Archer, Harold Dean v. The Hong Kong Channel Ltd
Read the full judgment text of FAMV 7/1998 on BabelCite. This Court of Final Appeal judgment was delivered on 21 May 1998 before Litton PJ, Ching PJ, Bokhary PJ.
Civil procedure – leave to appeal to Court of Final Appeal – Hong Kong Court of Final Appeal Ordinance (Cap. 484) s.22(1)(b) – meaning of 'or otherwise' – whether leave may be granted where a clear statutory point was overlooked in the courts below. Employment law – long service payment – Employment Ordinance (Cap 57) s.31R(1)(a) and s.31R(1)(a) read with s.2 definition of 'relevant date' – termination by payment in lieu of notice under s.7 – whether 'relevant date' is date of dismissal or last day of notice period. The applicant, the long-serving managing director of the respondent company, was dismissed by board resolution on 17 June 1995 and paid one month's salary in lieu of notice. Because the written contract contained no termination-by-notice provisions, s.7 of the Employment Ordinance applied, making the 'relevant date' 17 July 1995, which gave the applicant over five years' continuous service and entitlement to long service payment. This clear point, turning on the statutory definition of 'relevant date' in s.2 of Cap. 57, was overlooked by the unrepresented applicant, the trial judge (Deputy Judge Longley), and the Court of Appeal (Nazareth V-P, Liu JA and Cheung J). The Court of Appeal refused leave to appeal to the Court of Final Appeal but expressly left the matter to the CFA, acknowledging the 'or otherwise' discretion in s.22(1)(b). Held (by majority – Litton PJ and Bokhary PJ; Ching PJ dissenting): leave should be granted because the injustice was glaring, the statutory entitlement almost certain, and the amount (approximately HK$84,635 additional) not insignificant; the respondent's late reliance on summary dismissal for misconduct under s.9 had never been pleaded and could not defeat the application at the leave stage. The 'or otherwise' limb of s.22(1)(b) was held capable of encompassing the correction of a clear injustice arising from universal oversight of an obvious statutory provision (per Hui Shiu-wing v Cheung Yuk-lin [1968] HKLR 176). The respondent was put on notice that costs on an indemnity basis might be ordered if it resisted. Costs of the leave application were reserved to the Court of Final Appeal.
Legal issues: Whether leave to appeal should be granted under s.22(1)(b) of Cap. 484 where a clear statutory entitlement was overlooked in the courts below
Outcome: By majority, leave to appeal to the Court of Final Appeal granted to the applicant.
Cited by 2 cases · Cites 1 case
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FAMV No. 7 of 1998 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO. 7 OF 1998 (CIVIL) (ON APPLICATION FOR LEAVE TO APPEAL FROM CACV 155 OF 1997) ____________________
------------- Appeal Committee : Mr Justice Litton PJ, Mr Justice Ching PJ and Mr Justice Bokhary PJ Date of Hearing : 7 May 1998 Date of Determination : 21 May 1998 ------------------------------- DETERMINATION ------------------------------- Mr Justice Litton PJ: Introduction 1. This is the determination, by a majority, of the Appeal Committee on an application for leave to appeal made under section 23(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484. 2. The matter comes before us in unusual circumstances. The amount in dispute is well below $1 million. The question involved in the appeal is not of great general or public importance. What the applicant says is that through oversight on the part of everyone concerned in the courts below an obvious point of law in his favour has been overlooked, resulting in blatant injustice. Section 22(1)(b) of Cap 484 empowers us to give leave if we are of the opinion that the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court for decision. Counsel for the applicant submits that the words "or otherwise" in s22(1)(b) allows us a wide margin of discretion to correct the wrong. The facts 3. The bare facts behind the application are these. The applicant was the managing director of the defendant company, and had been so for many years. He was also a shareholder in the company. At a director's meeting held on Saturday 17 June 1995 a resolution was passed to the effect that the applicant's employment "be terminated immediately". By a second resolution at the same meeting the applicant was "removed as managing director" and someone else was appointed in his place. On 5 July 1995 the company sent a letter to the applicant enclosing a cheque for HK$40,000. The letter said:
4. The company had been in financial difficulties for some time prior to June 1995. The applicant had, on a number of occasions, deferred drawing his salary to enable the company to pay its creditors and was therefore owed salary in arrears at the time of his dismissal. He brought proceedings against the company in the Labour Tribunal but these were transferred to the High Court. Pleadings were ordered. There were claims and counterclaims. The case was tried by Deputy Judge Longley resulting in a judgment in the applicant's favour for $82,356. There was no award of costs in his favour but because the respondent succeeded in its counterclaim (which substantially reduced the award in the applicant's favour) the respondent was given the costs of the counterclaim. The proceedings at first instance 5. At the hearing before Deputy Judge Longley the applicant was unrepresented. Amongst the various heads of claim in his statement of claim he sought an award under s31R of the Employment Ordinance, Cap 57, for long service payment. Under s31R(1)(a) an employee who has been employed under a continuous contract for not less than the number of years of service at the relevant date, as specified in the Fifth Schedule to the Ordinance, is entitled to long service payment. Where the contract of employment is terminated by payment in lieu of notice in accordance with s7, the "relevant date" is defined in s2 as the date up to which the wages are calculated: in the present case, it would be 17 July 1995. Calculated thus, the applicant would have had 5 years' continuous service and would have been entitled to long service payment: But not so if the "relevant date" was 17 June 1995. This point, now glaringly obvious, was not perceived in the trial court. The definition of "relevant date" in section 2 of the Employment Ordinance was overlooked. This error stands in stark outline when it is appreciated that the trial judge proceeded on the basis that the applicant had contractual entitlement to wages in lieu of notice. In dealing with the applicant's contention that his housing allowance entitlement should be treated as part of his "wages" for the purpose of "wages in lieu of notice", the judge said:
6. Had his "contractual entitlement", as defined by statute, been properly calculated, he would have fulfilled the 5-years' continuous service condition and would have succeeded on his long service payment claim. Appeal to the Court of Appeal 7. The applicant, in effect, lost at first instance and as earlier mentioned had costs awarded against him. Being dissatisfied, he appealed to the Court of Appeal. In his notice of appeal dated 16 July 1997 he raised the issue of long service payment. Paragraph 2, as relevant, reads:
8. The hearing before the Court of Appeal took place on 14 November 1997. The applicant remained unrepresented. He failed on his appeal (except for a minor item of claim relating to his leave entitlement for 1995) and was ordered to pay the respondent's costs of the appeal. As regards his claim for long service payment, all that Liu JA said was this:
9. It is not clear from Liu JA's judgment how the employment was effectively terminated on 17 une 1995 unless it was by payment of one month's salary in lieu of notice: In the respondent's pleadings, there was no suggestion that the applicant's contract of employment had been lawfully terminated without notice: for misconduct under s9 of the Employment Ordinance or on any other ground which might have entitled the respondent to terminate the employment without notice at common law. 10. In Nazareth V-P's judgment, dealing with the claim for long service payment, he said this:
11. Plainly, if the definition of "relevant date" in s31R(1)(a) of the Employment Ordinance had been brought to Nazareth V-P's attention, he could not have come to the conclusion as he did. 12. Cheung J's judgment did not touch upon the issue of long service payment. Application for leave to appeal to Court of Final Appeal 13. By notice dated 31 November 1997 the applicant applied to the Court of Appeal for leave under s23(1)(a) to appeal to this Court. The failure of the lower courts to apply correctly the provisions of s31R(1)(a) of the Employment Ordinance was clearly spelt out in his application. This was heard by the Court of Appeal on 19 February 1998. In dealing with that application Nazareth V-P, giving the decision of the Court of Appeal, said:
14. Here, in effect, the Court of Appeal acknowledges that, as between the parties, a glaring injustice has occurred and the applicant has been deprived of a clear entitlement through oversight. Is this something which ought to proceed to the Court of Final Appeal for correction? 15. The Court of Appeal recognised, of course, that s22(1)(b), by the use of the expression "or otherwise", confers a wide discretion. In this regard, Nazareth V-P said:
16. It is in these circumstances that the matter comes to us for determination. The amount involved 17. At first instance, it was admitted by the respondent that substantial arrears of salary were owed to the applicant, but these were set off to some extent against two items in the counterclaim:
18. The applicant failed on both issues of the counterclaim, with the net result that judgment was awarded in his favour only to the tune of $82,356 together with interest. Counsel submits that the award, taking into account the entitlement to long service payment, should have been $166,991: that is to say, an increase of $84,635. This is not an amount which we can, or should, brush aside as of such insignificance as to be undeserving of attention by the Court. If the position were, as the applicant contends, that this additional sum is his by right almost as a matter of certainty, we plainly should give leave: and put the respondent upon notice that, if it should nevertheless resist the claim, the Court in its final adjudication might well be inclined to order costs against it on an indemnity basis. Other factors 19. So far, we have proceeded upon the basis that there is, in effect, no answer to the applicant's point. If the contract of employment were terminated by payment in lieu of notice, under the provisions of s7 of the Employment Ordinance, there is no doubt that the "relevant date" for the purposes of s31R(1)(a) is 17 July 1995. The respondent, through counsel, however, says this: The judge, in adjudicating the respondent's counterclaim, made certain findings of fact adverse to the applicant: which facts, if they had been known to the respondent in June 1995, would have entitled the respondent to dismiss him without notice under s9. Counsel therefore says that we, in weighing the applicant's claim to long service payment, cannot fairly proceed upon the basis that the case comes solely within s7: if, arguably, the facts as found by the trial judge could have brought the case within s9, then the entire foundation for the applicant's argument disappears. 20. We are not convinced by this argument. It seems to have been common ground throughout the proceedings in the courts below that the contract of employment had been effectively (that is to say, lawfully) terminated by one month's salary in lieu of notice. The respondent never pleaded a case of dismissal without notice, based upon any of the grounds set out in s9 of the Employment Ordinance. The judges' adverse comments on the applicant, in relation to his fidelity as an employee, related to the two items of the counterclaim (i) the unauthorised drawing of a housing allowance beyond the contractual entitlement and (ii) the appropriation of a Chinese New Year bonus. There, the issue at trial was whether these matters were expressly or impliedly authorised by the board of directors, as the applicant contended, or were unauthorised as the respondent said. Whether the applicant might have been dismissed for misconduct or some other grounds under s9 was never in issue between the parties. Conclusion 21. We are conscious of the fact that this determination relates purely to an application for leave and any views which we have formed concerning the state of the pleadings or the facts as found by the judge can only be on a preliminary basis. Because of the nature of the proceedings we have discouraged lengthy submissions by counsel. Ultimately, what is for our determination is whether the matter should end right here or proceed further for adjudication by the Court. 22. We have not found this an easy matter. It is possible to have some sympathy for the courts below. The applicant had legal representation for the first time in the hearing before us. The matter has been well argued on both sides. In the courts below, the water was muddied by a large number of issues being stirred: matters which have now become irrelevant, enabling us to see the one remaining issue much more clearly. By a majority, we have concluded that leave to appeal to the Court of Final Appeal should be given to the applicant and we so order. The costs of this application are reserved to the Court of Final Appeal.
Representation: Mr John Wright, instructed by Messrs Robertson Double & Lee for Applicant Mr Lawrence K.F. NG, instructed by Messrs Chui & Lau for Respondent |
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