Leung Woon Ming v. Full Flush Holdings Ltd and Another
Read the full judgment text of HCA 491/2012 on BabelCite. This High Court CFI judgment was delivered on 10 December 2018.
1. Leung Woon Ming (“Leung”) claims against his former employer, Full Flush Holdings Limited (“Full Flush”), for various employment entitlements accrued upon the termination of his employment in March 2012. He also claims against Full Flush and its sole shareholder and director, Cheung Shing Kiu Herbert (“Cheung”), for the repayment of various financial assistance arranged andextended by him to the company during his employment. Full Flush and Cheung deny liability and put upvarious allegations
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HCA 491/2012 and [2018] HKCFI 2703 HCA 491/2012 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 491 OF 2012 _____________
ACTION NO 1040 OF 2014 ________________________
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ACTION NO 320 OF 2015 ________________________
________________________ JUDGMENT ________________________ 1.Leung Woon Ming (“Leung”) claims against his former employer, Full Flush Holdings Limited (“Full Flush”), for various employment entitlements accrued upon the termination of his employment in March 2012. He also claims against Full Flush and its sole shareholder and director, Cheung Shing Kiu Herbert (“Cheung”), for the repayment of various financial assistance arranged andextended by him to the company during his employment. Full Flush and Cheung deny liability and put upvarious allegations against Leung and another former employee of Full Flush, Chan Yin Kuen Elsa (“Elsa”), for, amongst other things, conspiracy and misappropriation of company funds. Upon that, Elsa also lodged her claimagainst Full Flush for her employment entitlements accrued upon the termination of her employment in August 2012 as well as repayment of her personal loans extended to Full Flush and Cheung during her employment. The claims lodged in the Labour Tribunal have since been transferred and the parties’ respective actions consolidated. ABSENCE OF FULL FLUSH AND CHEUNG 2.Full Flush and Cheung used to be legally represented, and they appeared by counsel during the last pre-trial review. No doubt Full Flush and Cheung had notice of the trial. This was reinforced by the written attempts on behalf of Leung and Elsa in June 2018 to liaise with FullFlush and Cheung with respect to the compliance with the directions of the court given during the pre-trial review hearing. However, no response has been received from Full Flush or Cheung. 3.There was no record of Full Flush having sought leave to appear by its director pursuant to O.5, r.6 of the Rules of the High Court. Cheung filed his notice to act in person in March 2018, however attempt to contact Cheung at the telephone number provided in thenotice was in vain. Both Full Flush and Cheung were absent from the trial. 4.I saw no reason why Leung and Elsa should be prevented from proceeding to prove their respective claims. I allowed them to proceed pursuant to O.35, r.1(2). 5.Leung and Elsa gave evidence. Elsa also called a former colleague at Full Flush, Ms Ngan Wing Fai (“Ngan”), as her witness. Thewitnesses adopted their statements as evidence. 6.Pursuant to the directionsof the court, the parties have produced forensic accountant expert reports by Mr Harry Lee (for Leung and Elsa) and Mr John Lees (for Full Flush and Cheung). The experts, after joint meeting, also produced their joint statement and an amendedjoint statement dated 14 September 2016 and 2 November 2016 respectively. Mr Harry Lee (“Lee”) attended the trial, and confirmed and adopted his findings and opinion as per his report and his part of the two joint expert statements. 7.On the basis of the parties’ pleaded cases, Mr Chiu, appearing for Leung, has prepared a list of issues. However, as neither Full Flush nor Cheung appeared, their evidence, expert evidence included, were not formally adduced in the trial and must be disregarded pursuant to O.38, r.2A(6). It follows that the issues arising out of their contentions in defence of the claim by Leung and Elsa or their claim against Leung and Elsa are never substantiated. 8.In the circumstances, it remains for Leung and Elsa to prove their claims, so far as the burden of proof lies on them. Once such burden is discharged, they should be entitled to such relief as claimed and such other relief as is consistent therewith: see Deng Minghui t/a Tianye Industrial (Hong Kong) Co v Chau Shuk Ling Elaine HCA 749/2005 (30 September 2010) at §§9 – 10; Hong Kong Civil Procedure 2018 Vol 1 at §35/1/1. BACKGROUND 9.The evidence of Leung and Elsa contained, amongst other things, an account of the following background. 10.Leung was an accountant by profession. He was introduced by a friend to Cheung in or about early 2007. Soon, Leung was invited by Cheung to assist in the restructuring of the business of Cheung’s father (“Cheung Senior”) with a view to incorporating his own plastic trading business in Hong Kong and the Mainland. At all material times, Cheung was the sole shareholder and director of Full Flush, and was in control of a number of other related business entities here and in the Mainland. 11.Subsequently Cheung invited Leung to join Full Flush, which Leung did. Pursuant to his written employment contract dated 1 November 2007 (“the Leung Employment Contract”), Leung became theChief Financial Officer of Full Flush. In fact, his actual responsibilities eventually went beyond accounting and finance, and included, amongst other things, procuring raw materials and liaising with suppliers. 12.Elsa was a trusted former employee of Cheung Senior. She had worked for Cheung Senior for 23 years, originally as an account clerk and eventually promoted to the position of finance manager responsible for overseeing the account teams both in Hong Kong and the Mainland plants of Cheung Senior’s business. She resigned in 2004[1]. She had then worked for another company until 2007. In or about late 2007, Cheung invited Elsa join Full Flush. Notwithstanding her thought about early retirement then, Elsa accepted the invitation. 13.Pursuant to a written employment contract dated 2 January 2008 (“the Elsa Employment Contract”), Elsa became the accounting manager of Full Flush. Elsa and her colleague in Hong Kong were responsible for managing the account of Full Flush but not that of its Mainland related entities. Cheung frequently travelled on business in the Mainland, and he and Elsa mainly communicated on the telephone or by email with few face-to-face meetings. Elsa would report to Leung when Cheung was not in Hong Kong. 14.Both Leung and Elsa explained how the finance of the company was managed on a daily basis. For instance, Cheung would prepare some pre-signed cheques[2] to enable payments or reimbursements from time to time. Cheung would also enable Leung to transfer money online from Cheung’s bank account to his current account for footing the amounts of the cheques. For immediate expenses, Leung would normally pay and provide the receipts to Elsa for record and reimbursement. Leung considered that there was check and balance in the financial management of the company. Sometimes Cheung would also request Elsa to make use of her personal bank account to facilitate the transfer of money, for instance to avoid the delay necessitated by the clearance of cheques for payment in case of urgent need. 15.Both Leung and Elsa testified that Full Flush had not been in good shape financially due to its low incoming cash flow, and the companywas often short of liquidity. At times, Cheung would instruct Elsa to arrange injection of his salary received back into the company for the latter’s liquidity. Both Leung and Elsa had also extended financial assistance to the company to meet the pressing needs from time to time. In the case of Leung, he was prepared to do so, as he felt confident about the prospect of the company’s business opportunities and believed that at the end Cheung Senior would assist if necessary. In the case of Elsa, this had much to do with her sentiment from the past decades of good working relationship with Cheung Senior. 16.As mentioned, Leung’s financial assistance to Full Flush largely took the form of defraying expenses on its behalf and seeking reimbursement from the company when funds became available. For instance, Leung defrayed the expenses for the setting up and decoration of the company office in October 2007, and he was reimbursed for that in2008. Leung reckoned that the reimbursements were arranged with approval obtained by Elsa from Cheung. 17.However, the financial situation of Full Flush deteriorated in or about July 2010 so that arrangement was made for Leung to obtain in his own name loans in the sums of HK$1,000,000 and HK$500,000 from UA Finance and Hang Seng respectively, and then to on-lend the same to Full Flush (the so-called “On-lent Loans” and “On-lent Loan Agreement”). That entailed liability on the part of Leung to repay by instalments inclusive of interest[3] to UA Finance and Heng Sang respectively. Full Flush and Cheung guaranteed to put him in funds to meet such liability. 18.As Elsa noticed, during the half a year before Leung left the company, the relationship between Cheung and Leung somehow deteriorated. There were occasions when Cheung would choose to meet Elsa outside office as if he was trying to avoid Leung. Elsa observed that Leung was no longer the second in command of the company by then. She was also instructed to collect from Leung the company’s cheque books mentioned above. 19.In addition to his employment entitlements in arrears, Leung also complains that in breach of the On-Lent Loan Agreement, Full Flush has failed to make any monthly repayments to Leung since October 2011. Nor has Cheung honoured his personal guarantee in making good the repayment commitment. Just about when Leung resorted to legal action, Full Flush also terminated Leung’s employment on or about 28 March 2012 on the ground of alleged misconduct. 20.Leung now seeks to recover:
21.In respect of the On-Lent Loans, Leung seeks to recover:
22.Leung also seeks to recover the outstanding amount arising from his other financial assistance to Full Flush. 23.Elsa also testified in respect of the financial difficulties of Full Flush over the years before she resigned at the end of July 2012. The company was always short of cash. Trade creditors were pressing for payments. Expenses became overdue. Salaries were left unpaid. Often bank overdrafts did not suffice to pay off all the expenses and salaries. Ngan stated that the late payment of staff salaries and demand for unpaid rent by the company’s landlord were matters of common knowledge in the office. 24.According to Elsa, when the staff members were owed salaries but the available cash was insufficient to pay them all, she reckoned that someone had got to suffer. She was always willing to yield in order to accommodate the other staff members. Her own salaries from April 2011 had been let into arrears, and by the time he resigned in July 2012, she was owed salaries for six months in total. 25.After the dismissal of Leung, Cheung had initially appeared in the Hong Kong office more often than before. However, since about mid-June 2012, Cheung did not return to the office. Nor did he answer Elsa’s call or respond to her email. Cheung became totally out of reach by Elsa and other staff of Full Flush. It became impossible for Elsa to singlehandedly cope with the company’s situation. Staff started to leave the company. Ngan expressed her understanding that it must be difficult for Elsa to continue to work for Full Flush like that. Eventually Elsa felt she had to leave, and she resigned by notice with effect from 1 August 2012. As she could not tender her written resignation to Cheung personally, she entrusted Ngan with her letter of resignation for passing on to Cheung. 26.Like Leung, during the years of her employment with Full Flush, Elsa had provided financial assistance to Full Flush from time to time to cope with the company’s liquidity problem. Those were the occasions when Full Flush was hard pressed for cash to meet its liabilities to creditors. Leung had also on behalf of Full Flush requested Elsa to help by advancing money to Full Flush to deal with the situation. As such, during the period between mid-December 2009 and late May 2011, Elsa had lent to Full Flush from time to time. Cheung would also borrow from Elsa for his personal purposes, including settlement of his credit card balance. 27.Elsa made the point that notwithstanding the above, she wouldnot have brought herself to pursue her claim against Cheung, had it not been the allegations in respect her wrongdoings and the claims directed at her by Full Flush and Cheung. 28.Now Elsa now seeks to recover her salaries in arrears upon the termination of her employment. She also contends that the circumstancesprevailing at the time of her departure from the company were such that shewas constructively dismissed by Full Flush without notice. In the premises, Elsa also claims for payment in lieu of notice of termination, outstanding year-end double pay and unused annual leave. 29.Elsa also claims against Full Flush and Cheung for the outstanding balances of her loans to them. LEUNG’S CLAIM Unpaid salaries 30.Leung claims on the basis of his monthly salary of $124,000[4]. As pleaded, Leung seeks to recover his unpaid salaries for 10 months in 2011 and 2012 as well as those for the period between 1 to 28 March 2012. He gave evidence to the effect that he has not been paid salaries from March to September 2011 and December 2011 to February 2012. 31.However, Lee managed to identify 6 salary payments in the year 2011, including one for the salary accrued for December 2010. In other words, salaries for 2011 that had been paid amounted to 5 months, leaving 7 months’ salaries for that year unpaid. No entry of any salary payment in 2012 was found. 32.Through counsel, Leung conceded and accepted his expert’s findings and now seeks to recover unpaid salaries for 7 months in 2011. The total amount would be HK$1,228,000:
Payment in lieu of notice 33.Sections7(1A) and 8A(1) of the Employment Ordinance (“EO”) provide for the termination of a contract of employment by notice or payment in lieu. 34.Clause 9 of the Leung Employment Contract provided that the contract might be terminated by 3 months’ notice or payment in lieu. However, Full Flush alleges that Leung was guilty of gross misconduct and was liable to termination of employment summarily without notice pursuant to section 9 of the EO. 35.Full Flush did not appear at the trial to substantiate the allegations. In the circumstances, none of those contended by Full Flush was established to deny Leung’s statutory and contractual entitlement to payment in lieu of notice in the sum of HK$375,000 as claimed. Unused annual leave 36.Clause 11 of the Leung Employment Contract provided that Leung would be entitled to 14 days of paid annual leave in accordance with the EO. As at the termination of his employment on 28 March 2012, the unused annual leave entitlement of Mr Leung was 8.375 days. 37.Sections 41C and 41D of the EO provide for the calculation and payment of annual leave pay on cessation of employment. Absent substantiated contrary contention, Leung’s entitlement would be HK$ (1,500,000 ÷ 366 × 8.375) = HK$34,323.77 as claimed. Severance payment 38.Section 31B(1) of the EO provides that an employee who has been employed for not less 24 months under a continuous contract shall be entitled to severance payment where he is dismissed by reason of redundancy or laid off. Section 31B(2) sets out the circumstances where an employee shall be taken to have been dismissed for redundancy. 39.Leung did not actually testify to the circumstances surroundingthe termination of his employment in terms of those defined under section 31B(2). However, he sought to rely on section 31Q, which provides that for the purpose of this part of the EO, an employee who has been dismissed by his employer shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy. No doubt the employer bears the burden of rebutting the presumption: see Employment Law and Practice in Hong Kong (2nd ed) at §7.104. The rationale is to facilitate the employee’s claim. In line with the rationale, I see no reason why Leung may not take advantage of the statutory presumption, when Full Flush did not appear to rebut the same. 40.Section 31N(c) of the EO provides that an employee shall not be entitled to a severance payment unless before the end of the period of 3 months beginning with the relevant date, a claim for such has been filed with the Labour Tribunal. Leung was dismissed on 28 March 2012, and hefiled such claim in the Labour Tribunal on 18 May 2012 and thus within time. 41.According to section 31G(1)(a) of the EO, the amount of severance payment shall be calculated by allowing ⅔ of the last full month’swages of the employee or HK$22,500, whichever is less for every year (orpro rata as respects an incomplete year) of employment under a continuous contract by his employer subject to the statutory maximum payment. In the present case, the amount will be HK$22,500 × ⅔ × (4 + 149⁄366) = HK$66,106.55. Year-end double pay for 2011 42.The Leung Employment Contract was silent on year-end doublepay. According to Leung, it was actually he who asked Cheung for it in or about January 2010. He sought to justify to Cheung at the time that the other staff members (including Elsa) were contractually entitled to year-end double pay whereas he was not, notwithstanding the fact that his actual duties far exceeded those he was first employed for, namely, account and finance. According to him, Cheung accepted and agreed that Full Flush would remunerate Leung with year-end double pay with retrospective effectfrom year 2008.Leung had since received such payment for 2008, 2009 and 2010. 43.There was no evidence to the contrary in respect of Leung’s entitlement to such pay for 2011. Reimbursement of expenses 44.According to the pleading, Leung claims six categories of expenses incurred during the period between late July 2011 and January 2012 for which he is yet to be reimbursed:
45.Clause 17 of the Leung Employment Contract provided that Leung might be sent to the Mainland factory on duty, and in which case the incidental expenses as well as the cost of accommodation and insurance would be reimbursed. Whilst the expenses claimed might not all fall exactly within the ambit of clause 17, the fact, according to Leung, was that similar expenses had been incurred and reimbursed previously. The outstanding expenses are supported by documents, namely, his expense claim records. 46.As a matter of pleading, Full Flush did not actually deny its liability to reimburse Leung in respect of his expenses that were reasonable in connection with the company’s business. There was no evidence contradicting Leung’s evidence as to the existence or reasonableness of the expenses being claimed, and thus his entitlement. Salaries tax reimbursement 47.According to Leung, due to his personal advances to Full Flush to maintain its operation needs by late 2010, his liquidity became insufficient for meeting his own income tax liability under the demand note dated 11 August 2010. In or about November 2010, Cheung on behalf of Full Flush agreed to shoulder up the burden. 48.Again, there was no evidence to the contrary in respect of the existence or enforceability of such oral agreement. I also accept that it was within the contemplation of the parties then that late payment of Leung’s salary tax would entail surcharge so that Leung should be entitled to the amount as per the demand note together with the 5% surcharge imposed for late payment, hence the total tax liability of HK$316,645. On-Lent Loans 49.The background for the arrangement for Leung to take out personal loans from finance companies and to on-lend the same to Full Flush mentioned above refers. Full Flush actually passed two board resolutions on 16 July 2010 and 13 August 2010 respectively to authorise such arrangement. The board resolution in respect of UA Finance was in the following terms:
50.As to board resolution in respect of the HK$500,000 loan advanced by Hang Seng, the general obligations undertaken by Full Flush and Cheung to put Leung in finds to meet the repayment instalments were worded in terms identical to the above. 51.The total amount of these loans ($1,500,000 minus $1,000 bank charges) had been injected into Full Flush on divers dates:
52.Full Flush put forward a defence on the ground that the funds were not injected into the company in one go. Leung was therefore in breach, and the company was not liable to repay him. 53.As far as the above board resolutions revealed, there was no such condition as contended by Full Flush. The bottom line is that the sums advanced (minus bank charges) had in fact been put into Full Flush. Lee also identified that in his expert evidence. There is no equitable basis for denying Leung’s entitlement to their repayment by Full Flush whilst it had received and had the use of such money as a matter of fact. 54.Mr Chiu reckoned that upon the termination of his employment, his client should have acted reasonably by repaying the financial institutionsthe remaining balance of the loans in lump sums instead of maintaining therepayment by monthly instalments that were burdened with interest. Hence his seeking to recover:
55.For (1) above, Lee in his report and the joint statement explained his finding that a sum of HK$662,231.70 had been paid by Full Flush to Leung as repayments in relation to the On-Lent Loans, and the last repayment was made on 16 September 2011. No further payment in this respect was found. The monthly repayments made by Leung to Hang Seng and UA Finance from October 2011 to March 2012 amounted to HK$50,940.90 × 6 = HK$305,645.40. 56.For (2) above, the outstanding principal amount due to UA Finance was HK$557,918 and to Hang Seng was HK$236,111.09 as at 28 March 2012. 57.In the premises, Leung is entitled to recover from Full Flush HK$ (305,645.40 + 557,918 + 236,111.09) = HK$1,099,674.49. 58.The board resolution contained or evidenced Cheung’s guarantee in respect of the repayment of the On‑Lent Loans. There it was provided that the company and Cheung, as the director, personally agreed to be responsible for all the interest and costs to be incurred. Cheung agreed to provide his personal guarantee until the full settlement of the loan. Mr Chiu for Leung submitted that in the circumstances, the liability of Cheung was not really secondary, and the parties intended that Leung could recover the full extent of his liability for the instalment repayments from either Full Flush or Cheung. In other words, their liabilities to reimburse Leung in respect of those instalment repayments were and still are joint and several. 59.I accept the above submission. The further fact is that Full Flush, as the principal debtor, has defaulted both prior to and after the termination of Leung’s employment for years by now. In the circumstances, I find that both Full Flush and Cheung are liable to Leung in respect of the sum of HK$1,099,674.49. Personal loans by Leung 60.Accounting expert evidence would have been the most relevant to the resolution of the dispute in respect of this item of claim. The relevant transactions between Leung and Full Flush as well as its related entities at the relevant time were reviewed and accounting records cross-checked against and reconciled with bank documentation. The suggestion by Full Flush and Cheung that Leung dictated or manipulated the accounting records, as in the case of other contentions, was not substantiated and was in any event contradicted by Leung’s uncontested evidence[5]. If the evidence of the expert engaged by Full Flush were to be considered at all, it would transpire that the experts of both sides actually managed to reach agreement in respect of most but 9 items of the transactions under this head[6]. 61.Mr Chiu submitted that the methodology of Lee as per his report rendered it an accurate and reliable source of evidence for determining the nature of the relevant financial transactions between Full Flush and Leung. He asked me to accept the amount identified to be owing by Full Flush to Leung, namely, HK$962,421, to be the bottom line of what his client managed to prove. I accept that. Summary 62.On the basis of the evidence and submissions put forward on his behalf, including those specifically mentioned in the above discussion, Leung has proved his entitlement to the follows:
ELSA’S CLAIM Unpaid salaries 63.Elsa’s monthly salary at Full Flush was HK$38,000. Clause 5 of the Elsa Employment Contract provided that she was entitled to year-end pay of an extra month’s salary. Clause 9 provided that the employment might be terminated by 3 months’ notice or payment in lieu. Clause 10 provided for her entitlement to statutory holiday, and clause 11 provided for her entitlement to 14 days of statutory annual leave. 64.Elsa resigned after having worked at Full Flush for 4 years and 7 months. 65.In her evidence, Elsa explained how her salaries had been let into arrears with reference to her bank passbook. For instances, the salary for March 2011, which should have been paid by 5 April, was not paid until 29 April 2011. The following salary payment was not made until 16 September 2011. As such, Full Flush effectively owed her 6 months’ salaries by July 2012. Hence the formulation of her claim in the Labour Tribunal. The amount in arrears was HK$ (38,000 × 6) = HK$228,000. Constructive dismissal 66.Elsa contends that whilst she resigned, the circumstances surrounding her resignation constituted constructive dismissal. 67.Section 10A of the EO [7]provides that:
68.On the basis of her evidence as well as the evidence of Ngan and Leung in respect of the financial situation of Full Flush prevailing then, I find the contention in respect of constructive dismissal of Elsa by Full Flush, notwithstanding her apparent resignation, to be justified as a matter of fact. Salaries in lieu of notice 69.Full Flush is liable to Elsa for 3 months’ salaries in lieu of notice in the sum of HK$ (38,000 × 3) = HK$114,000. Year-end double pay 70.Section 11AA(1) provides that:
71.Section 11B provides that:
72.There was nothing to defeat Elsa’s entitlement to the year‑end double pay for 2011 in the sum of HK$38,000 and for 2012 in the pro rata sum of HK$ (38,000 × 7⁄12 ) in the sum of HK$22,167. Unused annual leave 73.The same is true in respect of Elsa’s claim for 23 days of unused annual leave in the sum of HK$ (38,000 × 23⁄31) = HK$28,193. Loans to Full Flush 74.According to Elsa, during the period between 16 December 2009 and 23 May 2011, she had on 11 occasions advanced money to Full Flush. Full Flush had repaid Elsa on 7 occasions:
75.Elsa now claims the sum of HK$255,000.00 being the above outstanding balance of the loans repayable by Full Flush. 76.Elsa explained in her evidence how she managed to provide such financial assistance to Full Flush (and Cheung) in those times of need. I accept such evidence as uncontested. I also find that her readiness to do so at the time was consistent with herreason and approach of deferring her own interest as an unpaid employee to those of the company and colleagues. 77.Elsa was able to correlate the loans with the relevant withdrawals from her bank account and the deposits into Full Flush’s bank account. Except for the last repayment and loan dated 19 and 23 May 2011 respectively made in cash in the sum of $30,000 each, all the loans and repayments were traceable with reference to documents[8]. The accounting expert came up with similar findings and therefore verification of the amounts. The allegations and queries raised by Full Flush in this respect were not substantiated. Loans to Cheung 78.According to Elsa, Cheung for the first time borrowed from her in 2009. Since then, and during the period between 2010 and 2011, Cheung had borrowed from Elsa on another 7 occasions and Elsa arranged transfers of money according to his requests:
79.Cheung had repaid Elsa on 5 occasions:
80.Elsa specifically explained the loan extended on 26 November 2009 (above). According to her, Cheung requested on the telephone on that day to issue a cheque drawn on her personal bank account in the sum of HK$280,000 in favour of Cheung’s brother after Cheung had transferred to her account a sum of HK$80,000. She did so. Hence the set-off between the amount of HK$80,000 paid by her by cheque by the amount received from Cheung on that day. The net loan by her on that day remained HK$200,000, though the cheque was for HK$280,000. 81.The above figures are supported by Elsa’s evidence[11] the Lee’s findings as set out in his report. 82.The outstanding balance of the loans repayment by Cheung to Elsa would be HK$317,996. Summary 83.In summary, Elsa has proved her entitlement to the follows:
84.Elsa is entitled as against Full Flush to the sum of HK$255,000 being the outstanding balance of her loans, and as against Cheung to the sum of HK$317,996. Interest 85.Mr Chiu made submissions with respect to the statutory interest applicable to the employment claims under the EO. 86.Section 23 provides that wages shall become due on the expiry of the last day of the wage period and shall be paid in any event not later than 7 days thereafter. Section 25 provides that where the employment is terminated, the various sums due to the employee shall be paid to the employee as soon as practicable and in any event not later than 7 days after the termination. The exception is section 31O, which specifies the severance payment is payable upon determination of such claim. 87.As to the interest rate, section 25A provides that wages due that are not paid within time under section 25 attract interest effectively at the judgment rate (of the District Court, to be precise[12]) from the due date. As to items of the employment claims other than wages, Mr Chiu asks for interest at the pre-judgment rate from, as mentioned, the expiry of 7 days after termination of the employment[13]. 88.Neither Leung nor Elsa has specifically pleaded claim for the above statutory interest after the employment claims have become part of these consolidated actions: see Hong Kong Civil Procedure 2018 (Vol 1) at §6/L/4. Having said that, the court is not barred at all from taking into account the above provisions in its discretion as to interest to be exercised pursuant to sections 48 and 49 of the High Court Ordinance, which the parties do rely on. I also bear in mind the nature of the employment claims and it would have been the statutory interest that Leung and Elsa should be entitled to, had those claims been tried in the Labour Tribunal. The rate of interest, both pre-judgment and post-judgment, would not have exceeded the judgment rate in any event. 89.I am prepared to allow interest effectively as submitted by Mr Chiu with equal treatment to the claim of Elsa. As to their claims in respect of financial assistances to Full Flush and Cheung, interest runs at 1% above HSBC best lending rate from the date of filing of claims in these actions until judgment and thereafter at the judgment rate until full payment. CONCLUSION AND ORDER 90.There will be judgment in favour of Leung against Full Flushfor the total sum under §62(1) to (7) and (9) above; and against Full Flush and Cheung, jointly and severally, for the sum under §62(8) above. 91.There will judgment in favour of Elsa against Full Flush for the total sum under §83(1) to (4) above as well as against Full Flush and Cheung respectively for the sums under §84 above. 92.Interest is awarded as mentioned in §89 above. 93.All the claims by Full Flush and Cheung against Leung and Elsa are dismissed. 94.Leung and Elsa shall have their respective costs of and in thisaction, including any costs reserved, against Full Flush and Cheung. Costs shall be taxed, if not agreed. This costs order will become absolute in the absence of application in 14 days for variation.
Mr Vincent Chiu, instructed by Au Yeung Lo & Chung, for the plaintiff (in HCA 491/2012 and HCA 1040/2014 (by original action)) and the 1st defendant (in HCA 1040/2014 (by counterclaim)) Mr Louis Karon Fung, instructed by Yu & Associates, for the 2nd defendant (in HCA 1040/2014 (by counterclaim)) and the plaintiff (in HCA 320/2015) The 1st defendant (in HCA 491/2012) and the defendant (in HCA 1040/2014 (by original action) and HCA 320/2015) and the 1st plaintiff (in HCA 1040/2014 (by counterclaim)) was not represented and did not appear The 2nd defendant (in HCA 491/2012) and the 2nd plaintiff (in HCA 1040/2014 (by counterclaim)) was not represented and did not appear [1] The testimonial issued on such occasion described Elsa as a hardworking, reliable and honest employee. [2] Elsa was adamant that they consisted of those of Bank of China and HSBC only. [3] HK$36,152 and HK$14,788 payable monthly to UA Finance and Heng Sang respectively. [4] Giving credit to HK$1,000 being the applicable rate of MPF at the time. [5] Leung’s witness statement at §11; Leung’s supplemental witness statement at §8; Leung’s 2nd supplemental witness statement at §16. [6] Section 3.0 of the joint statement. On the basis of the disagreement, which would have called for explanation, Leung’s evidence in this respect was summarised in Schedule B to Mr Chiu’s written closing submissions, which, in the absence of appearance and evidence from Full Flush or Cheung to the contrary, I do not find it necessary to set out here. [7] Mr Fung referred to Re Phoon Lee Piling Co Ltd [2003] 2 HKLRD 391 (HCCW 564/2002) at §9; Ng Chung Man v Rever Expression Salon Ltd [2005] 2 HKLRD 193 (DCCJ 600/2004) at §§36 and 37 as instances of the application of the deeming provisions. [8] References set out in Section A of Mr Fung’s supplemental opening submissions. [9] Cheung Shing Chung. [10] Cheung Po Hok. [11] References set out in Section B of Mr Fung’s supplemental opening submission. [12] Section 50 of the District Court Ordinance, Cap 336. [13] Which are also summarized in Schedule A to his closing submissions. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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