Dumayag, Analyn Pedro v. Leung Mei Ling and Another

HCLA 23/2016

[2020] HKCFI 276

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 23 OF 2016

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 173 OF 2016)

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DECISION

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1.The claimant has made 3 applications:

(1)     application for leave to appeal on point of law filed on 27 August 2016 (“the Leave Application”);

(2)     application for leave to amend the Leave Application made in the claimant’s solicitors’ letter dated 9 October 2019[1] (“the Amendment Application); and

(3)     application made by the applicant’s summons dated 13 November 2019 for an order to restore the Leave Application (“the Restoring Application”).

2.On 24 December 2019, I directed that all the 3 applications would be dealt with on paper.  Subsequently, pursuant to my directions, Mr Kay KW Chan, counsel for the claimant, has provided me his written submissions dated 13 January 2020 to the court on 17 January 2020.  I am grateful for the assistance rendered by counsel to the court.

BACKGROUND

3.I would first set out the background of this case.

4.The claimant commenced proceedings against Madam Leung Mei Ling (“Leung”) and the personal representative of the estate of Madam Chow Siu Kam Mary (“Chow”) by filing her Form of Claim (Form 2) dated 18 January 2016 in the Labour Tribunal.  The claimant claimed for statutory and contractual entitlements upon her constructive dismissal for arrears of wages, annual leave payment, wages in lieu of notice, severance payment, the costs of air-tickets; food & travelling allowance for going back to her country and travelling expenses, totalling HK$202,929.55.

5.The claimant’s case before the tribunal was as follows:

(1)     She was a domestic helper in Leung’s home from 23 March 2003 to 2 December 2015.

(2)     There were 5 consecutive written employment contracts. Leung submitted the first 4 employment contract to the Immigration Department (“ImmD”) for approval, where approval was granted:

	Contract number	Contractual period	ImmD’s approval
1	D790999	23/3/2003 – 22/03/2005	Obtained
2	E623275	23/3/2005 – 22/03/2007	Obtained
3	E901110	23/3/2007 – 22/03/2009	Obtained
4	G715385 (“4th Employment Contract”)	23/3/2009 – 22/03/2011	Obtained, but not obtained after 2nd  December 2009
5	H479131 (“5th Employment Contract’)	It is stated to be “for a period of two years commencing on the date on which the Helper arrives in Hong Kong” (Clause 2 of the 5th Employment Contract)	Not obtained

(3)     The “employer” of the claimant was stated to be Chow in the first 4 employment contracts and Leung in the 5^th Employment Contract.

(4)     The claimant’s work duties under all the employment contracts were stated to entail serving 3 adults and 2 minors (aged between 5 – 18 years) in the address which was later found to be the address of Leung.  Chow did not live in the address provided in any of the employment contracts, neither was she part of Leung’s household.

(5)     The claimant argued in the tribunal that she was in a de facto employment relationship with Leung, and Leung was the de facto employer and the claimant was Leung’s de facto employee since 23^rd  March 2003.  From 23  March 2003 to 2 December 2015, the claimant was in continuous employment with Leung.  Leung owed the sums claimed by the claimant, which were the claimants’ contractual entitlements.

(6)     Chow passed away on 2 December 2009, in the middle of the 4^th  Employment Contract. Leung deceived the claimant into believing that the ImmD would take no issue with it, and the employment relationship between Leung and the claimant would continue as usual.

(7)     When the 4^th Employment Contract was due to expire in March 2011, D1 asked for the claimant’s passport and to sign the 5^th  Employment Contract. D1 has since retained the claimant’s passport. As a result, the claimant obtained a new passport from the Philippines Consulate in July 2018.

(8)     The claimant treated herself as constructively dismissed and left Leung’s home on 2 December 2015 when Leung behaved in the following manners that amounted to significant breach of contract of employment:

(a)     Leung failed to (and/or refused to) reply the claimant about the process of obtaining approval from ImmD;

(b)     Leung failed to (and/or refused to) obtain approval from ImmD for the 5^th Employment Contract; and

(c)     Leung failed to (and/or refused to) pay the claimant wages owed to her.

6.The case was heard ex parte by Deputy Presiding Officer Ms Jocelyn Leung on 18 August 2016.  At the end of the hearing, the tribunal dismissed the claimant’s claim.  On 23 September 2016, written reasons for decision (“Reasons for Decision”) were handed down.  The tribunal has made the following findings:

(1)     The tribunal doubted the evidence given by the claimant and found that she was not able to establish her case on the balance of probabilities[2].

(2)     In respect of the contention that Leung was the claimant’s de facto employer since 23 March 2003 (“the First Contention”), the tribunal doubted whether Chow only had a limited involvement in the claimant’s employment as alleged, and the tribunal also found the claimant’s evidence relating to this contention as unreasonable.  The tribunal rejected the claimants’ evidence[3].

(3)     The claimant made a second contention (“the Second Contention”) in the hearing before the tribunal: After Chow passed away on 2 December 2009, the claimant was under the employment of Leung with implied terms under the Employment Ordinance and the standard contract concerning foreign domestic helpers, and the implied contract was enforceable even without the approval given by ImmD.  As to this, the tribunal regarded the evidence given by the claimant as unsatisfactory and did not accept her evidence.  The tribunal found that the claimant had all along known that her work with Leung was not approved by ImmD[4]. The tribunal found that there was no force or coercion applied by Leung to make the claimant work for her[5].  The tribunal also found that both the claimant and Leung were equally reprehensible in failing to obtain the ImmD’s approval, and the claimant’s employment with Leung was clearly illegal and the contract between them was not enforceable[6].

7.As a result of the conclusion reached, the tribunal has referred the case to ImmD for investigation[7].

8.On 27 August 2016, the claimant lodged 2 Forms 14, one was dated 26 August 2016 and the other was dated 27 August 2016. As to why there are 2 Forms 14 filed by the claimant, counsel submits that it is unclear what happened because the claimant was not legally represented at the time. Counsel requests that the 2 Forms 14 be treated as the Leave Application made by the claimant on 27 August 2016. I would proceed on this basis.

9.Counsel has told me that the original leave application was stayed due to the legal aid application made by the claimant at that time.  Legal aid was granted to the claimant on 14 December 2017 and solicitors were retained on the same date.  However, counsel was only engaged on 23 January 2019.

10.In or around July 2019, the claimant’s solicitors tried to make an application for leave to amend the Leave Application but were informed that they might not do so by the Registry.  On 9 October 2019, the claimant’s solicitors then wrote to the court to make the Amendment Application and to seek directions. On 10 October 2019, the court directed that the matter be dealt with in the hearing of the Leave Application.

11.On 13 November 2019, the claimant’s solicitors took out a summons to make the Restoring Application.

12.Counsel has accepted that a finding of fact made by the tribunal is not subject to challenge on appeal, unless the finding of fact or an inference made from the facts are perverse or irrational, where there is no evidence to support it; or it was made by reference to irrelevant factors; or if it was made without regard to relevant factors[8].

13.Counsel has also accepted that in respect of the claims relating to the period from 23 March 2003 to 2 December 2009, the tribunal is correct in concluding that such claims have already been time-barred.  As a result of this concession, the subject matter in the Leave Application is the claims relating to the period from 3 December 2009 to 2 December 2015 (“the Subject Period”).  In essence, the claimant is relying upon the Second Contention in the Leave Application.

Merit of the Leave Application

14.I would first examine the merit of the Leave Application.  In doing so, I would consider the draft Amended Form 14 on de bene esse basis.  Counsel has helpfully summarized that as per the draft Amended Form 14, the grounds of appeal are as follows:

Ground 1	The tribunal misdirected itself in law, misunderstood the law or misapplied the law.
Ground 2	The tribunal misunderstood the facts or misapplied the facts.
Ground 3	The decision of the tribunal was made without regard to relevant factors or made without evidence.

Ground 1

15.Counsel has accepted that the later half of the 4^th Employment Contract and the 5^th Employment Contract are void for illegality.   Counsel submits that notwithstanding the illegality, the de facto employment contract between Leung and the claimant during the Subject Period is still enforceable.  The authority heavily relied upon by counsel is the Court of First Instance’s decision in Lilik Andayani v. Chan Oi Ling^[9]. Counsel submits that the tribunal has erred in law by failing to apply Lilik correctly.

16.In Lilik, before leaving her home country, the foreign domestic helper made an oral agreement with the employer in Hong Kong that her monthly salary would be HK$2,200.  The domestic helper then signed a standard contract prescribed by ImmD, in which the monthly salary was HK$3,860.  The domestic helper sued the employer in the Labour Tribunal for arrears in wages, but was unsuccessful.  The domestic helper then appealed to the Court of First Instance.  DHCJ To (as he then was) held that:

(1)     The claimant could not claim under the written contract, as the higher wages had never come across the claimant’s mind before she signed the written contract. There was no meeting of the minds for the claimant to be paid HK$3,860. There was only one agreement governing the parties’ relationship, which was the oral agreement.

(2)     The claimant could not claim under the oral agreement either as it was illegal.  The Director of Immigration would not exercise his discretion to permit domestic helpers to enter Hong Kong for employment unless they entered into the standard contract, with the minimum wages and other protection stipulated therein. These minimum standards were imposed by administrative means to fulfil Hong Kong's international obligation under the International Labour Convention No 97.  Therefore, while the oral agreement was not contrary to any legislation, it was nonetheless illegal and void as being contrary to public policy. Such an agreement would simply have no existence in Hong Kong as no foreign domestic helper would be lawfully admitted into Hong Kong on the agreement.

(3)     Further, the oral agreement was a contract of exploitation. The claimant was under the undue influence of the agency and later subject to the unconscionable conduct of the defendant. There was no equal bargaining power, the claimant’s consent was uninformed and vitiated by fraud.  Public policy required that the contract be declared void.

(4)     However, there was a de facto employment relationship between the claimant and the defendant within the meaning of s.2 of the Employment Ordinance. Such a de facto employment relationship would arise where a person worked for another, acknowledged him as the employer to whom a fiduciary duty was owed and the purported employer in turn acknowledged his reciprocal obligation. This relationship gave rise to a contract of employment. The terms of this contract would be the same as the written contract. This was because it was only upon these minimum terms that the claimant would have been allowed to enter Hong Kong.

17.Counsel submits that the present case is very similar to Lilik.  In counsel’ s submission, the tribunal ought to have found that there was an implied contract between Leung and claimant during the Subject Period by reason of the de facto employment between them at that time, the terms of which should be same as the terms of the 5^th Employment Contract.  Counsel says that the claimant is entitled to enforce this implied contract against Leung.

18.There is development on the law concerning illegality after Lilik.  The development has been succinctly summarized by Bebe Chu J in Tse Chun Wai v Leung Kwok Kin Joseph[10].  In that case, the learned judge said:

“22. [counsel] had referred this court to Tinsley v Milligan [1994] 1 AC 341, and submitted that even though Tinsley had been overruled by the majority of the 9 Lord Justices of the UK Supreme Court full bench in Patel v Mirza [2016] UKSC 42, Tinsley remains binding on this court by reason of the Hong Kong Court of Appeal’s decision in Kan Wai Chung v Hau Wun Fai [2016] 5 HKC 585. It was further stated in Kan Wai Chung that the majority approach in Tinsley was adopted in Hong Kong and approved by the Court of Final Appeal[11].

23. In Tinsley, the plaintiff was the sole owner of a property although both she and the defendant had contributed to the purchase price and it was the understanding that they were joint beneficial owners. The purpose of that arrangement was to enable the defendant with the connivance of the plaintiff to make false claims for social benefits. The parties later fell out and the plaintiff asserted the sole ownership of the property and the defendant counterclaimed for a declaration that the plaintiff held the property on trust for the parties in equal shares. The plaintiff’s claim was dismissed and the defendant’ counterclaim was allowed. The plaintiff appealed.

24. The Court of Appeal (by a majority) dismissed the plaintiff’s appeal on the ground that in the circumstances the public conscience would not be affronted if the defendant’s counterclaim were to succeed.

25. The House of Lords unanimously rejected the “public conscience” test, but by a three to two majority upheld the Court of Appeal’s decision. The leading speech was given by Lord Browne-Wilkinson. His starting point was that title to property could pass under an unlawful transaction; but he held that the court would not assist an owner to recover the property if he had to rely on his own illegality to prove his title[12].

26. As submitted by [counsel], the ratio as decided by the majority of the House of Lords can be found in the following passage of Lord Browne-Wilkinson:

‘… In my judgment the time has come to decide clearly that the rule is the same whether a plaintiff founds himself on a legal or equitable title: he is entitled to recover if he is not forced to plead or rely on the illegality, even if it emerges that the title on which he relied was acquired in the course of carrying through an illegal transaction[13]’

27. This has become known as the “reliance rule”. ……

…………

64.  ……  In any event, I am of the view that this court is bound by Kan Wai Chung which has adopted Tinsley.  There had also been observations made by our Chief Justice in the case of Ryder Industries Limited and Chan Shui Woo, FACV Nos 12 & 13 of 2015 that, accepting that the facts in any given case will inevitably differ, the question of illegality must be based on firmer principle and policy[14].”

19.As said by the learned judge, the reliance rule laid down in Tinsley has been adopted by the Court of‌ Appeal in Kan Wai Chung, and by the Court of Final Appeal in HKSAR v Lau Kam Ying[15]. I note that those decisions are decisions subsequent to Lilik.  In the light of these binding decisions, the reliance rule should be regarded as the law in Hong Kong, and I am bound to apply that rule in considering the illegality issue in this case.

20.According to the claimant’s case, there was a de facto employment between Leung and her in the Subject Period under an implied contract.  That implied contract must be illegal, as it has never been approved by ImmD.  The claimant’s claims against Leung are found on the illegal implied contract.  That being the case, applying the reliance rule, the claimant’s case must fail.

21.In any event, I am of the view that the claimant cannot derive any assistance from Lilik, for this case is very different from the situation in Lilik.  In Lilik, the terms of the implied contract found by the court are same as the terms of the written contract, and that written contract had already been approved by ImmD.  However, in this case, while the terms of the alleged implied contract are same as the terms of the 5^th Employment Contract, the 5^th Employment Contract has never been approved by ImmD.  In other words, the alleged employment between Leung and the claimant has never been sanctioned by ImmD.  The employment itself therefore is illegal.  I do not see any room for the argument that the claimant may still enforce the alleged implied contract in these circumstances.

22.I am of the view that the tribunal is correct in rejecting the Second Contention, although I have reached the same conclusion by a different route.  In my judgment, the claimant cannot succeed by relying on Ground 1.

Ground 2

23.In Ground 2, counsel submits that the tribunal ought to have found that Leung was the de facto employer of the claimant in the Subject Period.  Given my conclusion on the illegality of the alleged implied contract as set out in the above, even if Leung was the de facto employer of the claimant in the Subject Period as suggested by counsel, the claimant’s case would still fail.  I am of the view that Ground 2 would not add any merit to the claimant’s case.

Ground 3

24.In Ground 3, counsel argues that the tribunal is wrong in finding that there was no coercion applied by Leung to make the claimant to work for her, as passport retention is a coercion.

25.What has been said by the tribunal in [20(3)] of the Reasons for Decision is as follows:

“The situation of obtaining the approval from ImmD after Chow’s death was different from that before Chow’s death. According to the Claimant, after Leung’s processing the papers with ImmD, the Claimant would be given back her passport and visa before Chow’s death. Between 2012 and 2015, the Claimant was not given back her passport and visa. She was not able to go back to the Philippines for holiday.” (Emphasis added)

26.The passport retention was an allegation made by the claimant in the hearing before the tribunal.  There is no clear indication in the Reasons for Decision showing whether this allegation has been accepted or rejected.  In any event, even assuming that there has been passport retention as alleged by the claimant, given my conclusion on the unenforceability of the alleged implied contract as set out in the above, the claimant cannot derive any assistance by relying upon Ground 3.

Conclusion on the Leave Application

27.I have considered the Leave Application by taking the matters set out in the draft Amended Form 14 into account.  For the reasons given in the above, I am of the view that there is no merit in the Leave Application.

DISPOSITION

28.Since there is no merit in the Leave Application, the Amendment Application and the Restoring Application would not serve any useful purpose.  I dismiss all the 3 applications.  All these applications are made ex parte, I therefore make no order as to costs. The claimant’s own costs be taxed in accordance with the Legal Aid Regulations. 

Written submissions by Mr Kay KW Chan, instructed by Khoo & Co., for the claimant (the applicant)