Wong Wai Hung v. Eastform Industries Ltd

HCLA 17/2022

[2025] HKCFI 4529

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 17 OF 2022

(ON APPEAL FROM LBTC NO. 60 OF 2022)

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J U D G M E N T

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INTRODUCTION

1.This is the Claimant’s appeal against the decisions[1] of Presiding Officer Susan Wong (“Presiding Officer”) in the Labour Tribunal (“Tribunal”). By her decisions, the Presiding Officer dismissed the Claimant’s claim against the Defendant for outstanding wages and awarded costs in favour of the Defendant.

2.Leave to appeal was granted by this court on 16.6.2023 for grounds 1, 2, 4 and 5 of the original grounds of appeal of the Claimant. Leave to appeal on ground 1 was limited to the extent that the Presiding Officer had failed to consider sufficiently the “statement of defence”[2] (“Statement”) of the Defendant prepared by Ms Ng Yuk Ying (“Ng”) in which it was admitted that an employment relationship between the Claimant and the Defendant exists.

3.In light of the limited scope of the leave granted, the grounds of appeal were amended by the Claimant to the following heads:

(1)  The Presiding Officer erred in disregarding or overlooking the Defendant’s evidence which are inconsistent with the finding of the Presiding Officer (Ground 1);

(2)  The Presiding Officer erred in law in identifying the date the Claimant moved out of Flat B, 12/F, Block 5, Grand Palisades (“Property”) as an issue and equating the Claimant’s moving out of the Property with the termination of the employment relationship between the Claimant and the Defendant (Ground 2);

(3)  The Presiding Officer erred in failing to exercise her power in the inquisitorial proceedings before the Tribunal to assist the Claimant under section 20 of the Labour Tribunal Ordinance Cap.25 in arriving at the finding that the Defendant had paid her salary until 31 July 2016 by cash (Ground 3); and

(4)  The Presiding Officer erred in law in accepting Ng’s account given in Court at the hearing, which is not part of the evidence in trial or given under oath (Ground 4).

BACKGROUND

4.I have set out the background of this matter in my written decision on granting leave to appeal. For the sake of convenience, I repeat some of the paragraphs below.

5.The Defendant is a company held by Mr Lam Wai Mo (“Lam”) and Ng in equal shares with the two of them as directors. Lam and Ng are husband and wife.

6.At the material times, Lam and the Claimant were in a relationship. The Claimant has two sons. The elder son is Lee Kam Kin (“Kam Kin”) and the younger son is Lam Tsun Ho (“Tsun Ho”). Lam is the father of Tsun Ho. The Claimant, Lam and the two sons lived together in the same apartment at the Property.

7.At trial, Kam Kin was a witness for the Claimant and Tsun Ho was a witness for the Defendant.

8.The main issue at trial was whether the Claimant was an employee of the Defendant, or as Lam alleged and the Presiding Officer found, the Defendant was merely used by Lam to pay for the living allowances of the Claimant and there was no employment relationship between the two.

9.It is the Claimant’s case that the Defendant employed her as the “personal assistant” of Lam in the period between April 2014 and March 2017 with a monthly salary of HK$38,000. In her Form 2 filed at the Tribunal, she claimed against the Defendant for arrears of wages in the sum of HK$418,000, representing the unpaid monthly salaries from 1^st February 2016 to 31^st March 2017.

10.On the other hand, Lam maintained that he had an extra-marital relationship with the Claimant since 1998. In 2001, he purchased a property at Grand Palisades under the name of the Claimant for the Claimant and Kam Kin to live in. In 2004, the Claimant gave birth to Tsun Ho and he then arranged them to move in to the Property which is a larger unit. Although the Claimant had on occasion helped out for some trivial tasks for the Defendant, the Claimant was not obliged to help and there was no fixed job duty or working hours for her. He arranged the Defendant to pay the Claimant $38,000 monthly since around April 2014.

11.The Presiding Officer found that the Claimant’s evidence regarding her job duties was very unclear. What the Claimant described was more tantamount to taking care of the daily livings of Lam than performing the work of a personal assistant to the director of a company. The Presiding Officer also found that the Claimant could not explain clearly matters concerning her salaries, benefits, scope of work and leave arrangements in the alleged employment by the Defendant.

12.The Presiding Officer was aware that the Defendant had filed tax return regarding the amount paid to the Claimant but she viewed that such arrangement was merely for the purpose of tax reduction.

13.The Presiding Officer accepted the evidence of Lam and Tsun Ho and found that the amount paid by the Defendant to the Claimant was living allowances as oppose to salaries and that there was no employment relationship between them.

14.The Presiding Officer ruled further that even if there was an employment between the Claimant and the Defendant the employment was terminated at the time when the Claimant moved out from the Property in July 2016.

15.Furthermore, the Presiding Officer ruled that all alleged outstanding wages before termination had been paid by Lam to the Claimant by 3 cash deposits in the sum of (a) HK$38,500 on 21.7.2016, (b) HK$100,000 on 31.8.2016 and (c) HK$26,000 on 31.8.2016.

16.At the hearing of the Claimant’s review application on 25 November 2022 (“Review Hearing”), the Claimant referred the Statement to the Presiding Officer and drew to her attention that the Defendant had admitted in the Statement that there existed an employment relationship between the Claimant and the Defendant. At the end of the hearing, the Presiding Officer dismissed the review application.

17.The Presiding Officer handed down her Reasons for Decision for the review application on 12.1.2023 (“Review Decision”). In dismissing the review application, the Presiding Officer stated that she accepted Ng’s account given during the Review Hearing that the Statement was prepared under a constraint of time[3]. The Presiding Officer also referred to certain paragraphs in Lam’s statement saying that it might be because of his hasty explanation of the matters to Ng that caused her to misstate in the Statement that the Defendant employed the Claimant.

DISCUSSION

18.Grounds 1 and 4 relate to the Defendant’s admissions made in the Statement.

19.It is apparent that the Presiding Officer had not applied her mind sufficiently or at all to the admissions in the Statement in arriving at her conclusion that there had not been an employment relationship. When Lam gave evidence at trial, the Presiding Officer did not ask him anything about the Statement. Besides, the Statement was not mentioned at all in her Reasons for Decision.

20.At the Review Hearing, the Claimant drew to the Presiding Officer’s attention to the admissions in the Statement. Although the Presiding Officer said at the end of the Review Hearing that she has already considered what the Claimant said in her oral decision given at trial, I can find nothing in the transcripts of proceedings showing that the Presiding Officer has considered the same.

21.The defence originally put forward by the Defendant was not denial of employment. On the contrary, the Defendant stated in the Statement that:

(a)  in or around April 2014 Lam verbally employed the Claimant to work for the Defendant;

(b)  the title of the Claimant was Assistant General Manager;

(c)  the Claimant has a monthly salary of HK$38,000 payable by cash;

(d)  the duty of the Claimant was to assist Lam on the general affairs of the Defendant, including classification of receipts etc.;

(e)  as Lam and the Claimant were living together, there was no designated date of payment of salary and Lam could not remember the exact dates of payments;

(f)  before August 2016, the Defendant paid all outstanding wages to the Claimant in cash;

(g)  the Claimant left the employment in July 2016 without submitting her resignation to the Defendant and the Defendant has not dismissed the Claimant;

(h)  as the Claimant did not perform her duties and did not receive her wages for a period of time, the Defendant considered that the Claimant would not resume duty and therefore employed another person to replace the Claimant as Assistant General Manager; and

(i)  the Defendant demands compensation of wages in lieu of notice from the Claimant.

22.The Statement was prepared in printed form. The body of content was annexed to a standard form provided for by the Tribunal for filing statement of defence. Ng signed on the form and the Defendant’s company chop was affixed. Right above the signature of Ng there is a declaration that all information in this statement is true.

23.During the Review Hearing, after the Claimant referred the Statement to the Presiding Officer, the Presiding Officer asked Ng if she could read the Statement. Ng answered that regarding the issue of employment, she has indicated at trial that she will leave it to the Presiding Officer to decide. The Presiding Officer then expressed that she was not asking about this and asked Ng whether the Statement was prepared by Ng or Lam, adding that Ng should not have witnessed many things. Ng then said at that time she has to submit documents within a very short time and so she only asked Lam briefly about the matter.

24.The above paragraph covered all the exchanges between the Presiding Officer and Ng concerning the Statement at the Review Hearing.

25.Concerning Lam’s witness statement[4], he only mentioned about the Statement in one paragraph[5] where he said: “Maybe it was because I explained the matters to Ng hastily that led Ng to misunderstand that what I asked the Claimant to assist was actually on work and as a result, Ng stated in the Statement that the Claimant was employed to work.”[6] As mentioned above, the Presiding Officer did not ask Lam any question concerning the Statement or the Defendant’s admissions at trial.

26.Mr Vincent Chen, counsel for the Defendant, submitted that the Claimant is inviting this Court to intervene and overturn the Tribunal’s findings of facts and credibility, which is normally outside the scope of appeal permitted by the statute and is only permitted in very exceptional circumstances[7]. Mr Chen submitted that there is no basis to suggest that the Presiding Officer overlooked or disregarded the Statement as the Presiding Officer had considered the same at the Review Hearing and decided to give little/no weight to it but preferred her version of event given orally in court. Regarding a new assistant was employed to replace the Claimant, this point has no merit because that a person was employed to do the works previously performed by another person does not render the previous person an employee. The former person can be a volunteer, a friend, or lover (as in the present case). This by itself is not indicative of the existence of a job position for the Claimant.

27.As submitted by Miss Connie Lee, counsel for the Claimant, the principles governing an appeal against the Tribunal’s order were set out in Wai Mei Lai Stella v. Viya Pramita[8]:

(a)  A party’s right to appeal against a Labour Tribunal’s award or order is limited to questions involving points of law or excess of jurisdiction;

(b)  Finding of facts by the Tribunal is generally immune from challenge as it involves no error of law, unless such is perverse or irrational, or where there is no evidence to support the decision or where the decision was made by reference to irrelevant factors or without regard to relevant factors; and

(c)  Further, failure to discharge the statutory duty to investigate is a ground of appeal. However, it is trite that not every failure to investigate a relevant matter will give rise to an appeal. The appellate court has to be satisfied that the subject matter of the complaint must not only be relevant but be of such a nature that the lack of investigation will give rise to injustice, in that, a fair and proper determination of the claim cannot be attained.

28.If a finding of fact is one in which there is no evidence to support or with which the evidence is inconsistent or one which no reasonable tribunal could reach or one which was based on a disregard or misunderstanding of the evidence, such finding would be considered as an error of law[9].

29.For a complaint of failure to investigate which will give rise to an appeal, the relevant matter forming the subject matter of the complaint must not only be relevant but be of such a nature that the lack of investigation will give rise to injustice, in that, a fair and proper determination of the claim cannot be attained[10].

30.With the above principles in mind, I am of the view that the Presiding Officer had committed an error of law in failing to consider sufficiently the admissions made by the Defendant through Ng in the Statement.

31.As submitted by Miss Lee, Ng is a director and representative authorised by the Defendant to have conduct of the proceedings before the Tribunal, the admissions in the Statement are binding on the Defendant. The admissions constituted statements and evidence against self-interest. There could be no better evidence than such express declaration against the Defendant’s own interest[11], which is highly relevant for consideration of the issue as to whether an employment exists.

32.In dismissing the review application, the Presiding Officer said she accepts the account given by Ng at the Review Hearing. However, the so-called account given by Ng was only a response in one sentence prompted by the questions of the Presiding Officer, which was flimsy and without substance. More importantly, Ng was not giving her answer under oath and her account had not been tested in cross-examination.

33.The Presiding Officer also said she accepts the explanation of Lam in his witness statement. Similarly, the explanation referred to in Lam’s witness statement did not go much into details. Again, he was not questioned at all on this aspect in his evidence.

34.The Presiding Officer said in the Review Decision that she accepts that Lam might have explained the matters to Ng hastily as Lam was talking about his affairs with the mistress to his wife. I am of the view that this cannot be a convincing reason as the content of the Statement already disclosed that Lam had been cohabiting with the Claimant and I can see no reason why Lam would hastily admit the employment and give so many particulars on the employment to Ng.

35.In my judgment, the inadequacy on the part of the Presiding Officer in dealing with and considering the admissions of the Defendant in the Statement gives rise to injustice to the Claimant and the Presiding Officer has committed an error of law.

36.Besides, the Presiding Officer has also failed to discharge her duty to investigate on the issue. The Presiding Officer should have put to Lam and Ng the admissions of the Defendant and assess how the admissions might affect the evidence as a whole and the credibility of the relevant witnesses. The failure to do so has also resulted in injustice to the Claimant.

37.The above reasons gave answers to Mr Chen’s queries. Grounds 1 and 4 of the grounds of appeal sustained.

38.Regarding Ground 2, it is Miss Lee’s submission that the Presiding Officer simply conflated (1) the cessation of domestic/cohabitation relationship as between the Claimant and Lam and (2) the termination of employment relationship between the Claimant and Defendant.

39.The Presiding Officer set out her reasons for finding that the Claimant had left the employment in July 2016 under paragraphs 20 to 28 of her Reasons for Decision. In paragraph 20, the Presiding Officer said that, assuming there was an employment relationship between the Claimant and the Defendant, the claim for outstanding wages rests upon the issue as to whether the Claimant left the Property in July 2016 as alleged by Lam, or the Claimant terminated the employment in March 2017 as alleged by the Claimant. From paragraphs 21 to 26, the Presiding Officer explained why she disbelieved the evidence of Kam Kin that the Claimant moved out from the Property in 2019. From paragraphs 27 to 28, she explained why she accepted the evidence of Tsun Ho that the Claimant left the Property voluntarily in July 2016. In paragraph 29, the Presiding Officer commented that she agreed that it is cruel to ask Tsun Ho to give evidence in court. From paragraphs 30 to 32, she referred to the evidence regarding certain cash deposits to the Claimant’s bank account and concluded that, should there be an employment of the Claimant all outstanding wages had been satisfied. In paragraph 33, the Presiding Officer stated that the Claimant has failed in her claims and shall pay for the costs of the Defendant.

40.The Presiding Officer did not explain why leaving the Property equates termination of employment. In fact, she did not expressly make such a finding. In the Statement, the Defendant maintained that it was until the beginning of 2018 that the Defendant viewed that the Claimant would never return to work. In my judgment, as submitted by Miss Lee, the Presiding Officer has failed to make any or any proper investigation and finding as to how and when the employment relationship has ended.

41.Ground 2 is therefore a valid ground.

42.For Ground 3, Miss Lee submitted that the Presiding Officer has no evidential basis to reach and support her finding that Lam had paid the Claimant her outstanding wages for May and July 2016 by way of cash.

43.In her Reasons for Decision, the Presiding Officer identified 3 cash deposits recorded on the Claimant’s bank statements namely (1) HK$38,500 on 21.7.2016, (2) HK$100,000 on 31.8.2016 and (3) HK$26,000 on 31.8.2016 and found that these payments were originated from the cash payments from Lam. The Presiding Officer then concluded that should the employment exist, all outstanding wages had already been satisfied by these cash payments.

44.Although it is Lam’s case that some of the living allowances he paid to the Claimant was by cash, he did not give any particulars as to the amounts of the alleged cash payments and the time when such payments were made. Lam had never stated in his evidence that the 3 deposits identified by the Presiding Officer has anything to do with the alleged cash payments to the Claimant.

45.At trial, the Presiding Officer asked the Claimant to explain the source of the 3 deposits and the Claimant admitted that those payments should not be made by her elder son and said that she had a part-time job of selling cosmetic products. However, in paragraphs 31 and 32 of her Reasons for Decision, the Presiding Officer stated that the source of the 3 deposits are unknown and she does not believe that they came from the Claimant’s elder son. She then found further that all wages had been paid.

46.In my judgment, there is simply no evidential basis to suggest that the 3 cash deposits represented the cash payments allegedly paid by Lam to the Claimant. The finding of the Presiding Officer as such is perverse.

CONCLUSION

47.The Claimant’s appeal is allowed on all grounds.

48.I order that this matter be remitted back to the Tribunal for determination before another presiding officer.

49.I also give a costs order nisi that:

(i)  Costs of this appeal be to the Claimant to be taxed if not agreed;

(ii)  Costs in the Tribunal be in the cause;

(iii)  Claimant’s own costs be taxed in accordance with Legal Aid Regulations.

50.The order nisi shall become absolute unless any party apply to vary the same within 14 days.

Ms Lee, Connie H.Y. instructed by Henry Wai & Co., for the Appellant

Mr Chen, Vincent S.K. instructed by Patrick Chu, Conti Wong Lawyers LLP for the Respondent