Pratt, Jon Vaughan Merrick v. Barclays Capital Asia Ltd

HCA 1295/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.1295 OF 2016

(Transferred from LBTC 736 of 2016)

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D E C I S I O N

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1.This is an application by the defendant Barclays Capital Asia Ltd (“D”) to strike out (a) §§ 7A, 13 to 16, 28 to 50, 59 to 85 and 89A and (b) §§ 13 to 16 of the amended statement of claim (“statement of claim”) of the plaintiff (“P”). The grounds for the application are that (i) they disclose no reasonable cause of action and/or (ii) they are scandalous, frivolous or vexatious, and/or (iii) they may prejudice, embarrass or delay the fair trial of the action; and/or (iv) they are otherwise an abuse of the process of the court.

The parties

2.D is a company incorporated in Hong Kong.  It is a wholly owned subsidiary of Barclays Bank PLC (“Barclays PLC”).  Barclays PLC has its headquarters in London, UK.

3.P was D’s employee under an employment contract dated 30/8/2010 (“Employment Contract”).

Parts of the claim subject to the application to strike out

4.P’s employment was terminated on 21/04/2016.  P sues D for damages for wrongful termination.  

5.Part of P’s employment remuneration consisted of a discretionary incentive award (“Award”). P had been given Awards for the performance years of 2012, 2013 and 2014.  P in this action claims against D for the unpaid and unvested benefits of the Awards. This claim is made in §§ 7A, 28 to 50, 59 to 85, 89(ii) and 89A of the statement of claim.

6.The next part of the claim subject to this application is contained in §§ 13 to 16 of the statement of claim.  The ground of the striking out is irrelevancy.

The Awards

7.The discretionary incentive awards scheme (“Scheme”) is provided in the Employment Contract in the following clauses:

“The [Defendant] operates a [Scheme] for employees, the nature, value and delivery of which (if any incentive awards are indeed made) are entirely at the [Defendant’s] discretion. Such incentive awards may include a cash payment to be made via payroll (subject to statutory withholdings), equity-based awards, or such other form of awards as the [Defendant] deems appropriate.

The making of any discretionary incentive awards will depend upon individual, team and [the Defendant’s] performance and your adherence with the [Defendant’s] values, policies (including but not limited to those for risk and compliance) and employee standards.

Employees who are in employment and not working out a period of notice on the 31^st October will be considered for participation in the [Scheme] for the Performance Year (1^st January to 31^st December). Actual delivery of any incentive award is subject to you being in Eligible Employment (as defined in the section dealing with Remuneration and Benefits: General) on the delivery date. Normally any awards would be made in the first quarter of the year following the Performance Year. Furthermore, any disciplinary process may at the [Defendant’s] discretion result in the reduction (in part or in full) or delay in delivery of any or all of such incentive awards.

[The Defendant] reserves the right to decline to make discretionary incentive awards at its absolute discretion or change the timing and/or nature of its [Scheme] at any time.”

8.For the performance years of 2011, 2012, 2013 and 2014, D had in exercise of its discretion under the said clauses granted Awards to P.  The Awards were granted in three forms; namely a deferred conditional right to receive shares of Barclays PLC, a deferred conditional right to receive cash and a “service credit”.  There is no issue about the Awards granted in respect of the performance year 2011 as all benefits therein had been vested unto P. 

9.The letters which awarded P the conditional right to receive shares for the performance years of 2012, 2013 and 2014 (B/157-163, 172-177 and 190-195) expressly provided that the shares mentioned therein were granted under the Barclays Group Share Value Plan (“SVP”).  The letters further stated that the vesting of the shares on the vesting dates was subject to conditions which included the rules of the SVP (“SVP Rules”) and that the Barclays Group Share Schemes Committee (“SVP Committee”) might suspend the Award where P was under investigation for a regulatory or disciplinary matter.   

10.The letters which awarded P the conditional right to receive cash for the performance years of 2012, 2013 and 2014 (B/164-167, 178-181 and 186-189) also expressly provided that the Awards therein were granted under the Barclays Group Cash Value Plan (“CVP”).  The letters further stated that the vesting of the benefits in the Awards on the vesting dates was subject to conditions which included the rules of the CVP (“CVP Rules”) and that the Barclays Group Cash Plans Committee (“CVP Committee”) might suspend the vesting the benefits in the Award where P was under investigation for a regulatory or disciplinary matter.

11.The Awards to P of “service credit” for the performance years of 2012, 2013 and 2014 were also granted under the CVP.  They were also in the form of a conditional right to receive cash (B/168-171, 182-185 and 196-199).  The letters of award also stated that the vesting of the service credit was subject to conditions which included CVP Rules and that the CVP Committee might suspend this Award where P was under investigation for a regulatory or disciplinary matter.

12.All these letters provided that the terms of the SVP and CVP were separate from and did not form part of the Employment Contract.

13.Clause 2.1 of the SVP Rules (B/110) and clause 2.2 of the CVP Rules (B/146) provided that the remuneration committee for the time being of the board of Barclays PLC (“Remuneration Committee”) might grant any employee of Barclays PLC and its subsidiaries a conditional right to acquire shares or capital instruments under the SVP and a conditional right to receive cash under the CVP respectively. 

14.Clause 3.6 of the SVP Rules (B/3/113) and clause 3.5 of the CVP Rules (B/4/148) also confer powers on the Remuneration Committee to suspend the vesting of shares or payment of cash if the employee was at the time of vesting or payment involved in an investigation in connection with a disciplinary or regulatory matter.

15.Mr Man, SC, counsel for D correctly explained in his written submissions the mode of vesting of the SVP and CVP Awards as follows.  If the performance year is “Year x”, the giving of the discretionary awards of deferred shares, cash and service credit would take place in or around March of “Year x+1”.  The benefits in the Awards for shares and cash would be vested unto P in three tranches (subject to the terms of the SVP and CVP).  The three tranches of benefits would vest in March of three consecutive years of “Year x+2”, “Year x+3” and “Year x+4”. 

16.Regarding the service credit, it amounted to 10% of the total value of the deferred cash Award in respect of a particular performance year, but it is payable on the same date as the third tranche of the deferred cash and share Awards to participants who were still in employment with a member of the Barclays Group on that date.

17.I have already mentioned above that the Awards for performance year 2011 had been given to P and all benefits therein had vested unto P in March 2013, 2014 and 2015.  The cash in the service credit also vested in March 2015. 

18.However, for the Awards given for the performance years of 2012, 2013 and 2014, there were unvested tranches of benefits and service credits which would have vested in March 2016, 2017 and would vest in March 2018 (see §§ 33 to 43 and 84 to 85 of the statement of claim) (the unvested benefits).

19.P’s employment with D was terminated by D on 21 April 2016 on the ground of redundancy.     

20.By a letter dated 23 May 2016, D informed P’s solicitors that the SVP and CVP were adopted by Barclays PLC and were administered respectively by the SVP Committee and CVP Committee, duly authorized committees of the Remuneration Committee.  The unvested benefits were suspended by the SVP and CVP Committees in accordance with SVP and CVP Rules (C/207-209).  

P’s claims and D’s grounds of defence

21.P then filed a claim for his unvested benefits against D at the Labour Tribunal.  The claim was then transferred to this court. 

22.P claims in this action (i) the unvested benefits or damages thereof (§§ 33 to 43 and 84 to 85 of the statement of claim), (ii) the Award for the performance year 2015 which should have been granted to him but for the wrongful termination of his employment (§§ 86 to 89(1)) and (iii) damages for the loss of salary and other remuneration in cash and/or kind that he would otherwise have earned or been granted since his termination on 21 April 2016 (§ 89(3)).

23.D’s defence to the claim for unvested benefits or damages thereof is that the Awards for the respective performance years were granted by Barclays PLC through the SVP and CVP Committees and not by D.  The SVP and CVP were also administered by Barclays PLC through the said committees and not by D.  Hence, D pleads that this claim should be struck out (§§ 7, 8 and 21 of the defence).

24.Regarding the claim for the Award for the performance year 2015, D pleads that since P was serving his three-month termination notice period in March 2016 and thus not in eligible employment, his entitlement to the Award was set at “0” (§ 31 of the defence).  This claim is not subject to the application to strike out. 

25.D, in answer to P’s claim for damages for loss of salary and other remuneration since 21 April 2016, pleads that P’s employment was terminated because of redundancy.  It further pleads that this claim was embarrassing as P did not specify whether he was claiming damages on the basis that he would have otherwise remained in D’s employment indefinitely or any particular date (§ 33) of the defence).  This claim is also not subject to the application to strike out.

The legal principles

26.Mr McLeish, counsel for P reminded me that it is only in plain and obvious cases that the court should exercise its powers to strike out, the court should not decide difficult points of law in striking out applications, and the claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out: §18/19/4 of Hong Kong Civil Procedure 2017 (“HKCP”); Ha Francesca v Tsai Kut Kan (No. 1) [1982] 1 HKC 382 CA at 392G-H.

27.Furthermore, the burden lies on the party seeking to strike out to demonstrate it is a plain and obvious that the other party’s claim is bound to fail: §18/19/4, HKCP 2017.  Where the legal viability of a cause of action is sensitive to the facts, an order to strike out should not be made: §18/19/4 of HKCP; Yue Xiu Finance Co Ltd & Anor v Dermot Agnew & Ors[1996] 1 HKLR 137 at 141D-E.  Finally, it is inappropriate to strike out a claim in a case in an area of the law which is in the process of developing: §18/19/4 of HKCP 2017; Tadjudin Sunny v Bank of America, National Association [2010] 3 HKLRD 417 CA at §§7 and 56.

D’s application to strike out the claim for unvested benefits 

28.D’s stance in this application is that its obligation, as the employer under the Employment Contract, was only to operate the Scheme under which the form and delivery of any Awards (if any should be made) were determined entirely at D’s discretion. 

29.With regard to performance years 2012, 2013 and 2014, such obligation was satisfied by the grant of Awards by Barclays PLC under the CVP and SVP to P.  

30.Since the Awards were granted under the SVP and CVP which were administered by Barclays PLC, P should have sued Barclays PLV for the unvested benefits outstanding in the Awards.  P has thus sued the wrong party for the vesting of these benefits or damages thereof. 

31.To make an illustration to amplify D’s argument, the situation is just like D buying an annuity policy from a third party insurer in satisfaction of its obligation under the Scheme.  Once D has delivered the annuity policy to P, D would drop out from the picture.  P’s enjoyment of the annuity would be in terms of the policy under which the annuity was sold by the insurer.  If there should be any dispute, it would only be a matter between P and the insurer.  It would not involve D.  D also has no right or locus to be involved in the resolution of the dispute.   

32.In the facts of this case, the position of Barclays PLC is analogous to that of the third party insurer and the Awards are likened to the annuity policy.  The fact that D is a member of the Barclays Group is neither here nor there.  If P wants to enforce his rights outstanding in the Awards, he should do so against his counterparty Barclays PLC under the SVP and the CVP.  The SVP and CVP Rules also contain a mechanism for dispute resolution. 

P’s grounds of opposition to the application to strike out the claim for unvested benefits

33.Mr McLeish summarized the basis of the claim for the unvested benefits as follows:

(1)  P entered into an employment contract with D, a Hong Kong employer under which D undertook to operate the Scheme that D would determine entirely at its discretion the nature, value and delivery of the Incentive Awards to be given to P;

(2)  the employment contract expressly provides for Hong Kong law to apply and for the Hong Kong courts to have exclusive jurisdiction over it;

(3)  this gives P the benefit of recourse to the courts of Hong Kong, the protections of the Employment Ordinance; Cap 57 (the “EO”) generally and of Hong Kong common law, which in relation to the Awards has advanced in a more favourable way for employees than English law: see Tadjudin Sunny v Bank of America, National Association (CACV 12 of 2015) (unreported; 20 May 2016) (the “Substantive CA Tadjudin Judgment”), in particular §§ 63 to 85 in relation to the implication of the Anti-Avoidance Term, distinguishing House of Lords authority;

(4)  in breach of D’s obligation under the employment contract to operate the Scheme and determine the nature, value and delivery of the Awards to him entirely at its (i.e. D’s) discretion, D ceded all these matters to Barclays PLC, which has subjected its operation of the Scheme to rules that apply the law of England and require resolution of disputes in LCIA arbitration proceedings (and/or provide for exclusive jurisdiction of the English courts under the SVP rules);

(5)  the ceding of all these matters to Barclays PLC has been done without any or any proper notice to P of a variation in the Employment Contract to permit this as required by the Variation Clause of the Employment Contract (but even if such notice had been given, it is P’s case that the variation would not have been an exercise of reasonable discretion as required by that clause);

(6)  in any event, D does not contend that there has been any variation of the Employment Contract to permit the ceding;

(7)  in response to P’s claims to his unvested benefits in his Awards pursuant to his rights under his employment contract, D says P is suing the wrong party because D played and plays no role in deciding whether P should receive the Awards or determining the nature, value or delivery of the same; and

(8)  D ought not to be allowed to defend the claim on this ground because, D, in so saying, is relying on its own wrong in ceding operation of the Scheme to Barclays PLCin breach of its obligation to operate the Scheme and determine the nature, value and delivery of the Incentive Awards to P entirely at D’s discretion.

34.Mr McLeish further submitted that the issue of whether D was/is under the Operation Obligation to operate in the entirety the Scheme rather than ceding it to Barclays PLC is a question of construction of the Employment Contract.  That is a fact sensitive question since the interpretation of a contract is the ascertainment of the meaning the document would convey to a reasonable person having all the background knowledge which would reasonably have available to the parties in the situation in which they were at the time of the contract: I.C.S. Ltd v West Bromwich B.S. [1998]1 WLR 896 HL per Lord Hoffman at 912 H.

35.He also contended that the proposition that D is obliged under the Operation Obligation to operate Scheme is supported by the construction of the incentive award clause which provided:

“Such incentive awards may include a cash payment to be made via payroll (subject to statutory withholdings), equity-based awards, or such other form of awards as the firm deems appropriate.” (emphasis supplied).

36.He further submitted that what was intended in the said clause was that D (the firm) would decide whether an Award would be granted to P, and if so, determine the nature, value and delivery of the Awards, under a Hong Kong employment contract subject to Hong Kong law and jurisdiction of the Hong Kong courts.  Contrary to what D contends, the obligation on D to do these things cannot be satisfied by a non-contracting third party, the Barclays PLC in London choosing to apply English law and require disputes to be determined by arbitration in the London Court of International Arbitration (and/or the exclusive jurisdiction of the English courts under the SVP rules).

37.Mr McLeish also submitted that the exercise of powers in employment contracts over discretionary bonuses is a developing area of the law that ought not to be ruled upon other than on full argument advanced on the basis of facts established by evidence led at trial: Interlocutory Tadjudin CA Judgment per Stone J at §7.

38.Mr McLeish also delved into the EO to say that the unpaid/unvested portions of P’s Incentive Awards would come within the definition of “wages” under section 2(1) of the EO for the reasons given below. On that basis, they are subject to all relevant provisions of the EO, include Part V, section 25 of which requires the payment of unpaid wages within 7 days of termination of employment, and section 70, which renders void any term of an employment contract that purports to extinguish or reduce any right, benefit or protection under the EO.

39.He referred to the exclusive proviso in sub-section (f) of the definition of “wages” which excludes “any annual bonus, or any proportion thereof, which is of a gratuitous nature or which is payable only at the discretion of the employer”.  But he submitted that this exclusive proviso does not apply because it is D’s case that the unvested benefits of P’s Awards were granted and are administered at the discretion of Barclays PLC and not by D.  Hence, the unvested benefits were not payable only at the discretion of D, the employer.  Accordingly, on D’s case, the proviso in sub-section (f) does not apply.  The consequence is that P’s unvested benefits in his incentive Awards are “wages” subject to all the protections of the EO as enforced and adjudicated on by Hong Kong courts.

40.To boost his point that the Awards were granted and are administered at the discretion of Barclays PLC and not by D, Mr McLeish went so far in oral submissions to say that the granting of the Awards had nothing to do with D.  I think this argument is fanciful.  It is clear and obvious that the Awards were procured by D pursuant to the Scheme.  They were procured by D exercising its discretion under the Scheme.  Otherwise, there was no reason whatsoever for Barclays PLC to have granted them to P. 

41.I would also refer to the undisputed affidavit evidence of Ms Rachel Huf, the Asia Pacific General Counsel of D that (A/69-70):

“13. For each of the performance years of 2012, 2013 and 2014, the Defendant operated a {Scheme}, and, in exercise of its discretion under the Discretionary Incentive Award Clause, decided that the Plaintiff was eligible to receive a discretionary incentive award.”

Analyses and decision on striking of the claim for unvested benefits

42.P had enjoyed the vesting of the deferred conditional benefits in the Awards from March 2013 to March 2015.  The vesting of benefits was suspended from March 2016 onwards.  He had no complaint about the Awards that he had received for the performance years 2011, 2012, 2013 and 2014 until the vesting of benefits of the Awards was suspended in March 2016. 

43.Judging from P’s claim for unvested benefits for the performance years 2012 to 2014 ((§§ 33 to 43 and 84 to 85 of the statement of claim), he is just claiming for the quantities of outstanding benefits, no more and no less.  Therefore, he is happy with the quantities of the benefits granted in the Awards for these performance years.  In fact, the quantum of his claim for the Awards for the performance year 2015 is based on the quantum of the Awards for 2014.

44.P is also not asking D to exercise its discretion under the Scheme afresh to vary the nature and quantity of the benefit in the Awards.  He is not suggesting that D had exercised the discretion in the Scheme for those performance years otherwise then “in good faith, rationally and for a proper purpose, and not arbitrarily or capriciously or in a manner which is not bona fide” (see § 55 of Substantive CA Tadjudin Judgment).  His argument had nothing to do with how D had exercised the discretion under the Scheme for the performance years 2012 to 2014 which resulted in the Awards that had been given to him save and except that he wanted D to continue to be liable to him until all the benefits in the Awards are vested in him. 

45.Hence, the argument on this striking out application has nothing to do with the exercise of powers over discretionary bonuses in employment contracts and is not in that developing area of the law. 

46.It is only a legal issue of whether, on a proper interpretation of the incentive scheme clause, D could have procured an Award for P that would be administered by a third party to D’s exclusion. 

47.If P can sue D for the unvested benefits, the remaining issue will be the ground for suspending the vesting of the benefits.  That also has nothing to do with D’s exercise of the discretion under the Scheme.

48.I now consider Mr McLeish’s submissions as reproduced above.  He referred to the Employment Contract which is governed by Hong Kong law, subject to the exclusive jurisdiction of the Hong Kong courts and gives P the benefit of recourse to the courts of Hong Kong, the protections of the EO generally and of Hong Kong common law. 

49.He then referred to D’s obligation to operate the Scheme and to determine the nature, value and delivery of the Awards to P entirely at its discretion. 

50.He submitted that D, in procuring the Awards for the performance years of 2012 to 2014 for P, had ceded to Barclays PLC all such obligation.  The ceding subjected the operation of the Scheme to rules that apply the law of England and require resolution of disputes in LCIA arbitration proceedings (and/or provide for exclusive jurisdiction of the English courts under the SVP rules).  He then submitted that this was D’s breach of the Employment Contract.

51.Since this is D’s breach of the Employment Contract, D therefore cannot rely on this breach to say that P can only sue Barclays PLC and not D. 

52.Mr McLeish’s further referred to the words “[s]uch incentive awards … as the firm deems appropriate”and submitted that the terms of the Scheme require D to carry the Awards through to their complete vesting, realization and exhaustion.  He concluded by saying that this obligation of D cannot be satisfied by a non-contracting third party, the Barclays PLC in London which had chosen to apply English law and require disputes to be resolved by London arbitration or the exclusive jurisdiction of the English courts under the SVP rules.

53.In the light of the development of Mr McLeish’s arguments, it is clear that P’s charge is against D’s “ceding its operation of the Scheme to Barclays PLC to D’s exclusion by procuring the Awards for P”.  The issue is whether D was entitled, in terms of the Scheme in the Employment Contract, to procure to P the Awards that were granted and are administered by Barclays PLC to D’s exclusion.   It is the same legal issue that I have concluded in § 46 above.  It has nothing to do with D’s exercise of any discretion in deciding what, if any, benefits were to be given to P as P is not seeking to vary them. 

54.I would also say that even if the SVP and CVP Rules would submit all disputes relating to the Awards to the Hong Kong courts applying Hong Kong law, P’s objection would remain the same.  The thrust of Mr McLeish’s arguments is on the ceding of D’s obligation to a thirty to D’s exclusion.  The references to the applicable law and jurisdiction for resolving disputes are mere appendages to his submissions though in reality they may be P’s real concerns.  In any case, Barclays PLC has through Mr Man made it clear that it is willing to arbitrate with P his entitlements, if any, to the unvested benefits in Hong Kong in accordance with Hong Kong law.  But that will not affect my decision on this application.

55.On the question of whether D was entitled, in terms of the Scheme, to procure to P Awards granted and administered by Barclays PLC or any third party to D’s exclusion or D had to carry the Awards through to their complete vesting, realization and exhaustion, it is to be answered according to the interpretation of the clause of the Scheme.

56.The clause in the Employment Contract reads:

“The [Defendant] operates a discretionary [Scheme] for employees, the nature, value and delivery of which (if any incentive awards are indeed made) are entirely at the [Defendant’s] discretion. Such incentive awards may include a cash payment to be made via payroll (subject to statutory withholdings), equity-based awards, or such other form of awards as the [Defendant] deems appropriate.”

57.I do not think the interpretation of this clause is fact sensitive as the statement of claim has not so suggested.  Mr McLeish has also not suggested what background facts would require the clause to be interpreted in what particular way. 

58.I have made the illustration of D procuring to P an annuity sold by a third party insurer as the Award for P pursuant to the Scheme for a performance year.  I can also think of another illustration of D procuring to P a bundle of shares of a company listed in Hong Kong, London or New York as an Award.  Mr Man has suggested the benefits of a third party club membership as an Award.  I think all these can be Awards properly procured by D in satisfaction of the terms of the Scheme. 

59.For the bundle of shares of a listed company, if there should be any dispute between P and the company over the declaration of dividends or other rights of a shareholder, the dispute will have to be resolved between P and the company to the exclusion of D.  I cannot see how D can be accused of ceding its operation of the Scheme to the listed company even though the company may be listed in London or New York instead of Hong Kong.  D’s obligation in procuring the Award should be regarded as satisfied upon procuring the registration of shares in P’s name.  P may keep these shares for an indefinite period of time or long after his departure from D’s employment.  There is no reason why D should remain responsible to resolve any dispute that P may have with the company over his rights in these shares.  I say the same for the annuity that D may procure from a third party insurer and I cannot see any difference from the situation of vesting P with a club membership.

60.I also do not think that the mere fact that the Employment Contract is governed by Hong Kong laws and subject to the exclusive jurisdiction of Hong Kong courts will prevent D from procuring to P Awards granted and administered by a third party to D’s exclusion regardless of whether the disputes relating to the Awards would be resolved according to Hong Kong laws by Hong Kong courts or otherwise.

61.Regarding Mr McLeish’s argument as based on the EO, I do not think the Awards granted by Barclays PLC can be regarded as wages within the EO as they were covered by the exclusive proviso in sub-section (f) of the definition of “wages” which excludes “any annual bonus, or any proportion thereof, which is of a gratuitous nature or which is payable only at the discretion of the employer”.  I have already said that the Awards were procured by D pursuant to the Scheme and they were given to P at D’s discretion.  The EO arguments therefore have no merit.

62.All in all, I am of the view that D has satisfied its obligations in the Scheme by procuring to P the Awards in the SVP and CVP.  I do not see why D has the obligation to see to the complete vesting, realization and exhaustion of these Awards. 

63.I agree that the paragraphs in the statement of claim that claim the vesting of the unvested benefits by D or damages thereof should be struck out.  They are §§ 7A, 31 to 43, 46 to 50, 59 to 85, 89(2) and 89A.  I leave behind §§ 28, 29, 44 and 45 as they relate to the claim of Awards for the performance year 2015.

D’s application to strike out the claim for unvested benefits and P’s opposition

64.D’s application to strike out covers §§ 13 to 16 of the statement of claim.  These paragraphs say P had been performing well when in D’s employment.  He had strengthened D’s alleged weaknesses in compliance training and conduct deficiencies in administration of D’s Korea Debt Capital Markets team and chastised subordinates for their improprieties in 2010 to early 2013.    

65.Mr Man submitted that these paragraphs contain irrelevant, scandalous and vexatious criticisms of D’s past practice.  The alleged “deficiencies” occurred from 2010 to early 2013 and the latest date for an alleged “weakness” is “in or about 2014”.  Both predated the termination letter to P by a significant period of time.  P has also not relied on these allegations in his claim for alleged wrongful termination.  These pleas are irrelevant to any issue between parties.  They are included only to ventilate in public hearings various alleged “weaknesses” or “deficiencies” of D which have nothing to do with his claim.  They should be struck out.

66.Mr McLeish on the other hand argued that §§ 13 to 16 plead material facts in support of the inference pleaded in § 27 that P was at all material times rightly regarded by D to be “a trustworthy, capable, high performing and valuable employee with an unblemished record of regulatory compliance”.   He also submitted that P’s Wrongful Termination claim does rely on paragraphs 13 to 16.

67.He also submitted that the above inference is also relied on (in part) for the plea in § 81 that D had no proper grounds to designate P as “involved in an investigation” which led to the suspension of vesting of the unvested benefits and that the suspension was a breach of the Employment Contract.

68.I do not think P needs to plead and prove that he was “a trustworthy, capable, high performing and valuable employee with an unblemished record of regulatory compliance”.  D’s case for terminating his service is redundancy.  D does not seek to justify the termination by saying that he did not perform well or well enough.  His claim for Wrongful Termination therefore does not depend on his proving that he was trustworthy, capable, high performing and valuable and so on.  It is not necessary to go into these matters.  It will also cause wastage of time and costs to go into these non-issues.

69.Mr McLeish has suggested in oral submissions that since P was performing so well, he should not have been terminated despite redundancy.  But he was unable to produce upon my request any authority to support this proposition.  I think once redundancy affects a certain category of employees, it is for the employer to decide who should be retained.  It is not for the court to subsequently conduct a staff appraisal of those affected and decide who was or were not good enough to remain.

70.Regarding the point that the facts pleaded in §§ 13 to 16 give rise to an inference that D had no proper grounds to designate P as “involved in an investigation” which led to the suspension of the unvested benefits, the claim for the unvested benefits has been struck out above.  Hence, these paragraphs cannot remain for the purpose of supporting it.

Order

71.In the light of my analyses and decisions above, I order that §§ 7A, 13 to 16, 31 to 43, 46 to 50, 59 to 85, 89(2) and 89A be struck out.  P should file and serve within 7 days a fresh amended statement of claim that does not contain the struck out parts.

72.I also order that P do pay D the costs of this application to be paid upon summary taxation by me.  D has already submitted a draft bill of costs.  I direct that the solicitors for P do file and serve a list of objections, if any, within 14 days from today. Thereafter, I will tax the costs summarily on paper.  The costs to be taxed would include D’s costs in preparing the defence to the claims that have been struck out.

Mr Robin McLeish, instructed by Hart Giles , for the plaintiff

Mr Bernard Man, SC and Ms Theresa Chow, instructed by Mayer Brown JSM, for the defendant