Chong Hau Sai v. Mok Kuen Shing and Others

HCLA000075/1995

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

(Labour Tribunal Appeal No.75/1995)

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Coram: Hon Mrs Justice Le Pichon in Court

Dates of hearing: 6 & 14 November 1995

Date of judgment: 14 November 1995

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J U D G M E N T

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1. On 6th June 1995, the Presiding Officer allowed the claim of the Claimants for WILON, pro-rata annual leave and end of the year payment and made an award against Chong Hau Sai ("Mr Chong") and Fu Heng Roasted Meat Co. Ltd. (D2). The only appeal before me is that by Mr Chong.

2. In substance the grounds of appeal relied on by Mr Chong are two :

(1) he was not the employer and the award should not therefore have been made against him.

(2) there was evidence given at the hearing as to theft by the Claimants and the Presiding Officer ought to have found that the Claimants were justifiably dismissed.

3. I will deal with the cause of dismissal first since it will affect how the other issue is to be dealt with.

The Cause of Dismissal

4. It is Mr Chong's contention that the employer was justified in summarily dismissing the Claimants because it is alleged that they stole from the employer. I use the word "employer" advisedly because, as will become apparent, it is wholly unclear who the "employer" of the Claimants was.

5. The Claimants are accused of theft. Although these are not criminal proceedings, the burden is on the employer and the standard of proof, though a civil standard based on a balance of probabilities, is nonetheless a high one because of the seriousness of the allegations.

6. Mr Chong was unable to provide any proof of theft himself but relied on a statement provided by a Mr Chan Tsan Lam to the police. In that statement, Mr Chan said he was given a meal allowance of $1,200 in cash once in June and once in July by the 1st Claimant although he also received $300 meal allowance every two weeks when he received his wages. He also claimed that he saw the 1st Claimant take money out of a bucket at the stall.

7. When giving evidence before the Presiding Officer, as is apparent from the Notes of Proceedings, Mr Chan resiled completely from what he had said in his statement. In these circumstances, the Presiding Officer correctly pointed out that Mr Chan's evidence was of no value. He was entitled to come to the view that the witness was unreliable having made wholly contradictory statements. The result is that the employer's allegations of suspected dishonesty on the part of the Claimants remained unsubstantiated.

8. As noted earlier, the allegations involving as they do, acts of a criminal nature, are serious and the standard of proof must be commensurate with the seriousness of the allegation. The learned Presiding Officer was correct in his approach and I affirm his finding that the employer had failed to substantiate the grounds for dismissing the Claimants with cause.

9. I would add that as Mr Chong had ostensible authority to act for the employer whoever he or they might be, the employer is bound by the award made by the tribunal which I have affirmed.

The Identity of the Employer

10. Mr Chong says he was merely in a managerial role. He was not the owner of the business that employed the Claimants and therefore the award should not have been made against him.

11. There were two defendants named in the proceedings before the Presiding Officer. The other defendant was Fu Heng Roasted Meat Co. Ltd. According to the Notes of Proceedings, Mr Chong appeared and represented both defendants. Mr Chong now says that there is no such company registered at the Companies Registry and that he as well as the Claimants worked for a business named Fu Heng Roasted Meat ("Fu Heng"), the name under which the late Mr Tang Wah traded as sole proprietor. Estoppel even if available is of little comfort to the Claimants if there is no defendant against whom the award can be enforced.

12. In his judgment the learned Presiding Officer stated that Tang Wah's business, i.e. Fu Heng, was "taken over" by Mr Chong. The facts upon which that finding was based appear to be no more than an answer to a question put to Mr Chong. Although Mr Chong read out a statement to the Presiding Officer in which it was asserted that the old company (meaning no more than Fu Heng) closed down on 31st August 1994, that statement is not part of the record.

13. The learned Presiding Officer also stated that in October 1994, Mr Chong became a "partner" meaning presumably shareholder in Wan Cheong Roasted Meat Co. Ltd. incorporated on 6th October 1994. Although not stated in so many words, the clear implication is that the business was transferred to Wan Cheong as of 6th October. But Wan Cheong is not a defendant.

14. There is also the difficulty that the parties had apparently agreed before a tribunal officer on 8th March 1994 that after Tang Wah passed away on 3rd June 1994, Fu Heng Roasted Meat Co. Ltd., the 2nd defendant (and it is to be noted, not Wan Cheong) was formed to take over the business and the Claimants continued their employment with the 2nd defendant. It may well be that the wrong company was named and it ought to have been Wan Cheong, but that is not a matter for this court to determine. This appeal by Mr Chong does raise the question whether the proper party has been joined.

15. The Presiding Officer referred to "a period of ambiguity between 1st September and 6th October in which the business just went on without any official owner" except that during this period Mr Chong was in charge. I respectfully disagree. If, as appears to be the case, the business continued without interruption between Mr Tang Wah's death and the date the Claimants were dismissed, the business must have belonged to someone who would have been the employer.

16. Although on an appeal, I have no power to admit further evidence, this is an appropriate case for the matter to be remitted back to the Tribunal for further inquiry. The areas that require further inquiry appear to me to include the following :

(i) whether the 2nd Defendant existed as a corporate entity during the relevant period in 1994;

(ii) whether Tang Wah's estate (meaning his personal representatives) caused the business to be carried on after Tang Wah's death;

(iii) during the period from 3rd June to 18th October 1994, to whom (if anyone) was Mr Chong accountable for the business;

(iv) what facts, if any, support the finding of Mr Chong "taking over the business"; and

(v) whether Mr Chong had a beneficial interest in the business that was carried on between June and the date the Claimants were dismissed and if he acquired an interest at any time, when that occurred.

17. The inquiry is one of fact. A business was being carried on and the Claimants were employees of the owner (de facto or otherwise) of that business. Business Registration certificates and/or applications might throw some light on this question. I therefore direct that the issue as to who the real employer was be remitted to the tribunal for determination.

Order

18. I dismiss the appeal as to liability. The employer is liable to Claimants for the sums awarded.

19. I set aside the award made against Mr Chong and remit the question of who the real employer was to be determined by the tribunal after a further inquiry into the facts.

Representation:

Appellant in person

Respondents in person