XCHRX MONES, CELESTINA SALDIVAR v. LUI SIU HUNG

HCLA 81 of 1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. HCLA 81 OF 1999

(On appeal from Labour Tribunal Claim No. LBTC6800 of 1999)

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J U D G M E N T

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1. The nature of her claim and grounds of appeal are sufficiently set out in the affidavit sworn by the applicant on 27th October 1999 for the purpose of this application for leave:-

"3. On 6 August 1999 I filed a Labour Tribunal Claim against my former employer, Madam LUI Siu-hung ("the Defendant"). ..... The items of claim set out on Labour Tribunal Form 3 included as item (g) thereof a claim for damages at common law for loss of wages and accommodation expenses.

4. I had been advised to include this item of claim because mine was a case of constructive dismissal arising out of a physical assault on me committed by my employer's sister, one LUI Lai Chun, Jinnefer, on 19 May 1999 and that under Hong Kong law the compensation recoverable in such cases was not governed by section 8A of the Employment Ordinance (Cap. 57), but fell to be assessed in accordance with common law principles which, as developed in a number of recent Hong Kong cases which were specifically concerned with the special circumstances affecting foreign domestic helpers, might permit such damages to exceed the amount which the employee would have earned if he or she had been dismissed upon proper notice.

5. The assault referred to in the last paragraph hereof consisted in the said LUI Lai Chun, Jinnefer, slapping me on my right and left cheeks in a public street and was committed in the course of my carrying out the duties of my employment, namely accompanying the Defendant's mother to and from a visit to the Pamela Youde Nethersole Hospital in Chai Wan. Because of the assault I declined to continue in my employment with the Defendant. She was away from Hong Kong on a visit to Canada at the time the assault occurred but I informed her of my decision by letter and later confirmed my decision at a face-to-face meeting. .....

8. As to items (a) to (f) of my Claim, I acknowledge and accept that I consented to a compromise settlement of those items in the sum of $3,860.00. But I only agreed to withdraw item (g) because the learned Presiding Officer indicated to me that it fell outside the jurisdiction of the Labour Tribunal. I do not know how he arrived at that conclusion and, in any case, it is unlikely that I would have been able to full appreciate such reasons as he might have given because, clearly, I am not a lawyer and did not have access to independent legal advice at the hearing. However, the brief reason cited above, namely that the claim in question was outside the Tribunal's jurisdiction, is confirmed by the learned Presiding Officer's Notes of Proceedings, ....

9. What I did understand the learned Presiding Officer to tell me was that the appropriate course for me to take was instead to pursue a claim against my employer's sister, the aforesaid LUI Lai Chun, Jinnefer, in the District Court, presumably (as I have since been advised) for the tort of trespass to the person in respect of the battery which she had committed on my person. He did not give me any indication that item (g) of my Claim might, however, be within the jurisdiction of the District Court or suggest that an appropriate course for him might be to exercise his statutory power to decline jurisdiction and transfer that part of my claim to that Court pursuant to section 10 of the Labour Tribunal Ordinance, Cap. 25.

10. I felt that, as a non lawyer without immediate access to independent legal advice, I had no alternative but to accept what the learned Presiding Officer was indicating to me. In reliance on that advice, which amounted in effect to a judicial ruling on the justiciability of item (g) of my Claim, I therefore agreed to withdraw that item.

11. Following the Labour Tribunal hearing of 3 September 1999 I was advised that the learned Presiding Officer's view of the non-justiciability of item (g) of my Claim was, or might well be, erroneous in point of law and that therefore I might have arguable grounds for challenging the validity of that part of the Order of the Tribunal which related to withdrawal of that item of Claim."

2. In gist, the applicant complains that (1) the learned presiding officer made an order barring her from claiming common law damages, (2) she was steam-rollered into withdrawing her claim for item (g) without adequate opportunity to seek independent legal advice, (3) the learned presiding officer is wrong in law to hold the view that the Labour Tribunal has no jurisdiction to hear claims for common law damages, and (4) the learned presiding officer is wrong in law as to what constitutes constructive dismissal.

3. So far as (1) is concerned, this is not a legitimate complaint. The applicant withdrew her claim. The Tribunal did not dismiss her claim after trial. She can always file a fresh claim at the proper forum. But before she does so, I suggest she wait until the final outcome of her appeal on (3) and (4).

4. As to (2), every fresh claim filed with the Labour Tribunal is first investigated by a tribunal officer. The file record shows that the applicant was advised by the tribunal officer who investigated her claim before it went before the learned presiding officer. The tribunal officer told her that the Tribunal has no jurisdiction to award common law damages. On 25 August 1999, the tribunal officer reported in writing to the learned Presiding Officer of having given such advice to the applicant. Then on 3rd September 1999, the learned presiding officer again explained in open court the law to her. In view of the time lapse between the tribunal officer's advice and the hearing before the learned presiding officer, it does not lie in applicant's mouth to say that she had had no opportunity to seek independent legal advice.

5. In any event, at the hearing on 3rd September 1999, the duty of the learned presiding officer was to adjudicate on the claim. Had the applicant not accepted advice to withdraw this item of her claim, the Tribunal was bound to dismiss it forthwith on the basis of the law as the learned presiding officer understood it. Assuming that this item of the claim is outside the jurisdiction of the Tribunal, there being no jurisdiction to decline for transfer to the District Court or Court of First Instance, the applicant was properly advised to start a new action elsewhere.

6. The problem raised in (3) is by no means straightforward. The learned presiding officer relied on the case of National Ebauch Ltd v. Rishi Kaumar Bhatnagar [1981] HKLR 114. The applicant refers to a number of authorities. The state of the law can be summarized below:-

National Ebauch Ltd. v. Rishi Kaumar Bhatnagar [1981] HKLR 114

" Section 7 of the Labour Tribunal Ordinance (Cap. 25) confers exclusive jurisdiction on the Labour Tribunal in relation to those claims which are specified in the Schedule to the Ordinance. Paragraph 1 of that Schedule confers jurisdiction on the Tribunal in relation to a "claim for a sum of money", which arises from the breach of a term, whether expressed or implied, in the contract of employment.

Is a claim for liquidated damages "a sum of money" within the meaning of that Schedule? Paragraph 1 of the Explanatory Memorandum, which was annexed to the Labour Tribunal Bill on its publication states

"This Bill establishes a tribunal, to be known as the Labour Tribunal, the jurisdiction of which is at present restricted to claims in respect of liquidated sums arising out of a breach of contract of employment, though there is provision for its jurisdiction to be changed by resolution of the Legislative Council."

Paragraph 3 contains a passage, which is to the same effect

"Part III deals with the jurisdiction of the tribunal. Clause 7 confers on the tribunal the jurisdiction set out in the Schedule. This is limited to claims for money arising out of a breach of contract of employment or statutory duty."

It seems to me that the ordinary meaning of the phrase "a sum of money" is that it is an ascertained sum. This view, so far as the Labour Tribunal Ordinance is concerned, is reinforced by the passages to which I have referred in the Explanatory Memorandum, which indicate that the intention of the Legislature was to exclude claims for unliquidated damages. This seems to me to be in accordance with the general intention of the Ordinance, which was to provide a simple informal forum without lawyers to deal with relatively simple claims which can be easily quantified.

I have, therefore, come to the conclusion that a claim for a sum of money arising from a breach of contract, does not include a claim for unliquidated damages. I thus agree with the ruling of Mr. Eric Li, the Presiding Officer in Labour Tribunal Claim No. 2352 of 1979 to the same effect.

In the result, therefore, I find that this court has jurisdiction to try the action." per Roberts CJ at 115

Panalpina (Hong Kong) Ltd. v. Ulrich Haldemann [1983] HKLR 275

" The defendant relied principally on the decision of Roberts, C.J. in National Ebauch Ltd. v. Rishi Kaumar Bhatnagar [1981] HKLR 114, to the effect that the tribunal's jurisdiction was limited to claims for liquidated damages and that the High Court had jurisdiction to hear claims for unliquidated damages. The operative words in the schedule are:-

"1. A claim for a sum of money which arises from
(a) the breach of a term, whether express or implied, of a contract of employment....

3. Notwithstanding paragraphs 1 and 2, the tribunal shall not have jurisdiction to hear and determine a claim for a sum of money, or otherwise in respect of a cause of action founded in tort whether arising from a breach of contract or a breach of duty imposed by a rule of common law or by an enactment."

Liquidated damages arise "where the parties to a contract, as part of the agreement between them, fix the amount which is to be paid by way of damages in the event of breach, ... as a genuine pre-estimate", per McGregor on Damages 14th edition paragraph 341. It is wholly exceptional to find such a provision in a service agreement. It is equally wholly exceptional to obtain specific performance of a service agreement. It follows that practically every case involving a breach of a service agreement gives rise to a claim for unliquidated damages, see Yip Wan-chiu v. Magnificent Industrial Ltd. [1974] HKLR 183. Section 8A of the Employment Ordinance (Cap. 57) may have added in Hong Kong a special category of statutory liquidated damages in certain circumstances. But this is only since 1975 and it cannot affect the construction of a 1970 ordinance.

But to say that damages are unliquidated is not to say that they are general in the pleading sense, or at large. With very few exceptions, e.g. loss of reputation, any more recently loss of a holiday, damages for breach of contract are not general but special, and have to be precisely particularised and quantified. Contracts of service are no exception to this. The claim here was thus properly particularised and quantified. In an attempt to defeat this application and to bring himself specifically within the National Ebauch decision the defendant applied for leave to amend the counterclaim (inter alia) by deleting the particulars. But when I pointed out that these particulars were essential to the claim, whether it was pursued in this court or before the Labour Tribunal, the application for leave to amend was abandoned.

In my judgment the phrase "sum of money" must be construed in the light of the fact that practically every claim for "breach of a term ... of a contract" will be for damages unliquidated in law but quantified in practice. It follows. I think that the phrase must cover such claims. I agree with Roberts, C.J. that the legislature anticipated a "quantified" claim and a claim that was "ascertained" or ascertainable. But I regret that I cannot agree that this makes the claim one for liquidated damages, or that it limits the tribunal's jurisdiction to such claims. This conclusion seems to me to be supported by paragraph 3. No claim "founded in tort" can be for liquidated damages. It may contain a calculated or special damages element; but the bulk is likely to be for general damages. I am much comforted to know that the same conclusion was reached by O'Connor. J. on 18th December 1979 in Stewart and Others v. The Hong Kong Philharmonic Society Limited H.C. Civil Action No. 3031/79. Unfortunately as this decision was not reported, it was not cited to Roberts, C.J.

A further complicating feature arose in National Ebauch because the claim there could be put both in contract and in tort. This raised the further problem as to whether the claim was "founded" in tort: How that concept was to be tested when both claims were equally open: And whether divided jurisdiction was inevitable with the tribunal being compelled to hear one part and the High Court the other. Such futile barren arguments would also be avoided by the granting of discretion to the High Court." per Hunter J (as he then was) at pp.277-278

Ying Cheong Shoe Mfy v. Yam Yuk Bin and another [1987] 2 HKC 310

"Instead of being liable to pay liquidated damages under s 8A(1), the employer is instead liable to pay unliquidated damages according to ordinary common law principles for breach of contract. Thus, instead of ordering the employer to pay wages in lieu of notice, the learned presiding officer should have assessed common law damages for the employer to pay." per Rhind J at 319.

De Nicolas, Nenita Cientos v. Lee Fund Lan, Labour Tribunal Appeal No. 15 of 1997

" Because this contract was entered into by the employer mala fides form its inception I am of the view that the "normal" range of damages does not apply but that damages should be assessed in such a way that they put the D.H. in the position she would have been if the contract had been performed.

Those damages would include inter alia payment on a quantum meruit basis for services actually performed i.e. the domestic duties and the restaurant duties. They could include employment agency fees incurred in the Philippines and/or Hong Kong in relation to this particular contract and expenses incidental to the contract - subject to the usual proofs.

Further, a claim for contractual wages during some or all of the time that the D.H. was obliged to remain in H.K. to pursue the claim against the employer and was unable to work, would not be unreasonable; although such would be reduced by the period of any delay attributable to the inactivity of the D.H. in pursuing the claim. Similarly medical and dental expenses of the nature contemplated by the contract could be claimed as well as legal expenses not covered by legal aid, if such had been incurred." per Deputy Judge Beeson (as she then was) at p. 12 of her judgment.

7. As can be seen, some of the best minds of the Judiciary have addressed the problem directly or obliquely. Roberts CJ gave full reasons for deciding that the Labour Tribunal has no jurisdiction to determine claims for unliquidated damages. Hunter JA explained the conceptual difficulties with the interpretation of Paragraph 3 of the Schedule to the Labour Tribunal Ordinance, Cap. 25. It is generally thought that his Lordship regarded that Paragraph as not a bar to claim for unliquidated damages. Hunter JA went on to explain what types of claims posed with fixed sums should be treated as claims for unliquidated damages.

8. Rhind J subsequently held in the appeal case before him that the Tribunal should have proceeded to assess unliquidated damages, thus implicitly recognizing jurisdiction in the Tribunal to award unliquidated damages. However, it is quite clear from a close study of his judgment that the attention of the learned judge was not drawn to the precise wording of Paragraph 3 of the Schedule to the Labour Tribunal Ordinance, Cap. 25 nor to the reported judgments of Roberts CJ and Hunter JA. The judgment of Beeson J on appeal from the Labour Tribunal expressly stated that the decision of Rhind J was being followed and she concluded her decision by enumerating the heads of damages that should be assessed by the Tribunal.

9. In the light of such diametrically opposite views held by appellate judges, the learned presiding officer cannot be blamed for following one authority rather than the other. I do not think it really helps to have one more judge of the Court of First Instance pontificating on the jurisdiction of the Tribunal in this appeal. It is high time that the Court of Appeal should settle this important and nagging issue once and for all. But there is no provision for direct referral to that higher forum. Hence I should give leave to appeal and hope that the matter will in due course proceed further up.

10. My attention has been drawn to a number of decisions by H.H. Judge C.B. Chan in the District Court awarding common law damages in similar cases. If indeed the Labour Tribunal has jurisdiction to award unliquidated damages, the jurisdiction is exclusive and the District Court has no power to deal with these cases except on transfer from the Tribunal. I suggest, pending the final outcome of this appeal, the Labour Tribunal should defer decision on similar cases or transfer them to the District Court or the Court of First Instance.

11. As to the problem relating to constructive dismissal, obviously, if the Labour Tribunal has no jurisdiction over this item of claim the views of the learned presiding officer are irrelevant. But clarification by the higher courts on the legal question will definitely assist the District Court and the Labour Tribunal in analogous cases. Hence, I would grant leave to appeal on this question too.

12. Accordingly, there is leave to appeal. And I order that an early date be fixed for hearing of the appeal. Meanwhile, both parties are referred to the Director of Legal Aid in the hope that the Director may see fit to render assistance to the parties and the courts on appeal.

13. It may be that a more expedient solution to the jurisdictional question is by legislative amendment, especially if this case for whatever reason does not proceed to the Court of Appeal. Hence I direct that a copy of this judgment be sent to the Secretary for Education and Manpower for attention and action if appropriate.

14. I would add that prior to the commencement of the hearing before me, Mr. James Collins of counsel joined the applicant waiting in chamber. Mr. Collins applied through my clerk to be present at the hearing to assist the applicant. I told my clerk to tell Mr. Collins to leave because the hearing will be in chambers. Mr. Collins refused to leave until I threatened to have him forcibly removed. I think the conduct of Mr. Collins is disgraceful. He, of all people, should know that in R v. Bow County Court, ex parte Pelling, The Independent Law Reports, 1st October 1999, the English Court of Appeal held that a person has no right to apply to the court to play the role of a McKenzie friend of a litigant in person and because of that the court does not even have to give reasons to that "friend" as to why he is being rejected. I follow this decision but extend the courtesy of showing the applicant why I refused to admit her "friend".