Caidao Capital Ltd v. Harmen Christiaan Overdijk and Others

HCA 2114/2017 &
HCA 2911/2017 &
HCA 2912/2017

[2026] HKCFI 3281

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS. 2114 OF 2017, 2911 OF 2017 AND 2912 OF 2017

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(Consolidated pursuant to the Order of Master S. Lo dated 24^th January 2018)

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JUDGMENT ON COUNTERCLAIMS

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1.On 6 March 2026, I handed down judgment after trial (“Judgment”).[1] As I explained in the Judgment, I decided to hold a further hearing to decide on the precise relief to be awarded, if any, on the 1st and 2nd Defendants’ counterclaim in light of the findings made in the judgment. The hearing took place on 26 May 2026. I reserved judgment. This is my judgment.

2.As evident from the Judgment, I had difficulty with the quantum aspect of the 1^st and 2^nd Defendants’ counterclaims. At §150, I made it clear that at the further hearing no new evidence will be allowed and the 1^st and 2^nd Defendants would not be allowed to run a case which was not pleaded.

3.At the hearing before me, Mr Bennett confirmed that the 1^st and 2^nd Defendants would no longer pursue the TFRS counterclaim or the claim based on payment in lieu taking the claimed TFRS benefit into account.[2] The only matter pursued by way of counterclaim was Mr Overdijk’s counterclaim for payment in lieu of notice in light of the court’s findings. This approach had the advantage of avoiding the difficulties associated with understanding Appendices 1 and 2 of the RRADCC. Mr Bennett explained that the reasons for not pursuing the TFRS aspect of the counterclaim was to save time and costs in light of the potential time involved in reviewing and making submissions on the counterclaim, and also concerns about CCL’s apparent impecuniosity.

4.In summary, Mr Bennett submitted that Mr Overdijk had pleaded and claimed payment in lieu of notice under his existing counterclaim. His pleaded case was that he accepted the repudiatory breach by the Plaintiff and terminated his employment on 2 February 2017 pursuant to sections 10 and 10A of the Employment Ordinance (Cap 57). Mr Bennett submitted that the court had found that Mr Overdijk had received a monthly payment of HK$100,000 during his employment. At §118 of the Judgment, I decided that these monthly payments did constitute ‘wages’ and there was no valid justification for CCL to cease to make the monthly payments. Mr Bennett submitted the HK$100,000 was remuneration paid for work done or to be done.

5.Accordingly, Mr Bennett submitted that the amount of payment in lieu of notice due from the Plaintiff to Mr Overdijk was for a period of 46 days, being the number of days remaining in his notice period up to 20 March 2017, calculated from 2 February 2017. On this approach, the figure claimed was HK$151,232.88 (i.e., HK$100,000 x 12/365 x 46 days).

6.In response, Mr Hart submitted that the formulation of the payment in lieu of notice counterclaim departed from Mr Overdijk’s pleaded case as set out §94(2) of the RRADCC. He submitted that this should not be allowed especially in light of my observations at §150 of the Judgment on unpleaded cases. Given that this was the only aspect of the counterclaims that was now being pursued, if it were rejected, it would follow that no relief should be awarded on the 1^st and 2^nd Defendants’ counterclaim.

7.Mr Bennett replied that the existing pleadings were sufficiently broad to encompass Mr Overdijk’s counterclaim as revised, and that it would be wrong not to give effect to his entitlements based on the findings of the court even if it involved a smaller sum that was originally claimed in the pleadings. Mr Bennett submitted that courts regularly do give judgments for less than what is claimed where the court is not satisfied with certain aspects of quantum of the case as originally framed.

8.In light of Mr Hart’s objection, it is necessary to revisit the pleadings to ascertain whether the revised claim is open to Mr Overdijk.

9.Mr Overdijk expressly pleads CCL’s agreement to make monthly payments of HK$100,000 since April 2015,[3] payment to Mr Overdijk by CCL from April 2015 until December 2016,[4] and that the monthly payments were paid on account of actual profits and as a draw on TFRS.[5] He also pleaded that CCL’s failure to pay the monthly payment for January 2017 constituted grounds for repudiation which he accepted on 2 February 2017.[6] Further, Mr Overdijk claimed payment from CCL of an amount equivalent to the payment in lieu of notice due from CCL for the period of 46 days, being the number of days remaining in his notice period up to 20 March 2017 as at 2 February 2017.[7]

10.§94(2) of the RRADCC says that the claim for payment in lieu of notice to be calculated under section 7 of the Employment Ordinance for 46 days is “based on the 1^st Defendant’s wages earned in the period from 1 February 2016 to 31 January 2017”. It continues “… The calculation of the payment in lieu of notice based on the quarterly payments due to the 1^st Defendant from 1 February 2016 to 31 January 2017 as set out in Annexure 2 (excluding the quarterly payment for 1 Oct – 31 Dec 2016 the amount of which has yet to be confirmed) which total HK$1,323,967.69 divided by 365 and multiplied by 46 days, the 1^st Defendant calculates that the payment due to him from the Plaintiff pursuant to s10A(2) would be HK$166,856.20”. In Mr Overdijk’s Prayer for Relief in the RRADCC, damages in the sum of HK$166,856.20 are sought as particularised in §94(2) or “as may be assessed by this Honourable Court”.

11.Having set out the relevant pleadings, I take into account the following observations. First, it is clear from the pleadings that Mr Overdijk claims for an amount equivalent to wages in lieu of notice for a period of 46 days calculated from 2 February to 20 March 2017. The amount is expressly said to be based on Mr Overdijk’s wages earned in the period from 1 February 2016 to 31 January 2017. On the basis that I found that the monthly payments of HK$100,000 did constitute his ‘wages’, I agree that they can be used as a basis to calculate the wages in lieu of notice.

12.Second, as a matter of substance, Mr Overdijk’s case has always been that he was entitled to outstanding TFRS payments. But it is important to appreciate that the HK$100,000 monthly payments (which is now used as the basis to calculate the amount owing) were paid in advance, and on account, for outstanding TFRS. Mr Overdijk’s case has always been that CCL had no justification to stop making the monthly payments. I accepted that submission and found that to constitute a repudiatory breach on the part of CCL. Although the quarterly payment calculations are no longer relied on, I am unable to agree that Mr Bennett’s formulation of the claim represents a fundamental departure from Mr Overdijk’s existing case.

13.Third, from the angle of fairness, the monthly payments issue and their legal characterization was a contested issue at trial which both sides made extensive submissions on. As stated in [9] above, the primary facts relating to the monthly payments were pleaded by Mr Overdijk. At trial, I did not accept Mr Hart’s submission that there were no “wages” owing and therefore no grounds to claim for constructive dismissal. The existence of the monthly payments was not in dispute. I am unable to see any meaningful prejudice to CCL in allowing the claim especially when the amount now sought (HK$151,232.88) is less than the amount pleaded.

14.Fourth, the Prayer for Relief does specify that damages are sought in the amount as set out in §94(2) of the RRADCC or “as may be assessed by this Honourable Court”. To my mind, this does leave the court with a degree of flexibility to make an assessment based on its findings at trial.

15.At the end of the day, and taking all the circumstances into account, I consider that it would be manifestly unfair and incorrect to deprive Mr Overdijk damages equivalent to wages in lieu of notice in the context where he did receive ‘wages’ during his employment and there is no difficulty in ascertaining the quantum of those wages in the form of monthly payments. For all the above reasons, I enter judgment in favour of Mr Overdijk against CCL for the amount of HK$151,232.88 on his counterclaim. Interest on this sum shall run at the rate of 1% above HSBC’s best lending rate from 9 February 2017 until the date of judgment.

16.Mr Hart submitted that I should vary the costs order made in the Judgment. At §152, I made an order nisi that CCL pay the 1^st to 3^rd Defendants the costs of these proceedings, including all costs reserved, to be taxed if not agreed. This covered the costs of the entire proceedings including the counterclaims, and it has long since become an order absolute. No application was made by CCL to either vary the costs order nisi, or to extend time to make a variation application until the determination of this further hearing. Accordingly, for this reason alone, I am unable to accede to Mr Hart’s request.

17.I heard submissions on costs of this hearing. At Judgment §150, I indicated my provisional view that there is no reason why CCL should bear the costs of this hearing. Taking a sensible approach, Mr Bennett did not object. I order that the 1^st and 2^nd Defendants are to pay CCL’s costs of the hearing on 26 May 2026 insofar as it related to the counterclaims. For the purposes of taxation, I record that 50% of the time was spent on this matter. The other half was spent dealing with the Defendants’ summons of 20 March 2026 for the joinder of Ms Lee for the purpose of a non-party costs order for which I ordered that costs be reserved.

Mr Andrew Hart (Solicitor Advocate), of Hart Giles, for the Plaintiff

Mr Russell Bennett, of Tanner De Witt, for the 1^st to 3^rd Defendants