Vermeerbergen Peter Alfred v. Swisstribe Ltd

HCLA 11/2017

[2018] HKCFI 1598

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 11 OF 2017

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 1570 OF 2014)

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Before: Hon Wilson Chan J in Court

Date of Hearing: 10 May 2018

Date of Judgment: 13 July 2018

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J U D G M E N T

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Introduction

1.The claimant appeals against the Order of the Presiding Officer (“PO”) made on 27 April 2017 (the “Order”), whereby the claimant’s application to transfer the case to the Court of First Instance was refused.  Leave to appeal was granted by this court on 21 February 2018.

Relevant Background

2.As set out in the defendant’s Skeleton Submissions, the relevant background to the present appeal is as follows.

3.On 26 May 2014, the claimant commenced a claim in the Labour Tribunal against the defendant for, inter alia, commissions under Clauses 2.2 and 7.2 of the relevant Employment Contract.

4.On 12 August 2015, the presiding officer awarded part of the commissions claimed (“Claimed Commission”) but dismissed the rest.

5.Subsequently, the claimant appealed against the award and succeeded before DHCJ Marlene Ng (the “Judge”) on 1 December 2016 (the “High Court Judgment”).

6.In the Notice of Originating Motion to Appeal filed in the first appeal, the claimant requested to remit the claim for the Claimed Commission to the Labour Tribunal for re-trial by another presiding officer.

7.The claim was then remitted to the Labour Tribunal before the PO.  The claimant applied to transfer the claim to the Court of First Instance on 27 April 2017.  This request was refused with the Reasons for Decision handed down on 8 June 2016 (the “Ruling”).

The Court’s Power on Appeal

8.Order 55 of the Rules of the High Court, Cap 4A applies to every appeal to the Court of First Instance from any tribunal subject to any provision made in relation to that appeal by any other enactment (Order 55, rules 1(1) and 1(4)).  Order 55, rule 7(5) provides that the court may “give any judgment or decision or make any order which ought to have been given or made by the … tribunal … and make such further or other order as the case may require or may remit the matter with the opinion of the Court for rehearing and determination by it or him” [emphasis added].

9.Further, pursuant to section 35(1) of the Labour Tribunal Ordinance, Cap 25, on appeal from the Labour Tribunal, the Court of First Instance has the power to “(a) allow the appeal; (b) dismiss the appeal; or (c) remit the matter to the tribunal with such directions as it thinks fit, which may include a direction to the tribunal for a new hearing”.

Legal Principles regarding Transfer of Cases from Labour Tribunal

10.Section 7(1) and (2) of the Labour Tribunal Ordinance provide that: –

“(1) The tribunal shall have jurisdiction to inquire into, hear and determine the claims specified in the Schedule.

(2) Save as is provided in this Ordinance, no claim within the jurisdiction of the tribunal shall be actionable in any court in Hong Kong.”

11.Section 10(1) and (2) give the Labour Tribunal discretion to decline jurisdiction and, if so declined, to transfer the claim to the Court of First Instance: –

“(1) The tribunal may, at any stage of proceedings, if it is of the opinion that for any reason the claim should not be heard and determined by it, decline jurisdiction.

(2) The tribunal may, when it declines jurisdiction under subsection (1), transfer the claim to the Court of First Instance, the District Court or the Small Claims Tribunal, in such manner as may be prescribed.”

12.The guiding principles concerning transfer of Labour Tribunal claims to the High Court are found in Panalpina (Hong Kong) Ltd v Ulrich Haldermann [1983] HKLR 275, where Hunter J (as he then was) held that if the case raised potentially difficult questions on the measure of damages and mitigation and cries out for legal representation in the interest of both parties, the Labour Tribunal should exercise its discretion to decline jurisdiction.

PO should have declined jurisdiction and transferred the claim to the Court of First Instance

13.DHCJ Marlene Ng in allowing the first appeal reasoned elaborately on the questions of interpretation of Clauses 2.2 and 7.2 of the Employment Contract, under which the claimant is entitled to commissions: –

(1)  even when he ceased employment;

(2)  when the sales were not directly done by him but were with clients “approached” by him, and

(3)  where some clients bought from the company not in their own names but in the names of their agents as a result of a “political” decision to avoid issues between existing and new suppliers.

14.The above effects of the Employment Contract led the Judge to allow the first appeal by reason of the refusal by the presiding officer to order discovery of documents from the defendant company, such as invoices from different customers in order to resolve the pertinent issue of whether these clients were agents of customers “approached” by the claimant according to the claimant’s case (paragraphs 48 to 64 of the High Court Judgment).

15.It seems that the above holdings, findings and analysis of DHCJ Marlene Ng were not fully appreciated by the PO (as apparent from the Ruling), resulting in the PO’s error in law in wrongly interpreting Clause 7.2 of the claimant’s Employment Contract at paragraph 18 of the Ruling.  It further led to the wrong conclusion of the PO (at the same paragraph of the Ruling) that there is in this case no need for complicated legal argument.

16.I further agree that the PO was also wrong to have reasoned somewhat superficially that the rules about discovery of documents were easy to understand and that there was no complexity in the case.  In paragraph 16 of the Ruling, the PO said he had explained the process of discovery to the parties and he was “of the view that the principle was not so hard to absorb”.  I agree that briefly outlining the process of discovery is not difficult.  The difficulty lies in applying the rules of discovery to the actual claim regarding (a) the scope of discovery; (b) evidence to be adduced in support of the application for discovery; and (c) presentation of submissions on relevance and how the documents are connected with and would help to prove the claim. 

17.I agree with the claimant that this case cries out loud for the need of full and extensive discovery, without which customers’ use of intermediaries to conduct business with the defendant cannot be proved.  Indeed, at the first trial when the Labour Tribunal wrongly dismissed some of the claim for commissions, the claimant was criticised as being speculative and unable to produce evidence to substantiate his claim, when all the relevant documents of sales were in the possession of the defendant and not disclosed. 

18.Further still, I agree that the PO had gone further to rely on faulty and irrelevant considerations to refuse the application for transfer, namely: –

(1)  that no difficult legal principles are involved in this case because the claimant did not raise any legal arguments at the first trial (paragraph 19 of the Ruling); and

(2)  that the claimant can engage a lawyer to sit beside him for assistance at the Labour Tribunal trial (paragraph 21 of the Ruling).

19.The PO should have been aware from the High Court Judgment that a layman cannot be expected to present the sort of legal arguments as advanced to the court and reflected in the High Court Judgment.  The claimant was handicapped in the first trial in that respect.  To reason that since there were no complex legal arguments put forward by the claimant at the first trial and hence reject the transfer application is a circular and wrong reasoning.

20.As to the suggestion that a lawyer can be engaged to sit beside the claimant to assist in the course of trial (though the lawyer would not have the right of audience), I agree that this is simply wrong and unworkable.  The spirit of the Labour Tribunal Ordinance and proceedings thereunder are to facilitate speedy trial and simple process and to save the costs of legal representation in suitable cases. However, if the nature and complexity of the claim justifies legal representation, the only solution is to have a transfer.  The suggestion by the PO is worse than having no legal representation, as one having incurred legal costs cannot recover them from the other party.  

Conclusion

21.For the reasons stated above, I am of the view that the PO’s decision to refuse to decline jurisdiction and transfer the claimant’s claim to the Court of First instance under section 10 of the Labour Tribunal Ordinance was plainly wrong, and the appeal should be allowed.

22.Accordingly, I order as follows: –

(1)  The Order of the PO dated 27 April 2017, whereby it was ordered that the claimant’s application for transfer of the case to the Court of First Instance of the High Court be refused with no order as to costs, be set aside.

(2)  The claimant’s claim be transferred to the Court of First Instance of the High Court.

23.Further, I order that the defendant do pay the claimant the costs of and occasioned by this appeal, to be taxed if not agreed.

24.The above order as to costs is nisi and shall become absolute in the absence of any application within 14 days to vary the same.

25.The claimant’s own costs be taxed in accordance with the Legal Aid Regulations.

26.Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.

Mr Erik Shum, instructed by Messrs Norman M.K. Yeung & Co, for the claimant/appellant

Mr Kevin Li, instructed by Messrs Y.L. Yeung & Co, for the defendant/respondent