Chan Wa Fai and Another v. Kar Hong Construction and Engineering (Hong Kong) Co., Ltd

HCLA 2/2026

[2026] HKCFI 5879

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 2 OF 2026

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. 293 OF 2025)

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DECISION

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A. INTRODUCTION

1.The defendant is a limited company incorporated in Hong Kong, carrying on business in construction, engineering and renovation works.  

2.Mr. Chan Wa Fai (i.e. the 1^st claimant) is the younger brother of Mr. Chan Wa Mo (i.e. the 2^nd claimant).

3.The claimants’ claims were commenced on 24 January 2025, by which they claimed against the defendant for arrears of wages and overtime pay.

4.Their claims were partly allowed after trial by Deputy Presiding Officer Mr Kevin Lau (“the Deputy Presiding Officer”) on 8 December 2025.

5.The defendant then applied for review, which was dismissed on 19 January 2026. 

6.The defendant now applies for leave to appeal against the learned Deputy Presiding Officer’s award.

B.   THE PROCEEDINGS AT THE TRIBUNAL

7.In this case, it is undisputed or indisputable that:

(1)  The defendant was a contractor of a construction site in Kwai Chung, namely “萬國數據中心” (“the GDS Site”);

(2)  Mr Hu Shenghua (“Mr Hu”) is the sole director of the defendant.  He knew the 1^st claimant in another project (known as “the AMC Project”). At that time, the 1^st claimant was working for another company known as West Coast Engineering Development Limited (耀駿工程發展有限公司) (“West Coast”).  Having been impressed by the 1^st claimant’s work performance, Mr Hu invited the latter to participate in 2 other projects before getting him involved at the GDS Site;

(3)  The 1^st claimant assumed the role as a foreman at the GDS Site, and was responsible for arranging workers to work at that site.  He would accept payments of wages on behalf of the workers.  He would also chase for outstanding wages on their behalf.

8.The claimants’ case is that they were employees of the defendant.

9.The defendant denied that it was liable to the claimants, as they were not the defendant’s employees but independent contractors.  Furthermore, the defendant alleged that even if the claimants were its employees, a sum of $200,000 which was paid on 28 March 2024 should be set off against any award to be made.

10.After trial, the learned Deputy Presiding Officer held, inter alia, that:

(1)  Mr Hu was an incredible and unreliable witness;

(2)  The defendant was the employer of the claimants;

(3)  As far as the payment of $200,000 made by the defendant to the 1^st claimant on 28 March 2024 is concerned, Mr Hu’s oral evidence was that it was paid for work done at the GDS Site, whereas the 1^st claimant said it was for another site (known as the “AMC Site”).  However, in the WhatsApp messages exchanged on 5 April 2024, it could be seen that the parties had agreed that the said $200,000 would be considered to be payment for the AMC Site for the month of December 2023;

(4)  Although it was Mr Hu’s oral evidence that the parties had subsequently agreed that the said payment should be regarded as payment for the GDS Site instead, such evidence was incredible and was therefore rejected;

(5)  While the said $200,000 was recorded by the defendant (by way of a file name in its computer system[1] (“the File” or “the D-16(5) Screen-Cap”)) as a payment for the work done at the GDS Site, there was no evidence that the File had ever been sent to the 1^st claimant. Therefore, it would not have impact on the true nature of the said payment;

(6)  The defendant was liable to the claimants partly for their claims;

(7)  Since the sum of $200,000 paid on 28 March 2024 related to the AMC Site rather than the GDS Site, it should not be set off against the claimants’ claim herein.

11.The defendant then applied for a review of the award pursuant to section 31 of the Labour Tribunal Ordinance (Cap.25, Laws of Hong Kong) (“the Ordinance”).  In support of the review, the defendant argued, inter alia, that it was wrong for the Tribunal to disregard the File of the defendant and hold that the payment of $200,000 was made for the AMC Project, particularly when the Tribunal had relied on records of the same nature to decide on the amount of money which the defendant had ever paid the 1^st claimant.

12.The defendant’s review was dismissed on 19 January 2026 for various reasons.  As far as the $200,000 payment was concerned, it was held that:

(1)  The Tribunal was not obliged to accept the information contained in the D-16(5) Screen-Cap in its entirety irrespective of other evidence;

(2)  The original determination concerning the purpose of the $200,000 payment was supported by the WhatsApp communications between the 1^st claimant and Mr Hu.

C.   THE GROUNDS OF APPEAL

13.Ultimately, the sole proposed ground of appeal[2] relied on by the defendant was in relation to the said payment of $200,000.  It was said that the learned Deputy Presiding Officer had failed to:

(1)  discharge his statutory duty to investigate the nature of the payment;

(2)  assess or test the 1^st claimant’s case with reference to the test of consistencies/inconsistencies with contemporaneous documents.

D.   THE RELEVANT PRINCIPLES

D1.  Leave to appeal

14.Section 32(1) of the Ordinance provides that:

“If any party is dissatisfied with an award, order or determination by the tribunal on the grounds that the award, order or determination —

(a)  erroneous in point of law; or

(b)  outside the jurisdiction of the tribunal,

such party may […] apply to the Court of First Instance for leave to appeal and the Court of First Instance may grant such leave.”

(Emphasis added)

15.It is trite that leave to appeal shall not be granted unless the Court is satisfied that the intended appeal has a reasonable prospect of success.  A “reasonable prospect of success” means an appeal with prospects that are more than fanciful without having to be probable: SMSE v KL [2009] 4 HKLRD 125, at [17].

D2.  Duty to investigate

16.Section 20(3) of the Ordinance further provides that:

“The presiding officer shall investigate any matter which he may consider relevant to the claim, whether or not it has been raised by a party.”

17.This duty to investigate has been explained in numerous authorities.  Mr Fong for the defendant had referred this Court to the case of Poon Shing Hin v Li Wai Chun Transportation Company Limited [2024] HKCFI 2564 in which the relevant principles had been set out as follows:

“26. It is well-established that Labour Tribunal proceedings are inquisitorial in nature and that a Presiding Officer is under a duty to investigate: see Chan Suk Bing Angie v Harbour Phoenix Ltd [1992] 2 HKC 459, per DHCJ Jerome Chan (as he then was) at p 462B-C.  A Presiding Officer errs in law if he/she fails to discharge that duty properly, and it is open to an appellate court to consider if the Presiding Officer had discharged that duty by investigating a relevant matter which ought to have been investigated (see p 462F-G).  An appellate court should intervene if the Presiding Officer’s lack of investigation gave rise to injustice, in that a fair and proper determination of the claim could not be attained (see p 462I).

27. The rationale for this is that in Labour Tribunal proceedings, parties act in person without the benefit of legal representation.  As explained by Waung J in Leung Wan Kee Shipyard Ltd v Lik Shau Foo [1995] 3 HKC 229 at pp 233HI-234A:

‘There is a duty on the presiding officer to investigate all matters on his own volition and direct the parties to the right issues and seek from them the relevant material and evidence. I, of course, appreciate that this is an onerous duty but this is what the law demands and bearing in mind that lay people with very little or no knowledge of the law are regularly before the Labour Tribunal, I do not see how the law can demand any less from the Tribunal.’

28. In Ng Ming v Cheung Wah Investment Co Ltd, HCLA 10/2003 (unrep, 13/06/2003), DHCJ Lam (as Lam PJ then was) observed that:

(1) Section 14 of the Ordinance lays down a procedure of inquiry conducted by a Labour Tribunal officer by which the parties are required to go through a process of preparation and investigation of their respective cases prior to trial.  In particular, section 14(4) gives extensive power to the Tribunal officer for the purpose of such inquiry, including the recording of statements from witnesses and requiring the production of relevant documents (see §10).

(2) Hence, by the time a case comes for trial before a Presiding Officer, he/she is entitled to work on the basis that a party has included the substance of the evidence of witnesses in their statements and that relevant documents have been produced (see §11).

(3)  If the Presiding Officer discerns that there are relevant matters which the parties have not explored, he/she is obliged by section 20(3) of the Ordinance to look into it and should invite the parties to comment and guide (and if necessary, direct) them to produce further evidence or documents (see §11).”

18.The above authority emphasised the Presiding Officer’s positive duty to investigate.  However, it is also important to bear in mind that such a duty is not absolute, in that the Presiding Officer is not obliged to investigate all matters raised by the parties.  It all depends on the individual circumstances of the case.  Ultimately, the yardstick is whether any injustice has been caused by the failure to investigate and that a fair and proper determination of the claim cannot be attained.  In this regard, what Deputy High Court Judge Jerome Chan (as he then was) said in Chan Suk Bing, Angie v Habour Phoenix Limited & Another [1992] 2 HKC 459 at 462D – 463F is instructive:

“[…] The requirements of justice in a judicial system such as the tribunal is such that the presiding officers are required to assume an active inquisitive role in the proceedings. I accept, as Mr Lin for the Respondents suggests, that such a statutory duty is not an absolute one in the sense that the presiding officers do have a ‘discretion’ in the matter. They are only bound to investigate matters they ‘may consider relevant’. However, I reject Mr Lin's contention that such ‘discretion’ is an absolute one and is not susceptible to interference by an appellate court. Notwithstanding the prohibition against reversal or variance of determinations of facts under s.35 (2) of Cap 25, I do not accept Mr Lin’s submission that the presiding officers’ determination of the ‘relevance’ of a matter for the purpose of discharging their statutory duty to investigate is a matter not open to the appellate court. Firstly, very often, as in the present case, no conscious express determination of relevance would be made by the presiding officers; in which case no question of any prohibition under s.35(2) can arise. It is then for the appellate court to determine if the matter alleged is a relevant matter which ought to have been investigated. Secondly, the relevance of a matter would inevitably depend on the issues of law and facts involved. The application of legal principles, or the failure to do so, in reaching a determination on the relevance is a matter upon which an appeal can lie.

It is obvious that not every failure to investigate a relevant matter will give rise to an appeal for a failure to discharge a statutory duty. 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. All the circumstances of the case as well as all other findings of fact must be given all due regard before such a complaint can be upheld. Further, not only is the total absence of investigation a ground for complaint, totally inadequate or useless investigation which amount to no investigation at all will also suffice. It is, however, never sufficient for the appellate court to conclude that it would have preferred to approach the matter differently, or that there is a better way to investigate the claim. It is not open to the appellate court to prefer its own views to that of the presiding officers as to the manner of investigation. To suffice, it must be a clear and obvious case that the inadequacy of the investigation will render an ordinary reasonable man on the tram to Shaukiwan to conclude that injustice has resulted in that a fair and proper determination of the claim cannot be attained.

A complaint of a failure to discharge the statutory duty to investigate is not to be confused with an attack on a finding on the basis that it is contrary to the weight of evidence. The latter is not a ground for appeal for a labour dispute in the tribunal. The insufficiency of evidence to support a finding, or the inconsistency of a finding with the evidence, are matters that the appellate court can properly take into account to determine whether there has been a failure to conduct any or any adequate investigation of material facts relevant to such a finding. But that is as far as the relevance of these matters go in relation to the failure to discharge the statutory duty. They do not per se prove a failure to discharge the statutory duty. They are only matters which may give rise to a need for further investigation before a determination should be made. If there has been a proper and adequate investigation of the claim, no complaint can be made against any such findings of fact.”

(Emphasis added)

E.   DISCUSSION

E1.  Failure to investigate

19.In relation to the defendant’s complaint that the learned Deputy Presiding Offer had failed to investigate the nature of the $200,000 payment, Mr Fong submitted that the intention of the parties and how the payment was in fact distributed by the 1^st claimant should have been investigated.  Counsel further elaborated his arguments as follows in his skeleton submissions:

“37. […] it is submitted that the Deputy Presiding Officer failed to take into account the relevant considerations that, at the time when the Subject Payment was transferred, it was the Parties’ intention that it would be applied to the workers’ wages and expenses at the GDS Site. On 28 March 2024, R1 issued two invoices relating to the wages and expenses arising from the GDS Site for January and February 2024. On the same day, the Subject Payment was transferred by the Appellant to R1. By logical inference from the conduct of Mr. Hu, at the time of the transfer of the Subject Payment, it was his intention to pay the two said invoices: see the Transcript.  However, the Parties’ intention at the time of transferring the Subject Payment was not taken into consideration in the Determination: see §§44-53 of the Determination.

38.  Furthermore, the Deputy Presiding Officer failed to investigate how R1 actually distributed the Subject Payment as well as the Prior Payments. Similar to the circumstances of the Prior Payments, R1 did not provide any explanations or contemporaneous documents concerning the distribution. If the Subject Payment and/or the Prior Payments, or any part thereof, were retained by the Respondents for covering their own wages incurred at the GDS Site, such amount should have been applied to set off the claim in the proceedings below. Otherwise, R1 and/or R2 would be doubly compensated by the Tribunal’s award.”

20.Insofar as it is argued that the learned Deputy Presiding Officer had failed to consider the intention of the parties as at 28 March 2024, this submission had, with respect, unrealistically disregarded the WhatsApp communication between the parties on 5 April 2024, by which it was agreed that the $200,000 payment should be regarded as payment made towards the AMC Project.  This would render the intention of the parties as at 28 March 2024 irrelevant.

21.Neither do I think it is necessary for the learned Deputy Presiding Officer to look into the actual distribution of the money, when there was an express agreement between the parties as to the purpose of the payment.

22.Hence, there is no doubt that the lack of investigation in the aforesaid aspects of the case did not bring any injustice.

23.It is therefore concluded that this ground has no reasonable prospect of success.

E2.  Failure to test the 1^st claimant’s case

24.In relation to this ground, it was submitted that:

“[…] by applying the legal principles in Chan Chi Ling Elwybn, it is respectfully submitted that the Deputy Presiding Officer failed to assess or test the R1’s case with reference to the test of consistencies/inconsistencies with contemporaneous documents, such as R1’s subsequent payment records to other workers of the AMC Project and GDS Site. Such omission amounts to failure to discharge the duty to investigate.”[3]

25.With respect, this submission is not understood, for the learned Deputy Presiding Officer had done exactly that: he had tested the 1^st claimant’s case by reference to the contemporaneous documents, namely, the WhatsApp messages exchanged on 5 April 2024, which in fact were produced by Mr Hu.

26.If there was an express agreement between the parties as to how the payment should be treated, that would be the end of the matter. 

27.Hence, I hold that this ground has no reasonable prospect of success.

F.   CONCLUSION

28.By reasons of the aforesaid, I dismiss the defendant’s application for leave to appeal.

G.   COSTS

29.I make no order as to costs. 

Mr John Fong, instructed by Patrick Mak & Tse, for the defendant