Nkasu, Michael Mmaama v. City University of Hong Kong
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HCA007982/1996 HCA 7982/1996 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CIVIL ACTION NO. HCA 7982 OF 1996 _______________
________________ Coram: Hon V. Bokhary J in Court Dates of Hearing: 8-11, 14-17, 28-29 February & 3 March 2000 Date of Judgment: 27 March 2000 _______________ J U D G M E N T _______________ INTRODUCTION I will refer to the plaintiff as "Dr Nkasu", and to the defendant as "City University". From the beginning of 1990 to late 1995, Dr Nkasu was in the employ of City University as an academic in its Department of Manufacturing Engineering. Following his first appointment, there were two re-appointments, the last one by a letter dated 4 May 1993 re-appointing Dr Nkasu on superannuable terms. 1. In April 1994 City University received a complaint about Dr Nkasu. A Committee of Inquiry was convened, found the complaint proved, and imposed on Dr Nkasu dismissal without forfeiture of benefits. Dr Nkasu appealed to the Appeal Authority. 2. The Appeal Authority gave its decision on 15 November 1995. Insofar as Dr Nkasu sought to retain his job, his appeal failed. But it succeeded to the extent set out in the penultimate paragraph of the Appeal Authority's decision which reads:
3. Section G2 of Part G of the contract of employment (in which City University is referred to as the Polytechnic and the employee, in this case Dr Nkasu, is referred to as the Appointee) reads as follows:
4. The City University then terminated Dr Nkasu's employment without cause, saying that it would give him three months' salary in lieu of notice. This was done by a letter dated 16 November 1995 ("the termination letter") to Dr Nkasu from the Acting Head of City University's Personnel Office. This is how it was put in the opening paragraph of that letter:
5. The termination letter then deals with what it called "the arrangements" concerning Dr Nkasu's "termination of employment". It deals with these arrangements under 10 sub-headings. 6. Dr Nkasu and City University disagreed over what he was entitled to receive upon such termination. This disagreement led to proceedings commenced by Dr Nkasu against City University in the Labour Tribunal. These proceedings were transferred to the High Court, and are now before me. 7. Although section G2 of Part G of the contract of employment and the termination letter speak of salary in lieu of notice, it is common ground between the parties that what Dr Nkasu is entitled to is wages in lieu of notice, the termination of his contract being covered by section 7 of the Employment Ordinance, Cap. 57, which provides in subsection (1) that "either party to a contract of employment may at any time terminate the contract without notice by agreeing to pay to the other party a sum equal to the amount of wages which would have accrued to the employee during the period of notice." Dr Nkasu does not dispute the adequacy of the three months' notice period given to him pursuant to the Appeal Authority's recommendation. 8. "Wages" is defined in section 2(1) of the Employment Ordinance. At the time material to the present case, that definition reads as follows:
ELEVEN HEADS OF CLAIM 9. Dr Nkasu's claim falls under 11 heads of claim. I will deal with these one by one, each under a separate sub-heading. It is convenient to arrange them in the following order even though it is not the precise order in which they appear in the prayer to Dr Nkasu's Amended Statement of Claim ("the Prayer"). First head of claim 10. This head of claim is item (a) of the Prayer. It is for $73,762.50 agreed as the sum which Dr Nkasu would have been entitled to in respect of Vacation Leave earned but not used if, contrary to City University's case, such leave does not stand forfeited. 11. Dr Nkasu had 35 days of unused vacation leave from his 1 July 1991 - 30 June 1993 tour which was carried forward to his 1 July 1993 - 30 June 1995 tour. 12. City University's case is that such unused vacation leave was forfeited on 23 August 1995 by the Personnel Office's internal memorandum of that date to Dr Nkasu. On 25 August 1995, Professor Tso the Acting Head of Dr Nkasu's department gave Dr Nkasu permission to carry forward the unused vacation leave in question for it to be cleared by the summer of 1996. Professor Tso said in evidence that he was unaware that the unused vacation leave in question had been forfeited by the Personnel Office. As it happens, however, the 23 August 1995 internal memorandum shows on its face that it was copied to the Acting Head of Dr Nkasu's department i.e. Professor Tso. 13. City University says that Professor Tso had no power to reinstate what the Personnel Office had forfeited. Dr Nkasu says, first of all, that the Personnel Office had no power to forfeit. Paragraph D. 3.8 of the leave guidelines forming part of the contract of employment provides that:
14. Reading that literally, forfeiture is automatic thereunder. There is no need for the Personnel Office or anyone else to forfeit specifically. But automatic forfeiture immediately after 30 June 1995 is not City University's case. They rely on forfeiture on 23 August 1995 by the internal memorandum of that date. This shows that things are not as clear cut as Paragraph D. 3.8 may make them seem on its face. 15. Dr Nkasu's case is that other provisions of the contract of employment came into play. One of these is Paragraph C. 1 of the leave guidelines which provides that "staffing requirement will take precedence over all considerations in all matters concerning leave." This paragraph continues to provide that Department Heads should ensure that staff members "are not given approval to take leave if they are required for course validation visits, any internal and external meetings, or any inter-/intra-departmental meetings etc." 16. In my view, either upon the true construction of the relevant provisions or by necessary implication, Dr Nkasu was required to stay in Hong Kong to deal with the disciplinary enquiry against him. Accordingly he could not have taken the unused leave during the 1 July 1993 - 30 June 1995 tour. 17. For the purposes of the Personnel Office's authority to forfeit leave, City University relies on an internal memorandum dated 26 June 1994 from the Acting Head of the Personnel Office to all Academic and Equivalent Administrative Staff. I doubt if this document can form part of Dr Nkasu's contract of employment. In any event, I do not see that forfeiture would have been justifiable under the contract under the circumstances which I have mentioned since Dr Nkasu had to remain behind to deal with an enquiry at which, I might mention, City University sought his dismissal only to have dismissal overturned on appeal to the Appeal Authority which substituted termination without cause instead. 18. Even if it was open to the Personnel Office to forfeit, I would hold that as a matter of contract between City University and Dr Nkasu, City University would be bound by the Acting Head's permission given on 25 August 1995. After all the memo had been copied to Professor Tso, I think it probable that when he gave evidence, he had forgotten that he had been made aware of what the Personnel Office had done. In any event, Dr Nkasu cannot be affected by any subjective breakdown of communication. 19. The first head of claim succeeds. I award Dr Nkasu the sum agreed subject to liability i.e. $73,762.50 under this head of claim. Second head of claim 20. This head of claim is item (k) of the Prayer. It is for $326,829.87 in respect of benefits claimed by Dr Nkasu for the three-month period in respect of which City University made payment in lieu of three months' notice. Both the figure and liability are in dispute. 21. A number of sub-heads of claim were made under this head of claim. Eleven of these sub-heads are now pursued. This head of claim is made under item (k) of the Prayer. Item (k) of the Prayer refers to item 14 of the Statement of Claim. Of the eleven sub-heads in question, only ten appear in item 14 of the Statement of Claim. The one which does not is the one for $25,125.00 in respect of travelling expenses. These expenses relate to the sort of thing I deal with under the tenth head of claim. For the reasons which I will give when I come to the tenth head of claim, I would reject this sub-head even if there were no pleading deficiency. 22. I turn now to the ten sub-heads which do appear in the Statement of Claim. These they are stated in the following way:
23. In my judgment, Dr Nkasu is entitled to recover under sub-heads #1 and #2. I reject City University's argument that there can be no entitlement unless and until the relevant tour of duty is completed, and that an employee can be deprived of anything and everything by termination without cause even when the tour is just about to be completed. My reasoning in this regard will appear more fully when I deal with the eighth head of claim later on. As for City University's argument that the contract of employment makes no provision for pro-rata recovery, the answer is as follows. First of all, the greater includes the lesser, so there is nothing in principle against pro-rata recovery even in the absence of express reference. Also if pro-rata recovery is not possible, then we would get back to the idea that employees can be deprived by an eleventh-hour termination without cause. That is an idea which I reject. 24. In my judgment, Dr Nkasu succeeds under sub-heads #3 and #5. City University argued that these sub-heads are excluded from the statutory definition of "wages" because of the exclusion contained in paragraph (c) of the definition of "wages" as that definition in section 2(1) of the Employment Ordinance stood at the material time. Paragraph (c) covers "any travelling allowance or the value of any travelling concession". City University says that sub-heads #3 and #5 are travelling concessions. In my view, they are travelling allowances. I do not propose to depart from Jerome Chan J's statement in New Bright Industrial v Wong [1995] 2 HKC 357 at page 362 D - E that travelling allowance in s. 2(1) means "an allowance payable in respect of expenses or payments incurred in or made in connection with travelling to and from his place of work". 25. As far as sub-head #4 is concerned, however, these are expenses which I reject for the same reasons as those which I will give later on when rejecting the claim for travelling expenses under the tenth head of claim. 26. I reject the claim under sub-head #8. In my judgment, this sub-head is for "the value of accommodation" which is something excluded from the definition of "wages" by paragraph (a) of that definition in section 2(1) of the Employment Ordinance. The reason why this sub-head is "the value of accommodation" is that City University was the tenant of the premises which they then provided to Dr Nkasu. The paragraph (a) exclusion has been commented upon in 10(2) Halsbury's Laws of Hong Kong, para 145.O61 at the end of footnote 4. That paragraph has always read in the same way, so we need not trouble with the fact that Halsbury was written long after the time relevant to the present case. Halsbury's comment is that the paragraph (a) exclusion relates to the value of "payments in kind". Since City University was the tenant and merely housed Dr Nkasu in the flat, his housing was payment in kind. 27. Turning to sub-heads #9, #10 and #12, I have already rejected City University's argument that nothing is due until the whole tour has been completed and that pro-rata recovery is not possible. Accordingly, I award Dr Nkasu what he claims under sub-heads #9, #10 and #12. 28. As to sub-head #12, I will add that here there is no question of claiming for a fraction of a month, so this differs from the situation which I will deal with under the third head of claim. 29. This leaves only sub-head #11 where City University advanced an argument in addition to the argument that nothing is due until the whole tour has been completed and that pro-rata recovery is not possible. This additional argument is that the education allowance is also payment in kind and therefore excluded by paragraph (a) of the statutory definition of "wages". I reject City University's argument that education allowance is payment in kind. It was not provided by City University. It was provided by a school. City University was merely the paymaster. I award Dr Nkasu what he claims under sub-head #11. Third head of claim 30. This head of claim is item (c) of the Prayer. It is for $6,744.00 which Dr Nkasu says that City University should have included in the payment which it made to him. It represents a $1,686.00 deduction from his salary and a matching threefold contribution of $5,058.00 by City University in respect of superannuation. It is agreed that the figure of $6,744.00 is correct. The dispute is over whether it should have been included. 31. City University has taken a pleading point here. The point may have substance in so far as Dr Nkasu has to pursue his claim for a threefold matching contribution from City University. But where the deduction made by City University from Dr Nkasu's salary is concerned, it is City University which has to justify the deduction. Dr Nkasu does not have to plead any more than the mere fact of the deduction. Appendix A to the contract of employment contains these provisions under the heading of "3. CONTRIBUTIONS":
32. Payment to the Trustees (which is what City University had made) is one thing. Eventual payment out to employees is another. Given the last five words of the definition of "Scheme Service", I do not think that payment out in respect of fractions of a month are to be made. By the same token, I hold that deductions cannot be maintained for a fraction of the month. Deductions are made for the sole purpose of being matched threefold by City University. They cannot be maintained without any matching contribution. Under this head, I award Dr Nkasu $1,686.00. In other words, this head of claim succeeds to the limited extent of Dr Nkasu's own contribution. Fourth head of claim 33. This head of claim is item (d) of the Prayer. It is for $11,985.93 which City University deducted from the payment which it made in lieu of notice. $5,531.96 was deducted on the basis that the education allowance paid by City University in respect of both sons could be recouped by City University for the period after Dr Nkasu's employment was terminated. The balance in the sum of $6,453.96 in relation to the elder son for the period from 4 August 1995 to 16 November 1995 has been conceded as being wrongly deducted. 34. As far as the deduction of $5,531.86 is concerned, City University concedes that this deduction would have been wrong if education allowance is not excluded from wages in lieu of notice. I have already said, when dealing with the second head of claim that education allowance is not so excluded. Accordingly, I award Dr Nkasu the full amount which he seeks under the fourth head of claim, namely the $11,985.93 which he claims. Fifth head of claim 35. This head of claim is item (f) of the Prayer. It is for $50,000.00 paid by City University to a travel agent for Vacation Leave Passages for parents and School Passages for children. This was in respect of trips that the parents and the children had planned to make before the time when Dr Nkasu's employment was terminated, but which trips had not been made because of the complaint and the children's examinations. It is common ground between the parties that this sum was paid by City University to the travel agent. The dispute is whether Dr Nkasu is entitled to this or any other sum under this head of claim. In the alternative to his claim for $50,000.00 under this head of claim, Dr Nkasu claims $39,479.38 thereunder. 36. The first defence by which City University resists this head of claim is that Dr Nkasu has lost these passages because they were unspent through his own fault. In my judgment, this cannot be said because Dr Nkasu stayed in Hong Kong to fight against dismissal, and he has succeeded to the extent that he was eventually terminated without cause. That success involves a good deal of money, and it also involves Dr Nkasu's reputation. I reject this first defence. 37. The second defence is a partial defence to the effect that the children's entitlement has not accrued. The regulations relied upon by City University are complex in its application to the present situation if City University's argument here is correct. In my view the contractual position is simpler than that. The money having been paid to the travel agent in respect even of the children, the parties to the contract had treated the children's entitlement as accrued. The money has been spent and the passage allowance paid for by that money is not unspent in the sense of the regulation relied upon or indeed in any other sense. I award $50,000.00 under this head of claim. Sixth head of claim 38. This head of claim is item (g) of the Prayer. It is for $44,089.50 in respect of Baggage Allowance for the parents' trips under the fifth head of claim. The figure is agreed as a figure subject to liability. 39. This head of claim clearly follows the fifth head of claim. That claim succeeded. So this one also succeeds. Seventh head of claim 40. This head of claim is item (l) of the Prayer. It is for $51,980.00 claimed in respect of the Air Passage and Air Baggage Allowance for bringing the children from Sydney to Hong Kong for the whole family's return together from Hong Kong to Port Harcourt. Both the figure and liability are disputed. 41. Looking at paragraph 1.1 of Appendix E, one sees in regard to repatriation that City University "shall provide the Appointee and his Family with Standard Passages from Hong Kong to the Stipulated Place". What about children who are studying somewhere other than Hong Kong or the Stipulated Place? There is no express provision anywhere in the contract of employment saying that City University has to provide passage to bring them to Hong Kong in order to join their parents here for repatriation from Hong Kong to the Stipulated Place. It may be very reasonable for there to be a provision that the expense of such a trip fall on City University rather than on Dr Nkasu himself. But I could not read such a provision into the contract just because it would be reasonable for there to be such a provision. 42. It is necessary for the children to make a trip from Sydney to join their parents in Hong Kong. But it is not necessary that City University pay for that trip. That City University should pay for it is reasonable. But I cannot say that it is necessary or that it is of any of the other things which a term has to be before it can be implied. In any event, counsel for Dr Nkasu is not relying on implied term. He says that he can get this head of claim upon the true construction of the express provisions of the contract of employment. But I do not see how he can. This head of claim fails. Eighth head of claim 43. This head of claim is item (b) of the Prayer. It is for $88,000.00 claimed in respect of the Air Passage for the whole family (parents and two sons) from Hong Kong to Port Harcourt. The figure of $88,000.00 is agreed as a figure subject to entitlement. 44. I have already quoted section G2 of Part G of the contract of employment. Sub-section G2.2 provides that the Appointee shall not be eligible for standard passage or baggage allowance if he, the Appointee himself, terminates the appointment before completion of the full Period of Duty. This suggests at once that the Appointee is eligible for standard passage and baggage allowance if City University does the terminating. And this is confirmed by sub-section G2.3 which provides that in the event of termination by City University, the Appointee shall be provided with the benefits under Sections F1, F2, F6 and F7 of the contract of employment where applicable. In my view, the words "where applicable" are there because the benefits under Sections F1, F2, F6 and F7 are applicable to some but not all City University's employees. 45. I turn new to sub-section F6 of the contract of employment which provides as follows:
46. Counsel for City University places particular reliance on sub-section F6.1(ii). He argues that standard passages are not available save on satisfactory completion of the Period of Duty, and that satisfactory completion means working for the whole period. He says that City University would be entitled to terminate an employee without cause as late as one day before the last day of the Period of Duty and thus deprive even a blameless employee of his standard passage, at the eleventh hour. 47. Sub-section G2.3 and sub-section F6.1(ii) must be read together. Once they are read together it can be seen that City University's argument here cannot be right. Sub-section G2.3 deals with entitlement under, inter alia, section F6 where City University terminates an appointment. By definition such termination means that the appointment ends before the employee has worked for the whole of the Period of Duty in question. If City University's argument here is correct, sub-section G2.3 is robbed of all meaning and substance. Reading the relevant provisions as a whole, it is clear that the requirement of satisfactory completion of the Period of Duty does not operate to defeat an employee who has not been terminated for cause and who has worked for as long as City University has permitted him to work. 48. Dr Nkasu succeeds under this head of claim, and I award him $88,000.00 thereunder. Ninth head of claim 49. This head of claim is item (e) of the Prayer. It is for $58,484.58 claimed in respect of the Air Baggage for the repatriation of the whole family (parents and two sons) from Hong Kong to Port Harcourt. Neither entitlement nor the figure itself as a figure is agreed. 50. Baggage Allowance claimed under this head of claim is payable by City University in conjunction with passages claimed under the eighth head of claim. One sees this from Section F 7 of Part F of the contract of employment. This section reads as follows:
51. Dr Nkasu claims $58,484.50 under this head. He claims it as the costs in respect of 140 kilos baggage allowance. Initially City University disputed that the 40 kilos claimed in respect of the children were payable. Eventually however City University accepted that not only the 100 kilos claimed for the parents but also the 40 kilos claimed for the children were allowable subject to two defences to which I will come in a moment. Dr Nkasu has produced evidence that the costs in respect of 140 kilos is the $58,484.50 claimed under this head of claim. I accept that evidence. And I now turn to the defences raised. 52. The first line of defence under this head is that baggage allowance, being payable in conjunction with standard passage, is not payable since standard passage is not payable. I have already decided that standard passage is payable. Accordingly this first line of defence fails. 53. The second defence is that baggage allowance is only payable on the basis of reimbursement upon production of receipted bills covering the full amount claimed. There is no doubt that the relevant regulations do provide for payment of baggage allowance only on the basis of reimbursement upon production of receipted bills covering the full amount claimed. But the provisions to that effect go hand in hand with fulfillment by City University of its contractual obligation in regard to standard passage. 54. In the present case, there could be no receipts because the journey was not made. The reason why the journey was not made was City University's failure to honour its contractual obligation to provide standard passage. Therefore to let City University defeat this claim on the basis of this defence would be to let City University take advantage of its own wrong. It is clear from principle and authority (see the decision of the House of Lords in Alghussein Establishment v Eton College [1988] 1 W. L. R. 587) that City University is not entitled to take advantage of its own wrong in that way. Another way of putting it is that receipts are appropriate for reimbursement in the normal way, but this is not a claim for reimbursement in the normal way. This is a claim for damages for breach of contract. This defence fails. 55. In the result, I award Dr Nkasu what he claim under this head, namely $58,484.50. Tenth head of claim 56. This head of claim is for $12,000.00. It represents that part of item (j) of the Prayer which Dr Nkasu still claims. Originally item (j) was for $135,000.00 in respect of Travelling Allowances. It has been reduced to $12,000.00 because Dr Nkasu now claims only in respect of travel within Nigeria. Even this reduced figure of $12,000.00 is disputed both as a figure and as to liability. 57. The claim for $12,000.00 is based on three notional trips. Two of them are in the form of a set of return trips which would have been made if a vacation which in fact had not been taken had been taken. The third trip is the repatriation trip. Five items are involved being the same items at the same costs for each notional trips. These items are:-
58. The customs duty and tips are plainly not recoverable. The other items are of the types which may be recoverable. But the evidence about them were vague and confusing. Moreover the way that this claim was buried within the original claim i.e., the inflated claim for $135,000.00 made it impossible for City University's counsel to be prepared to meet this lesser claim. In my judgment, nothing has been made out under this head of claim, and I reject it without having to consider the other defences raised by City University to this whole head of claim originally in the inflated figure of $135,000.00. In the result, I award nothing under this head of claim. Eleventh head of claims 59. This head of claim is item (h) of the Prayer. It is for $83,680.80 claimed in respect of Sea Baggage Allowances for the repatriation of the whole family (parents and two sons) from Hong Kong to Port Harcourt. The figure is agreed as a figure subject to liability. 60. Three defences to the claim under this head are raised. The first is similar to the first defence raised to the baggage allowance claimed under the ninth head. It is that sea baggage allowance, being payable in conjunction with standard passage, is not payable. I have already decided that standard passage is payable. Accordingly this line of defence fails here just as it did in relation to the ninth head of claim. 61. The second line of defence here is the same as the second line of defence under the ninth head of claim i.e. the one about reimbursements upon production of receipts. It fails here just as it did there. 62. The third line of defence is that there is no evidence that Dr Nkasu would have incurred expenses in this connection. But this is simply not so. There is Dr Nkasu's evidence. Dr Nkasu put forward a figure. Looked at realistically he could only have been doing so on the basis that he would have incurred expenses amounting to that figure. Any other view would be frivolous. That figure was accepted. To say that there is no evidence that expenses in that figure would have been incurred is to be unrealistic. This third defence fails. 63. Accordingly, I reward Dr Nkasu $83,680.80 under this head of claim. Reference/Clearance Letters 64. One other head of claim had been included in the Prayer. It was item (i) of the Prayer and was for an order that City University provide Dr Nkasu with Reference/Clearance Letters. Counsel for Dr Nkasu did not address me on this item, and in any event I do not see how I could order City University to give Dr Nkasu a letter saying about him what they do not believe about him. I make no such order. CONCLUSION 65. Leaving aside interest and costs for the moment, I award Dr Nkasu $521,193.81 damages made up as follows:
I will now hear the parties on interest and costs.
Representation: Mr Ashok K Sakhrani, instructed by Messrs Fok & Johnson, for the plaintiff Mr Tommy Chung, instructed by Messrs Johnson Stokes & Master, for the defendant. |
Cases cited in this judgment