Read the full judgment text of CACV 517/2019 on BabelCite. This Court of Appeal judgment was delivered on 11 June 2021 before Lam VP, Yuen JA, Chu JA.
Contract law – employment contract – formation and interpretation – letter of offer, conditions of service and letter of acceptance issued together – whether letter of acceptance forms part of the contract – whether termination provision (three months' notice or payment in lieu) took immediate effect – contextual unitary approach to interpretation – Law Ting Pong Secondary School (Claimant) v Chen Wai Wah (Defendant). Contract law – penalty clauses – termination provision entitling either party to terminate by three months' notice or payment in lieu of three months' salary – whether enforceable or an unenforceable penalty – payment in lieu held to be a primary obligation, not a secondary obligation on breach, so doctrine of penalty not engaged – alternatively, applying Cavendish Square Holdings v Makdessi, not out of all proportion to claimant's legitimate interest. Civil appeal allowed; judgment of Wilson Chan J set aside; judgment entered for the claimant for HK$139,593.20 with interest at judgment rate; costs of appeal and leave application summarily assessed at HK$70,000.
Legal issues: Whether the Letter of Acceptance forms part of the employment contract · Whether the Termination Provision is unenforceable as a penalty clause
Outcome: Appeal allowed; the Judge's order of 12 September 2019 set aside; judgment entered for the claimant against the defendant in the sum of HK$139,593.20 together with interest at judgment rate from the date of the award until full payment; defendant to pay the claimant's costs of the appeal and the leave application summarily assessed at HK$70,000.
Cited by 10 cases · Cites 8 cases