign from this employment, in which case no long service payment was due, or was he dismissed, in which case he was entitled on the judge's findings to his long service payment? There was no issue before us as to the amount.

5. The plaintiff was employed by the main decoration company. Originally that belonged to the 3rd defendant below. It was later handed over to the 2nd defendant, his wife, but was managed by the 1st defendant, his son. At the relevant time the plaintiff's duties were chiefly plastering and removing tiles. It appears that he was supervised and reported to the 1st defendant with whom he said he normally had a cordial relationship.

The evidence

6. The plaintiff's evidence below was summarised by the judge in these words:

"The 1st Defendant instructed him that in future he should charge time that he spent on purchasing materials to the account of Maxim's. He said that he refused. He explained to the 1st Defendant that he would not follow his instruction because he considered that he was employed by the Defendants and not Maxim's and it would be unreasonable to charge Maxim's. The 1st Defendant said three times 'Why not', so the Plaintiff took the cheque that he was given and left the office and resumed his duties. He did not resign. He went to the bank to cash the cheque. He said that to his mind what the 1st Defendant said amounted to cheating. He said that he then did two jobs on 11th December and one more job on 12th December and on 13th December, he was paged and informed to attend the office where he was given a letter by one of the secretaries. This is the letter which is at page 14 of the Agreed Bundle and which purported to say that the company had considered the resignation tendered by the Plaintiff on 11th December 1995 and accepted the resignation with effect from the day of the letter, 13th December 1995. Further on in his evidence, the Plaintiff clarified that what the 1st Defendant said on 11th December 1995 was that he said that if the Plaintiff bought materials for Maxim's, then the Plaintiff should charge Maxim's account"

That was the judge's summary of events which led to the plaintiff leaving the defendants' employment. He then summarised the defendants' evidence:

"The 1st Defendant gave evidence that on 11th December 1995, he asked the Plaintiff 'Where is the material you purchased on 1st December', he said that he told the Plaintiff that if the material he purchased was used in connection with a project at Maxim's, he should write it down, similarly Sun Tong Lok. The 1st Defendant said that the Plaintiff then said that the 1st Defendant was prejudiced against him, and he [the Plaintiff] had no explanation. D1 said he was persistent and asked the Plaintiff again. The Plaintiff replied in a loud voice 'Now I resign. You make calculation and give me my wages.' D1 said he should complete his work first and he [D1] then accepted the Plaintiff's resignation."

Having identified the evidence of the plaintiff and the 3rd defendant upon the issue whether the plaintiff resigned or was dismissed, the judge then set out the evidence of the two defence witnesses. Both gave evidence that they heard the exchange on 11 December between the plaintiff and the 3rd defendant; both testified that the plaintiff said that he would resign.

The finding below

7. The judge's finding on this issue is set out quite shortly. I repeat it because this is the focus of the appeal:

"The two witnesses called on behalf of the Defendants gave no evidence of hearing the 1st Defendant allegedly accepting the Plaintiff's resignation or the 1st Defendant requesting the Plaintiff to finish the jobs that he had already been assigned before leaving the employment of the Defendants. If the Plaintiff in fact tendered his resignation, why would the 1st Defendant bother to ask him to stay on until he finished off the work already assigned to him? The jobs which had been assigned to the Plaintiff could easily have been assigned or reassigned to another cement worker and the Defendant company had two of those in their employ at the time. If there was a resignation tendered on 11th December 1995, which was readily accepted by the 1st Defendant, why did the 1st Defendant, when he wrote to the Plaintiff on 13th December 1995, write in these terms :

'As you have not reported to our company the accurate number of days of work in accordance with the fact, the wages payable for the number of working days have been exaggerated. Our company has given repeated warnings but you have not been able to give a reasonable explanation. There is suspicion of deceiving our company. Moreover you have failed to observe the rules of the company to start working at 9:00 a.m. and finish working at 6:00 p.m. resulting in a loss suffered by the company. On 11th December 1995, our company inquired of you again. Instead of giving a reasonable explanation, you tendered your resignation. After our company has considered it, we accept your resignation with effect from today.'

Furthermore, on 12th December, the Plaintiff did some work for the Defendants at Maxim's Palace Restaurant and on 11th and 12th December, he also did work at the Maxim's Shanghai Garden Restaurant, also for the Defendants. In my view, if the Plaintiff did offer to resign on 11th, it is most unlikely that he would have done two more days of work for the Defendants. I therefore find it more probable than not that the Plaintiff did not tender his resignation on 11th December 1995."

Any grounds to dismiss?

8. The judge then went on to consider the question whether there was any grounds for the defendants to dismiss the plaintiff:

"According to the 1st Defendant, on that day, he asked the Plaintiff where was the material that the Plaintiff purchased on 1st December. The Plaintiff's reply was that he had no explanation. When the 1st Defendant persisted and asked the Plaintiff again, according to the 1st Defendant, the Plaintiff replied in a loud voice 'Now I resign'. This act of refusing to explain to the 1st Defendant where the material was that he had purchased on 1st December was, at the very worse, one single act of disobedience which did not justify the Defendants' two days later summarily dismissing the Plaintiff. The act on the part of the Plaintiff was not an act showing a wilful disregard of the essentials of the contract of service which amounted to a repudiation of the contract by the Plaintiff - Laws v. London Chronicle (Indicator Newspapers) Ltd. [1959] 1 WLR 698."

In that passage the judge was considering the dismissal on the evidence of the defendants.

The defendant's case on appeal

9. Sir John Swaine SC, Mr Alexander Wong with him, submits for the defendants that the judge's reasoning was flawed to the extent that the appeal ought to be allowed. The submission is, if I can encapsulate it, that this is one of those unusual cases in which the judge did not take advantage of seeing and hearing the witnesses and did not make any sound finding in favour of the plaintiff on the evidence so that this Court can review his findings of fact.

10. The initial point is this. The judge never addressed the question - which was the real issue in the case - whether the plaintiff used the words alleged by the defendants on 11 December "Now I resign". It could be said, however, that when the judge was assessing the issue whether the plaintiff resigned on 11 December 1995 or was dismissed by the defendants on 13 December 1995, the words used were an essential part of the issue. If those words were not used, there could not have been any question of the plaintiff resigning.

11. The reason why this matter is raised on appeal is that - according to Sir John - there was some blurring of this issue because of the way in which the plaintiff's case was conducted. In particular because the plaintiff, through Mr Nelson Miu who appears here as well, took a number of points based on the case that the plaintiff did utter some words like "I'll resign". The question he raised was whether or not in the particular circumstances the words amounted to a resignation when contrasted with the further conduct of the parties and the letter to which the judge referred. But the plaintiff's case goes further, because, Sir John submits, it was necessary for the judge to find whether or not the words were spoken and to make an assessment of the witnesses' credibility. He submits that without the assessment as to credibility, the decision by the judge on this matter is flawed. He submits that the judge's assessment of the witnesses, which he dealt with in some detail, was at most superficial and does not justify him in reaching his conclusion on the balance of probability. Finally, he takes this point - Mr Miu, when presenting the plaintiff's case, did not cross examine either the 1st defendant or the two witnesses specifically upon the issue whether or not the words were spoken. So, he submits in conclusion that there was corroborative evidence of the 1st defendants' evidence that the words "Now I resign" were spoken and that corroborative evidence of the two witnesses was unchallenged. It was not open therefore to the judge to find that the words were not spoken. This is a challenge to the judge's finding of facts as well as a submission that the judge failed to make a finding on essential facts.

The approach of this Court

12. The approach of an appellate court to a challenge of this nature is usefully set out in Watt v Thomas [1947]1 AER 582, in the speech of Lord Thankerton when he cites a passage in Clarke v Edinburgh & District Tramways Co (1919 SC (HL)37) which was quoted with approval by Lord Sankey LC in Powell v Streatham Manor Nursing Home [1935] AC 250 where Lord Shaw said:

"In my opinion, the duty of an appellant court in those circumstances is for each judge to put it to himself, as I now do in this case, the question, Am I - who sit here without those advantages, sometimes broad and sometimes subtle, which are the privilege of the judge who heard and tried the case - in a position, not having those privileges, to come to a clear conclusion that the judge who had them was plainly wrong? If I cannot be satisfied in my own mind that the judge with those privileges was plainly wrong, then it appears to me to be my duty to defer to his judgment."

I find those words very helpful. They encapsulate the advantage that a judge has in seeing and hearing the evidence below. If there is a challenge to his finding of fact, then it is necessary for the plaintiff to demonstrate that the judge has not allowed himself those advantages. That is normally demonstrated by either showing plainly that the judge was wrong in his finding or that his finding is not supported by any evidence.

The judge's finding

13. In this case, it cannot be said with success that the judge failed to consider the evidence which was before him. Indeed, in his judgment there are passages which show that he considered the plaintiff's evidence on the question of resignation, the defendants' evidence and the two supporting witnesses together with the letter written to the plaintiff on 13 December 1995. All those matters were considered before the judge reached his conclusion which was - and I repeat the words - "I therefore find it more probable than not that the defendant did not tender his resignation on 11 December 1995".

Is the finding shown to be wrong?

14. The question then arises as to whether it is demonstrated that the judge was plainly wrong. One can readily appreciate that the defendants must have considered themselves evidentially in a strong position. The 2nd defendant was able to speak of the words used by the plaintiff. The defendants were able to call the two supporting witnesses. Although it could be said that one of those witnesses was not only employed by the defendant company but was also a relative of one of them. The other witness was no longer employed and therefore could be regarded as independent. Further, the defendants considered that their case on resignation was supported by the letter written on 13 December 1995 although that was not the judge's assessment of it.

15. The defendants, therefore, as I have said, would have considered themselves in a strong position. But that was by no means the only evidence. It is quite clear that the plaintiff from the outset denied that he ever used the words "Now I resign" and that there was no question of him resigning. So it was open to the judge, as it was his duty to make an assessment of that issue. That he did. It is nothing to the point even if the appellate court thinks, looking at the evidence on paper, it might have found the issue the other way. There was evidence upon which the judge could make the finding and he did make the finding.

16. The question then arises: did he make a finding that the plaintiff did not use those words? As I read the whole of this passage in the judgment, it seems to me clear that when the judge said that he found it more probable than not that the plaintiff did not tender his resignation on 11 December 1995, he made that finding, in spite of the alternate submissions from Mr Miu. Indeed, the fact that he had heard those alternate submissions makes it clear to my mind that he found that the words were not used. If he did not make a finding that the words were not used, he would have had to determine the effect of the words.

17. On his finding whether any dismissal was justified, the judge considered the case on the basis of the defendants' evidence. He determined the issue against the defendants on the defendants' evidence alone. That is not a finding which can be challenged.

Credibility

18. That leaves the question whether it was necessary for the judge to make a determination on credibility. On this, for my part, I am quite clear that it is necessary for the judge to make findings of fact. He must give reasons for those findings but those reasons do not necessarily mean that he must make a specific finding on credibility. By that I mean to the extent that one witness is lying and the other witness is truthful and so on. What he must do is to make a reasoned finding on the balance of probabilities as to what the facts are. As I see it that is what the judge did.

Assessment of the witnesses

19. As to the assessment of the witnesses, that is a matter for the judge. It is almost impossible for an appellant to challenge the decision of a judge on the basis that he gave too much or too little weight to various matters in his assessment of a witness. It is said here that the matters the judge relied upon were neutral and should not have influenced his judgment. I am not able to accede to that submission especially when the judge is the only person who sees and hears the witnesses and must make this assessment.

Cross-examination

20. The remaining matter is the point on cross-examination. It is conceded by Mr Miu that although he cross-examined the 1st defendant on a number of points concerning the incident on 11 December, the focus of his questions was whether there was any acceptance of a resignation that might have been tendered. Similarly, with the two supporting witnesses, the issue whether the words were spoken was not specifically challenged, although I suppose it is fairer to say, was not challenged by any direct question. As I have already indicated, Sir John Swaine submits that the absence of cross-examination by counsel means that the evidence is unchallenged and, therefore, had to be accepted by the judge. Put at its lowest, the counsel for the plaintiff was soft pedalling the point. In support of the submission, he cites the passages of Lord Herschell LJ in Browne v Dunn [1894] 6R HL 67 at 70:

"Now, my Lords, I cannot help saying that it seems to me to be absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness is not speaking the truth on a particular point, to direct his attention to the fact by some questions put in cross-examination showing that that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged, and then, when it is impossible for him to explain, as perhaps he might have been able to do if such questions had been put to him, the circumstances which it is suggested indicate that the story he tells ought not to be believed, to argue that he is a witness unworthy of credit. My Lords, I have always understood that if you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and, as it seems to me, that is not only a rule of professional practice in the conduct of a case, but is essential to fair play and fair dealing with witnesses."

There are similar passages in the speech of Lord Halsbury.

21. Those passages, it is to be noted, are passages dealing with the situation where in the absence of cross-examination in the court below, the witness is impeached on appeal. For my part, I must express doubt on the general application of those words - without derogating from the usual principle that counsel must put his case. I say that for these reasons. It is clear to me, having looked at the parts of the transcript which are before us and heard the submissions of counsel, that there was never any doubt on the plaintiff's evidence and the defendants' evidence that those words about resignation were in issue. It was the central issue in the case identified early in the judgment. The judge cannot have been in any doubt from beginning to end that that was an issue. To suggest that the evidence is unchallenged and therefore must be accepted in the absence of counsel saying "I suggest to you that you did not say those words" to receive the answer "Well I did", is taking the matter too far.

22. Having said that, it could be said - as Mr Miu would be prepared to accept - he perhaps did not go to the heart of the matter in his cross-examination as he might have done. For my part, I am not prepared to accept that this demonstrates that the issue, which was plain on the evidence, was not one which counsel and the plaintiff were not pursuing.

In those circumstances and for those reasons, I would hold that this appeal fails. The judge's finding on the issue should stand.

Mayo JA:

I agree and there is nothing further I can usefully add.

Leong JA:

I agree.