Re Lee Tang Wan t/a Tung Loi Restaurant

Case No.HCB 85/1980

Court

HCB

Date—

Judge—

Case Document

100%Judiciary

HCB000085/1980

S.7 of the Labour Tribunal Ordinance - Exclusive jurisdiction of the Tribunal in a "claim for a sum of money which arises from a breach of a term of a contract of employment and failure to comply with the provisions of the Employment Ordinance" - High Court in bankruptcy held to have no jurisdiction in such a claim and thus no jurisdiction to entertain the issues framed with a view to adjudicating thereon.

IN THE SUPREME COURT OF HONG KONG

IN BANKRUPTCY NO. 85 OF 1980

	RE: LEE TANG WAN and CHU KAU CHI trading as Tung Loi Restaurant Co.
	EX PARTE: LAM LAP alias CHAN KOK CHAT,

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Coram: Liu, J. in Chambers.

Date of Judgment: 4th March 1981

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DECISION

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1. The petitioner seeks a receiving order in bankruptcy on the ground that the alleged debtors have given notice to suspend payment of their debts. The petition was presented on the premise that the alleged debtors were indebted to the petitioner in the aggregate of $21,750 by way of arrears of wages and wages in lieu of notice of dismissal.

2. One of the alleged debtors, Mr. LEE Tang-wan has served a notice of his intention to appear and oppose the petition. In addition to his denial of any suspended payment of debt, the opposing alleged debtor refuted any employer/employee relationship and, if such relationship did exist, challenged the quantum claimed.

3. At the hearing of the petition on the 7th November, 1980, it was ordered by consent that issues be framed for determination by a single judge without a jury in Chambers. Whatever the grounds given in opposition are the petitioning debt is evidently supported by "a claim for a sum of money which (arose) from the breach of a term of a contract of employment" and from the alleged debtors' "failure to comply with the provisions of the Employment Ordinance". The dispute on the petitioner's claim resolved itself into the two basic issues framed by consent pursuant to s.9(5) of the Bankruptcy Ordinance. It was on these framed issues that the validity and extent of the petitioner's claim were to be adjudicated. These framed issues are reiterated below:

"	(1)	Whether Mr. LEE Tang-wan was an employer of the petitioning creditor at the material times and
	(2)	Whether Mr. LEE Tang-wan was in any way responsible for payment of the petitioning creditor's wages set out in the petition."

4. At the trial of the framed issues, the opposing alleged debtor demurred to the court's jurisdiction on the submission that the validity and extent of the petitioner's claim fell within the exclusive jurisdiction of the Labour Tribunal.

5. S.7 of the Labour Tribunal Ordinance enacts:

	"(1) The tribunal shall have jurisdiction to inquire into, hear and determine the claims specified in the Schedule.
	(2) Save as is provided in this Ordinance, no claim within the jurisdiction of the tribunal shall be actionable in any court in Hong Kong."

6. The Schedule to the Labour Tribunal Ordinance reads, inter alia, as follows:

"1.

A claim for a sum of money which arises from-

	(a)	the breach of a term, whether express or implied, of a contract of employment, whether for performance in Hong Kong or under an overseas contract as defined in the Contracts for Overseas Employment Ordinance:
(a)	(a)	the breach of a term, whether express or implied, of a contract of apprenticeship; or
	(b)	the failure of a person to comply with the provisions of the Employment Ordinance or the Apprenticeship Ordinance."

7. The highest solicitor for the petitioning creditor could legitimately put his submission was, as did Mr. Comerford responsibly, that the petitioner's claim could be but a mere sub-issue of the fundamental question in these bankruptcy proceedings which rested primarily on the commission of an act of bankruptcy. Moreover, so pressed Mr. Comerford, a line of demarcation should be drawn between the nature of such a claim for a sum of money arising from a contract of employment etc. and the denial of the very existence of that contract. It was submitted that the court was enjoined by s.9(2) of the Bankruptcy Ordinance so to inquire into the existence of an employment contract. My attention was further drawn to s.9(5) of the Bankruptcy Ordinance for the procedure laid down for the adjudication of a contested debt and its fountain-head.

8. These two sub-sections are repeated verbatim below:

	"9. (2) At the hearing the court shall require proof of the debt of the petitioning creditor, of the service of the petition and of the act of bankruptcy, or if more than one act of bankruptcy is alleged in the petition, of some one of the alleged acts of bankruptcy, and if satisfied with the proof, may make a receiving order in pursuance of the petition."
	"9. (5) Where the debtor appears on the petition and denies that he is indebted to the petitioner, or he is indebted to such an amount as would justify the petitioner in presenting a petition against him, the court, on such security (if any) being given as the court may require for payment to the petitioner of any debt which may be established against him in due course of law, and of the costs of establishing the debt, may, instead of dismissing the petition, stay all proceedings on the petition for such time as may be required for trial of the question relating to the debt."

9. Proof of claims sounding in debt arising from a breach of contract may be admitted by a trustee in bankruptcy. The two sub-sections deal, inter alia, with these claims when contested. Such claims are to be "established against him (a debtor) in due course of law". But the main thrust of these provisions remains to be: What is the proper forum to which the opposing alleged debtor is amenable on a claim for a sum of money arising from a contract of employment and failure to comply with the provisions of the Employment Ordinance?

10. S.7 of the Labour Tribunal Ordinance expressly reserves jurisdiction for the Labour Tribunal, and a claimant for such a sum of money is barred from the doors of the High Court. The commission of an act of bankruptcy may be founded on an undisputed claim for such a sum of money, but the High Court has been excluded from adjudicating upon the contested validity and extent of it. Whether a contract of employment existed in the instant case was the very seed from which the shoots of the petitioner's claim germinated. Granted that the ultimate issue will be whether an act or acts of bankruptcy had been committed, but the question in the forefront at the hearing of these framed issues is the validity and extent of the petitioner's claim for a sum of money arising from a contract of employment and failure to comply with the provisions of the Employment Ordinance though with these imminent issues, the ultimate consequences in bankruptcy are inextricably linked up.

11. Whatever the contentions advanced on behalf of the opposing alleged debtor may be and whatever the act or acts of bankruptcy relied upon or to be established by the petitioner are, the petitioning creditor's claim has been and remains truly a claim for a sum of money arising from a contract of employment and failure to comply with the provisions of the Employment Ordinance. The adjudication on that very claim is exclusively entrusted to the Labour Tribunal and cannot be entertained in proceedings in the High Court in bankruptcy or otherwise.

12. This court has, on countless occasions in the past, granted a receiving order on a petition based on a claim for wages and payment in lieu of notice. Whenever such a claim is unopposed, it crystalizes into a debt provable in bankruptcy and requires no adjudication. It is by reason of an act or acts of bankruptcy in relation to such a crystallized debt that a receiving order is inevitably granted.

13. In my judgment, this court has no jurisdiction to try the issues as framed with a view to adjudicating on the validity and extent of the petitioner's claim as a worker allegedly of the opposing alleged debtor and another for a sum of money arising from a contract of employment and failure to comply with the provisions of the Employment Ordinance. It is regrettable that the petitioner's hope of a speedy remedy has been so cruelly dashed.

	(B. Liu)
	Judge of the High Court

Representation:

Mr. Comerford of Legal Aid Department assigned for the Petitioner.

Mr. Boarse of Messrs. Robertson, Double Boarse & Co. for the alleged debtor LEE Tang-wan.