Razafindrakoto Fanjanirina Marina F. v. Raharja, Group Ltd and Others

HCSA 35/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 35 OF 2016

(ON APPEAL FROM SCTC NO 9915 OF 2016)

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D E C I S I O N

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Introduction

1.On 17 March 2016, the Razafindrakoto Fanjanirina Marina F. (“RFMF”) issued SCTC9915/2016 in the Small Claims Tribunal (“Tribunal”) against Raharja, Group Limited (“D1”), Ample Corporation Limited (a licensed moneylender, “D2”) and Win Dragon Employment Limited (“D3”) for repayment of a sum of HK$16,000 being “excessive and unlawful job placement commission via or on behalf of [D1]” (“ST Case”). The claim amount was revised down to HK$15,589 (see paragraph 10 below).

2.On 11 October 2016, the trial was heard by Ms S Wong (“Adjudicator”). The Adjudicator dismissed RFMF’s claim, and ordered her to pay costs to D1 and D2, but made no order as to costs in respect of D3 (“ST Order”).

3.On 17 October 2016, RFMF applied for leave to appeal on point of law (“Leave Application”) on the following grounds:

(a)   the Adjudicator failed to investigate her claim in accordance with section 16 of the Small Claims Tribunal Ordinance Cap 338 (“Ordinance”);

(b)   the findings made by the Adjudicator were irrational as being unsupported by credible evidence, and the Adjudicator’s decision made reference to irrelevant facts; and

(c)   the Adjudicator’s decision was based on evidence in a foreign language that was not translated to RFMF, and there was failure to ask for translation of relevant documents that the Adjudictor relied.

4.On 18 November 2016, the Adjudicator handed down her Reasons for Judgment (“Reasons”).

Legal principles: leave to appeal

5.Section 28(1) of the Ordinance provides that leave to appeal may be granted where the proposed ground of appeal involves a question of law alone or is on the ground that the claim is outside the jurisdiction of the Tribunal. The threshold onus of an applicant is to show that the intended appeal has arguable grounds.[1]

6.Further, it is trite that findings of fact by the Tribunal are generally immune from challenge as they involve no error of law unless such is perverse or irrational or where there is no evidence to support the decision or where the decision was made by reference to irrelevant factors or without regard to relevant factors.[2]

Background

7.RFMF was a Malagasy recruited in Madagascar to work as a domestic helper in Hong Kong. She arrived in Hong Kong on 10 July 2015 and commenced employment with Madam Pung Yuen Shan (“Pung”) on 25 July 2015. The employment lasted for slightly more than 5 months. The termination of employment ended in dispute. RFMF filed a claim in the Labour Tribunal against Pung with several heads of claim including a claim for underpayment of wages, and Pung also filed a counterclaim (“LT Case”). The LT Case eventually settled under a consent order whereby Pung was to pay a sum of HK$10,000 to RFMF in full and final settlement of the claim and counterclaim.

8.Thereafter, RFMF issued the ST Case. It was said RFMF’s monthly salary under her then employment with Pung was HK$4,110, but Pung gave HK$910 to RFMF and HK$3,200 to the order of D2 who had purportedly granted a loan to RFMF in the sum of HK$22,730 (“Alleged Loan”). RFMF’s case was she had never borrowed the Alleged Loan, so the monthly payment of HK$3,200 out of her salary to the order of D2 was for illegal commission charged by D1, D2 and D3 (collectively, “Ds”) being her employment agencies contrary to the Employment Agency Regulations Cap 57A.

9.The Alleged Loan was supported by a document purportedly dated 13 July 2015 that provided for (a) a loan from D2 to RFMF in the sum of HK$22,730 (total repayment HK$25,600), and (b) such loan to be repaid by RFMF with interest at 32%pa by 8 equal monthly instalments of HK$3,200 (“Loan Document”).

10.D2 claimed RFMF entered into the Loan Document in Hong Kong on 13 July 2015, but RFMF denied this and claimed this was a false document for fabricating the Alleged Loan to cover up the collection of unlawful commission, ie the 5 monthly sums of HK$3,200 totalling HK$16,000 that Pung deducted from her salary less HK$411 (being the lawful commission that could be charged by RFMF’s employment agencies).

11.In the LT Case, Pung claimed when Mr Ng (D3’s representative) brought RFMF to her on the 1^st day of employment, he gave her RFMF’s written authorisation for deducting a monthly sum of HK$3,200 from her salary for a period of 8 months to repay the Alleged Loan that RFMF borrowed from D2.

12.Despite the differences between RFMF and Ds, there was no dispute that (a) D2 received a total sum of HK$16,000 from RFMF, and (b) no part of the Alleged Loan was paid to and/or received by RFMF.

13.According to paragraph 8 of the Reasons, the Adjudicator considered the relevant issues in the ST Case were (a) whether the 3 Ds were employment agencies of RFMF, (b) whether RFMF borrowed the Alleged Loan, and (c) if not, whether the 5 monthly sums Pung deducted from RFMF’s salary and paid to the order of D2 were part payment of agency fee. On these issues, the Adjudicator preferred the evidence of D2, and found (i) only D3 was RFMF’s employment agency, (ii) RFMF attended D2’s offices on 13 July 2015 to take out the Alleged Loan and to sign the Loan Document, and (iii) there was no need to deal with (c) above in light of the findings in (i)-(ii) above.

Discussion

14.Ms Naphtali, solicitor for RFMF, submitted there were arguable grounds of appeal.

15.In relation to the 1^st ground as to failure of the Adjudicator to make appropriate enquiries under section 16(3) of the Ordinance,[3] Ms Naphtali submitted that having made her finding that RFMF attended D2’s offices in Hong Kong on 13 July 2015 to take out the Alleged Loan, it was incumbent on the Adjudicator to go on and investigate into the circumstances of the Alleged Loan. It was suggested had proper enquiries been made, it would have been obvious the terms of the Loan Document were onerous (interest rate was 32%pa and monthly repayment was about 78% of RFMF’s wages), the Alleged Loan had no obvious benefit to RFMF (the Alleged Loan was paid to a Mr Kadi Soetanto (whom RFMF claimed she did not know) rather than to RFMF), RFMF was vulnerable (she had limited English/Cantonese language skills, she allegedly entered into the Loan Document within 3 days of arrival in Hong Kong when she was reliant on D3 for hostel shelter, and the terms of the Loan Document were not translated to her in her native language), and D2 knew of RFMF’s vulnerability (D2 was a moneylender in the business of granting loans to domestic helpers, D2 knew from review of RFMF’s passport that she had just arrived in Hong Kong, D2 knew the Alleged Loan was to be paid to a Mr Kadi Soetanto, and the monthly repayment amount was about 78% of RFMF’s salary).

16.Ms Naphtali submitted had proper enquiries of the above matters been made, they would have led to further investigations as to whether the Alleged Loan was enforceable or ought to be set aside on the grounds of (a) common law unconscionable conduct, (b) the Unconscionable Contracts Ordinance Cap 458, (c) undue influence and/or (d) fraud or misrepresentation. It was said these considerations were significant as the essence of RFMF’s claim was she had been defrauded of HK$15,589, and failure to make the aforesaid enquiries amounted to an error of law that arguably justified granting of leave to appeal.

17.In relation to the 2^nd ground as to the lack of credible evidence to support the findings/inferences made by the Adjudicator,[4] Ms Naphtali made 4 points:

(a)   Ms Naphtali submitted that in paragraph 38 of the Reasons the Adjudicator stated she did not accept RFMF’s evidence “that she doesn’t understand English to write on the documents”, which suggested the Adjudicator was satisfied RFMF understood the terms of the documents she signed. It appeared the Adjudicator relied on Pung’s witness statement in the LT Case in coming to that conclusion, but in fact Pung’s evidence suggested RFMF’s English and Cantonese language skills were limited, and sometimes Pung and her mother had to resort to body language for communication with RFMF.

(b)   The Adjudicator found the only logical conclusion as to why RFMF allowed Pung to deduct HK$3,200 from her salary each month without objection was that she knew what the deduction was for, and she rejected RFMF’s claim that she was too afraid to protest. Ms Naphtali submitted the Adjudicator’s conclusion was suspect because she failed to
properly consider RFMF’s explanation that she believed the monthly payment was going towards D1 for repayment of her flight and processing of her work visa, and further failed to consider RFMF’s difficult work condition and her vulnerable state before rejecting RFMF’s claim of being afraid to protest. Ms Nephtali submitted in such circumstances there was arguable basis to impugn the inference drawn by the Adjudicator from RFMF’s lack of protest, ie she knew such deducted sums were paid to D2 purportedly under the Loan Document.

(c)   RFMF’s case in respect of various documents that appeared to bear her signatures was either the documents were not explained to her, she did not understand them or she did not sign them, ie some documents were forgeries. The Adjudicator rejected RFMF’s allegation of forgery. Ms Nephtali submitted at paragraphs 32-38 of the Reasons the Adjudicator appeared to suggest that since D2 offered to commission a handwriting expert to give opinion on the genuineness or otherwise of the signatures but RFMF disagreed, the logical conclusion was “those signatures and handwritings were those of [RFMF’s]”. Ms Nephtali disputed the logic of that conclusion (ie it did not necessarily follow that signatures/handwriting would be genuine if a handwriting expert was declined), especially in view of the concern over partiality of any handwriting expert to be commissioned by D2 and not by the Tribunal.

(d)   Ms Naphtali submitted that in rejecting RFMF’s case that she did not borrow the Alleged Loan from D2, the Adjudicator appeared to have rested her finding on the following: (i) RFMF’s signature on the Loan Document was genuine, (ii) RFMF understood the terms of and signed the Loan Document, and (iii) D2’s Ms Cu (who claimed to have dealt with RFMF and to recall RFMF’s attendance at D2’s offices because RFMF had a dark skin tone and wore black colour clothing) was a credible witness.

Ms Nephatli pointed out there was countervailing documentary evidence against the Adjudicator’s findings. There were 2 documents produced by Pung in the LT Case that were given to her by D3 being firstly a Chinese power of attorney dated 13 June 2015 (a month before RFMF arrived in Hong Kong) purportedly signed by RFMF that stated RFMF obtained a loan from D2 in the sum of HK$25,600 for personal reasons while RFMF was in Madagascar, and secondly a signed statement by a Chen Xing Mei (“Chen”) of D3 that referred to a meeting between D3 and RFMF on 10 July 2015 when Chen was given a copy of the aforesaid power of attorney and a corresponding debt statement that referred to a loan taken out by RFMF from PT ET (Madagascar) before she left Madagascar.

Ms Nephtali submitted the significant inconsistency between these documents which referred variously to (1) a purported loan taken out by RFMF a month earlier when she was still in Madagascar and (2) the Alleged Loan that Ds claimed were made between RFMF and D2 in Hong Kong a month later must be properly considered, assessed and resolved before any proper finding as to the vitality of the Alleged Loan could be made, but it appeared from paragraph 41 of the Reasons the Adjudicator “did not quite understand [RFMF’s] argument” and consequently failed to properly address the point. Ms Nephtali submitted the Adjudicator also failed to consider the inherent improbability, as she should, that RFMF would have made her way to D2’s offices 3 days after her arrival in Hong Kong, signed an English financial document that she understood was for a loan, paid over the entire loan to a Mr Kadi Soetanto, and agreed to repay such loan with interest at a substantial rate by deducting and paying over 78% of her salary each month for 8 months.

18.Ms Nephtali submitted it was arguable the aforesaid findings/inferences were perverse or irrational in the sense that they were not supported by credible evidence and/or proper investigation/ consideration.

19.In relation to the 3^rd ground as to reliance on foreign language document without translation, RFMF contended as D3 held her passport D2 could not have taken a copy of her passport when granting the Alleged Loan as alleged, and hence Ds’ claim of the Alleged Loan was not credible. But the Adjudicator rejected such argument on the basis of exhibit 3D7 (which was in Indonesian and Chinese languages) that allegedly made clear RFMF did not give her passport to D3 until 15 July 2015. Ms Nephtali submitted it was wrong and/or unfair for the Adjudicator to accept or place weight on such document which RFMF could not read or understand without provision of translation.

20.Having carefully considered RFMF’s proposed grounds of appeal and Ms Nephtali’s submissions, I am persuaded leave should be granted for RFMF to appeal against the ST Order.

21.At first blush, RFMF’s above complaints appear to be attacks on the Adjudicator’s findings of fact.  But careful consideration of Ms Nephtali’s submissions showed that although her criticisms were targeted at findings made by the Adjudicator, they arguably come within the potential errors that are liable to be impugned in the senses discussed in paragraph 6 above.  At this stage of considering whether to grant leave to appeal, it is inappropriate for me to dwell on the merits of RFMF’s proposed grounds of appeal and/or to come to any definitive view, but having reviewed the Reasons, RFMF’s proposed grounds of appeal and Ms Nephtali’s submissions, I am persuaded RFMF’s proposed grounds in paragraph 3 above are arguable. 

Conclusion

22.I therefore grant leave for RFMF to appeal against the ST Order on the grounds set out in the Leave Application. I also order that costs of the application be costs in the cause of the appeal.

Ms Kelly Nephtali, of Kirkland & Ellis, for the claimant/applicant