Suen Hung Shan v. Wong & Ouyang (HK) Ltd
Read the full judgment text of HCA 1796/2020 on BabelCite. This High Court CFI judgment was delivered on 24 November 2023.
1. This is the trial of the plaintiff’s claim against the defendant (his ex-employer) which had been transferred from the Labour Tribunal.
Cited by 4 cases · Cites 5 cases
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HCA 1796/2020 [2023] HKCFI 3006 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 1796 OF 2020 (Transferred from Labour Tribunal Claim No. LBTC 1833/2020) __________________
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_________________ JUDGMENT _________________ INTRODUCTION 1.This is the trial of the plaintiff’s claim against the defendant (his ex-employer) which had been transferred from the Labour Tribunal. FACTUAL BACKGROUND 2.The following background is undisputed/indisputable. 3.By an employment agreement dated 21 December 2018 (“the 1st Employment Agreement”), the defendant employed the plaintiff as Senior Resident Architect for the project known as “Galaxy Cotai, Mega Resort Lot 3, Macau” (“the Development”). This written agreement which was signed by both parties provided, inter alia, that:
4.By a letter dated 18 April 2019, the defendant informed the plaintiff that his employment with the defendant would not be continued beyond the aforesaid probation period, and shall be terminated on 18 April 2019. 5.The plaintiff then commenced a claim against the defendant at the Labour Tribunal under LBTC 2091/2019 (“the 1st Labour Tribunal Case”). 6.The 1st Labour Tribunal Case was then settled. The settlement agreement dated 27 August 2019 (“the Settlement Agreement”) which was printed on the defendant’s letterhead and signed by both parties provided that:
7.Pursuant to Clause 1 of the Settlement Agreement, the defendant, by letter also dated 27 August 2019 (“the 2nd Employment Agreement”), confirmed the plaintiff’s employment as Technical Manager of the defendant. 8.The 2nd Employment Agreement provided, inter alia, that:
9.By reason of the aforesaid full and final settlement between the parties, the plaintiff obtained leave from the Labour Tribunal on 28 August 2019 to withdraw all his claims made in the 1st Labour Tribunal Case. 10.By letter dated 2 June 2020 (“the Termination Notice”), the defendant informed the plaintiff that his employment with the defendant would be terminated on 27 July 2020. 11.The plaintiff then started another claim at the Labour Tribunal (LBTC 1833/2020) against the defendant on 11 September 2020 and claimed for a total sum of $4,718,450 (“the 2nd Labour Tribunal Case”). His claims were based on the following grounds:
12.The 2nd Labour Tribunal Case has subsequently been transferred to the Court of First Instance, and the Claim Form filed in the Labour Tribunal has been ordered by Master S H Lee to be treated as the Writ of Summons herein. THE PLAINTIFF’S PLEADED CASE 13.The plaintiff’s claims as pleaded in his Statement of Claim may be summarised as follows. 14.When the parties entered into the 1st Employment Agreement, the construction of the Development was in Phase 3. The plaintiff had been promised by the defendant that the plaintiff would be employed to work for the defendant for Phase 4 of the construction of the Development (“the Oral Agreement”), and it was estimated that such work would take another three years to complete. It was only because of such a promise that the plaintiff agreed to sign the 1st Employment Agreement. 15.However, in breach of its promise and its mutual trust with the plaintiff, the defendant terminated the plaintiff’s employment after three months, without giving any reason. He therefore commenced the 1st Labour Tribunal Case against the defendant, and claimed for, among other things, his loss of wages which he would have earned. 16.The 1st Labour Tribunal Case has subsequently been settled, and as a result he has withdrawn his claims at the Labour Tribunal. However, despite such settlement, he has not waived any of his claims made in the 1st Labour Tribunal Case. 17.Under their settlement agreement, the defendant has agreed to re-employ the plaintiff for a total of 47 months. When the defendant entered into the Settlement Agreement, it knew or should have known that it was obliged to compensate the plaintiff for “prospective damage” (wages for a further period of 36 months after 27 July 2020). 18.There was an implied term in the 2nd Employment Agreement that the defendant should give reason for termination of the plaintiff’s employment. 19.The defendant has breached Clause 1 of the Settlement Agreement, the aforesaid implied term and the mutual trust between the parties in that the defendant has terminated the plaintiff’s 2nd Employment Agreement without giving any reason. 20.Clause 4(v) of the 2nd Employment Agreement (which stipulated for a deduction of $164,450 from the gratuity payment calculated under Clause 4(i)/(iv) of the 2nd Employment Agreement) has been added without the consent of the developer of the Development (GEG), and as a result, the 2nd Employment Agreement is invalid. 21.When the plaintiff entered into the Settlement Agreement (including the 2nd Employment Agreement), he believed that the defendant would renew his contract for at least another three years (making a total contractual period of 47 months). 22.It was stipulated in the 2nd Employment Agreement that the defendant would renew his contract if it was satisfied with his performance. In the Termination Notice, the management of the defendant thanked him for his contribution to the defendant. The defendant’s payment of “end-of-contract gratuity” to him also demonstrated that the defendant was satisfied with his performance. In these circumstances, it was unreasonable for the defendant to dismiss him. 23.Further, if the defendant did not intend to extend his employment period, there was no reason why the defendant would include the provision that “The employment period may be extended if mutually agreed” in Clause 1 of the 2nd Employment Agreement. 24.The plaintiff therefore, in his Statement of Claim filed on 22 January 2021 herein, sought an order that he be re-employed by the defendant. Alternatively, he claimed for his loss of wages for 36 months and “end-of-contract gratuity” in the total sum of $4,554,000. He further claimed for the return of the deducted “end-of-contract gratuity” in the sum of $164,450. 25.It should be mentioned here that the plaintiff has also made a number of “counterclaims” (“the plaintiff’s Counterclaim”) in his Reply, including payment in lieu of notice, damages compensating his loss of tax payment in relation to the gratuity payment of $164,450, and damages for defamation, etc. However, the plaintiff’s Counterclaim has been struck out by Master D Ho on 13 September 2022. THE DEFENDANT’S PLEADED CASE 26.The defendant’s pleaded case is very straight-forward. 27.In a gist, it was asserted that:
DISCUSSION 28.I regret to say that, for reasons which I will further explain below, the plaintiff’s claims are totally misconceived, and this case should have been disposed of summarily by procedures under Order 14A and Order 18 rule 19 of the Rules of the High Court long time ago. The 1st Labour Tribunal Case and its settlement 29.It is indisputable (and indeed undisputed by the plaintiff himself in his pleadings[1], evidence[2] and submissions[3]) that a full and final settlement had been reached in relation to the 1st Labour Tribunal Case by virtue of the Settlement Agreement. 30.It is trite that an unimpeached compromise represents the end of the dispute or disputes from which it arose. Any issues of fact or law that may have formed the subject matter of the original dispute are buried beneath the surface of the compromise. The court will not permit them to be raised afresh in a new action. The foundation of the principle lies in two aspects of public policy: the need for there to be an end to disputation and the desirability of parties being held to their bargains: see Foskett on Compromise, 9th edition (2020), §§6-01 and 6-02. 31.Therefore, it is futile for the plaintiff to address/put forward arguments:
32.Without disrespect to the plaintiff, I shall not deal with such arguments herein. 33.I should also mention that in the 127-page written final submissions and 79-page reply submissions, the plaintiff had also included many other totally irrelevant matters or even new factual matters which have never been admitted as evidence. With greatest respect, I do not think it is necessary to set them all out in this Judgment. It suffices for me to reiterate that I have considered all the matters raised before I came to the conclusion that they are either irrelevant or inadmissible. 34.The same approach is adopted in relation to the large number of authorities cited by the plaintiff which are mostly irrelevant. The Settlement Agreement and the 2nd Employment Agreement 35.For the reason explained above, the Court should focus on the interpretation of the terms of the Settlement Agreement (as well as the 2nd Employment Agreement which had been entered into as part of the settlement agreement between the parties). Legal principles on interpretation of contract 36.A useful summary of the general principles by which contractual documents are construed can be found in the judgment of Lord Hoffmann in Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 WLR 896 as follows (at 912H-913F):
When should the 2nd Employment Agreement expire? 37.With the above principles in mind, I now to turn to consider one of the most important issues in the present case, namely, when should the 2nd Employment Agreement expire? 38.To recap, Clause 1 of the 2nd Employment Agreement provides that:
39.The plaintiff argued that the effect of the above clause was that, despite the inclusion of the date of “27 July 2020”, the employment between him and the defendant would not end there and then, but would be continued up to the conclusion of the construction of Two Taikoo Place. He further alleged that the 2nd Employment Agreement could not be terminated on 27 July 2020 without his consent. 40.In support of his aforesaid assertions, he relied on, inter alia, the following matters:
41.I am afraid I must say that the plaintiff’s assertions have no merit at all. 42.First, bearing in mind the matters which should be taken into account when assessing the credibility of a witness as set out in Hu Lan v David Golden [2023] HKCFI 873 at [36], I reject the plaintiff’s evidence that the defendant had ever promised him that the plaintiff would be employed to work for the defendant for Phase 4 of the construction of the Development, for the alleged Oral Agreement is contradictory to the provision of the 1st Employment Agreement which provided for a period of employment of 18 months only[4]. If the parties had reached the Oral Agreement as alleged, they would have fixed the term of the employment not by reference to a date but by project. 43.Once the plaintiff’s allegation on the Oral Agreement is rejected, the whole basis of his case collapsed. 44.In any event, the Oral Agreement cannot assist the plaintiff because, as aforesaid, any dispute(s) in relation to the 1st Employment Agreement have been fully and finally settled by virtue of the Settlement Agreement (and the 2nd Employment Agreement). 45.Second, it is crystal clear that the 2nd Employment Agreement is a fixed term contract, which provided expressly an “end date”, namely, 27 July 2020. Even if the parties had reached the Oral Agreement as alleged (which has been rejected above), the Oral Agreement must have been superseded by the 2nd Employment Agreement. 46.Further, risking to state the obvious, the absence of the word “expiry” in the clause does not necessarily mean that the agreement has not expired on 27 July 2020. 47.Third, in the light of the clear wordings and effect of the 2nd Employment Agreement, I reject the plaintiff’s suggestion that the defendant knew or should have known that it was obliged to compensate the plaintiff for “prospective damage” as alleged. I have no hesitation in accepting Mr Lam’s evidence (which denied this allegation) as truthful in this regard. 48.Fourth, the plaintiff’s alleged subjective belief that the defendant would renew the 2nd Employment Agreement for at least another three years is irrelevant for the purpose of interpreting the effect and meaning of the said agreement. In fact, this allegation on subjective belief is contradictory to his own case that the employment has not expired on 27 July 2020: If the employment had not come to an end at all, the question of “renewal” simply does not arise. 49.Fifth, the insertion of the sentence “The employment period may be extended if mutually agreed” into Clause 1 cannot assist the plaintiff at all. Apparently the extension must be subject to the agreement of both parties. 50.Sixth, there is absolutely no hint in either the Settlement Agreement or the 2nd Employment Agreement that the GEG Agreement had been included as part of the terms of the settlement between the plaintiff and the defendant. This allegation is simply hopeless. 51.Seventh, the plaintiff’s reliance on Clause 2 of the 2nd Employment Agreement which (he said) did not provide that he was going to work full time in the Two Taikoo Place office “partial development” but “development” is totally misplaced. On any objective view, Clause 2 cannot be interpreted to give the meaning as intended by the plaintiff. 52.Eighth, the service of the Termination Notice by the defendant cannot assist the plaintiff. The Termination Notice reads:
53.I do not agree with the plaintiff that the service of the above notice could be taken to mean that the defendant also knew that the 2nd Employment Agreement would not expire on 27 July 2020. Quite the opposite. 54.To conclude, it is my finding that the 2nd Employment Agreement is a fixed term contract, which has expressly provided “27 July 2020” as the date of expiry of the agreement. 55.It follows that the 2nd Employment Agreement has been terminated by effluxion of time. The defendant’s obligation to give reason for termination 56.The plaintiff then alleged that there was an implied term in the 2nd Employment Agreement that the defendant should give reason for termination of the plaintiff’s employment. 57.He also argued that the failure on the part of the defendant to give reason was in breach of their mutual trust. 58.These arguments are misconceived. As the 2nd Employment Agreement is a fixed term contract, the employer is plainly entitled to let the contract expire by effluxion of time. 59.I suspect that the plaintiff has been confused by the receipt of the Termination Notice on 2 June 2020. In fact, even though it was described as a “termination notice”, it did not seek to terminate the 2nd Employment Agreement earlier than 27 July 2020. Therefore, the said notice should not be mixed up with the type of notice issued under section 6 of the Employment Ordinance. 60.Even if the Termination Notice did terminate the 2nd Employment Agreement earlier than scheduled, the defendant was not obliged to provide reason as to why the defendant has chosen to terminate the agreement earlier, because the defendant did not summarily dismiss the plaintiff. 61.In this regard, I respectfully agree with Anthony Chan J who held in Lam Siu Wai v Equal Opportunities Commission [2021] 5 HKLRD 30 that:
62.I should also add that, in the case where an employment agreement is a fixed term contract, even if it (like the 2nd Employment Agreement) provides that it may be extended by mutual agreement, the employer has no obligation to renew/extend the employment upon its expiry, even if the employee has performed well during the employment period. There is simply no room for the plaintiff to argue that the defendant owes him a duty of good faith when deciding whether to renew his employment upon the expiry of the 2nd Employment Agreement: See Ko Hon Yue v Liu Ching Leung & Others (HCA 3494/2003, unreported, 4 August 2008), at [171] – [173]. Deduction of $164,450 63.The plaintiff argued that although Clause 4(v) of the 2nd Employment Agreement did provide for deduction of the sum of $164,450, he was no longer bound by it because of the breach of the Settlement Agreement on the part of the defendant in failing to pay certain sums claimed in the 1st Labour Tribunal Case. 64.As the defendant has not been in breach of the Settlement Agreement (or the 2nd Employment Agreement) at all, this argument is rejected. 65.The plaintiff further alleged that the provision on deduction was included without the consent on the part of GEG and therefore it was invalid. 66.This argument is not accepted as there is no reason why the inclusion of the said provision into the 2nd Employment Agreement had to be subject to the consent of GEG. Other “claims” 67.In his opening and closing submissions, the plaintiff has referred to many other claims which include, among others, claims for damages for defamation and claims made pursuant to Part VIA and section 72B of the Employment Ordinance. As I explained to the plaintiff time and again at the trial, he is bound by his pleadings and this Court would not allow him to put forward claims which have not been pleaded or which have been struck out (as far as the plaintiff’s Counterclaim is concerned). The defendant’s failure to call Mr So Wing Kei Wayne as witness 68.For the sake of completeness, I should also mention that while the defendant has served two witness statements (of Mr Lam and Mr So Wing Kei Wayne respectively), at the end of the day, the defendant decided to call Mr Lam only as its witness at the trial. 69.In his closing submissions, the plaintiff complained that this Court had “[allowed] the withdrawal of Mr So from giving his oral statement and be exempted from cross examination by the plaintiff”[5]. He then went on to make submission on the credibility of Mr So. 70.With greatest respect, this line of argument is totally misconceived, for the defendant has the right to decide whether to call a particular witness to give evidence in court, even though a witness statement of such a witness has previously been served. 71.In the circumstances where the defendant has failed to call an important witness (assuming for the time being that Mr So is such a witness, which I do not agree), the plaintiff at most may argue that adverse inference may be drawn against the defendant. However, in the circumstances of the present case, I do not accept that such inference can be drawn. ORDER 72.By reasons of the aforesaid, the plaintiff’s claims are hereby dismissed. COSTS 73.I make a costs order nisi that the plaintiff shall bear the defendant’s costs of the action (including all costs reserved), to be taxed if not agreed. 74.The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days hereof.
The plaintiff was not represented Mr But Sun Wai, instructed by Withers, for the defendant | ||||||||||||||||||||
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