Ling Shing Hong Trading As Video Compass v. C1: Chan Chi Kin and Others

IN THE SUPREME COURT OF HONG KONG

LABOUR TRIBUNAL APP. NO. 71/89

(CLAIM NO. W896 OF 1989)

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Coram: Hon. Hooper, J. in Court

Date of Hearing: 27 April 1990

Date of Delivery of Judgment: 7 May 1990

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J U D G M E N T

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1. This is an appeal under section 32 (1) (a) of the Labour Tribunal Ordinance on a point of law.

2. The matter first came up before the Labour Tribunal when the 1st respondent and 24 others (the claimants) filed claims in that Tribunal against Ling Shing Hong Trading as Video Compass for various sums alleged to be owing under the Employment Ordinance. Pre-trial enquiries having taken place, the matter came on for hearing on the 7th November 1989. The record indicates that various awards were made against the appellant (defendant) either on admission by "the defendant company" or by the consent of "the defendant company".

3. The record of proceedings is very short concerning the representation of the appellant (defendant) and is recorded as follows: -

4. D1 is a letter on Video Compass Limited note paper and dated the 7th November 1989 addressed to the Registrar/Presiding Officer, Labour Tribunal, Hong Kong. It is in the following terms: -

"Dear Sir,

Re: Authorized representatives

This is to authorize Miss Chan Mei Wa (ID#XXXXXXX (X)) & Miss Li Sau Mui (ID#XXXXXXX (X) ) to act as our representatives to hear at a tribunal on the case reference claim No. 896 of 1989.

Your attention & approval on this matter is highly appreciated.

Yours faithfully,

For and on behalf of
VIDEO COMPASS LIMITED

Illegible Signature

............................
Authorized Signature(s)
Warren Ling
President."

5. Judgment having gone against the appellant (defendant) in the way set out above, he filed an application dated the 14th November 1989 to set aside the order. It appears that he was purporting to make the application under section 21A of the Labour Tribunal Ordinance. This application was in the following terms: -

" I, LING SHING HONG trading as VIDEO COMPASS, the defendant to this claim, which was heard and determined by the tribunal in my absence and an order made on the 7th November 1989 hereby, pursuant to section 21A of the Labour Tribunal Ordinance, make application to set aside the order.

The reasons for my non-appearance at the hearing are:

1. I carried on the business in the trade name of Video Compass since January 1987 with five other partners.

2. By an assignment of sale dated 22nd February 1989 the whole business of Video Compass including the employment contract, debts and liabilities, assets and the trade name were assigned to Video Compass Limited. All the partners apart from myself in Video Compass (a firm) retired on 22nd February 1989.

3. I was appointed the presiding of Video Compass Limited and I was also one of the directors of Video Compass Limited.

4. All the employees (including all the Claimants herein) were employed under Video Compass Limited.

5. I was all along under the wrong impression that they were claiming against Video Compass Limited and not myself, not until I received the Order dated 7th November 1989. I did not know about the claims against me as all matters related to employees were and still are handled by the personnel department of Video Compass Limited. They have given me the impression that the claims by all the employees who have resigned are against the limited company.

6. I was not present at the hearing on 7th November 1989. The hearing was attended by two of my staff from Video Compass Limited. They were supposed to represent Video Compass Limited and their authorizations were from Video Compass Limited. The Business Registration Certificate they produced to the Tribunal was also the certificate of Video Compass Limited.

7. I have never intended that the two representatives from Video Compass Limited should have any authorization to represent me. I have never authorized the two representatives to admit or consent the claims on my behalf. Their consent for order was given on behalf of Video Compass Limited but not Ling Shing Hong trading as Video Compass.

8. I pray that this Tribunal to set aside the Order against me and to re-hear the Claims or make an order against Video Compass Limited.

9. I would further say that I do not agree with the amount claimed by some of the Claimants. Some of them (C1, C5, C7, C8 and C9) resigned voluntarily and agreed to pay to the company one month's payment in lieu of their notice to resign. And their agreement to do so was given in writing. I enclose copies of this agreement for the Presiding Officer's perusal. If the Presiding Officers should prefer to review his order, I am very pleased to appear before him to put forward my case.

Dated the 14th November 1989

(Sd) LING SHING HONG
(Signature of Applicant)"

6. The matter came on for hearing on the 6th December 1989 before the same Presiding Officer and the notes of proceedings are in the following terms: -

"Claimant :	CHAN Chi Kin and 24 others in person.
Defendant :	Ling Shing Hong t/a Video Compass.
	Parties appeared. C12, C14, C23, absent Mr. LING Defendant appeared in person. C1 - C4 act as spokesmen for all Claimants.
Defendant :	The payments indicated in the agreements attached my letter to Labour Tribunal of 14th November, 1989 had not been paid. The firm still in existence.
Decision :	Oral reasons given.
	Application to set aside refused.
	Defendant to pay cost of this application $300.00 to each and appeared today in any event.

Decision : (Oral)

In the previous hearing 2 ladies came to the Tribunal submitting to jurisdiction with a letter of authorization of Defendant company but signed by Defendant. Adjournment granted and they checked Claimants work record and agreed to pay. Contracts between Claimant and Defendant is a fact. Documents supplied by Defendant after the previous indicated the dismissal agreement in the name of the firm and signed by Defendant himself. Application to set aside refused.

(Sd.) (James Lee)
Presiding Officer
Labour Tribunal
6.12.89."

7. The formal order signed on the prescribed form indicates: -

" The Tribunal on the 6th December 1989 made the following orders:

Application to set aside refused.

Defendant to pay cost of this application $300.00 to each and appeared today in any event. (Total sum $6,600.00) (except C12, C14 & C23)

(Sd) (James LEE)
Presiding Officer"

8. The appellant, in a document dated the 13th December 1989, made application for leave to appeal on a point of law. The grounds set out in that application repeated to some extent the grounds set out in the application to set aside the order.

9. On the 15th December 1989, a notice was sent on Form 15A indicating that the appellant's application for leave to appeal against the order of James Lee made on the 6th day of December 1989 would be heard in the Supreme Court on the 22nd January 1990 at 9:30 a.m.

10. At some stage although the documents is undated, a decision was drawn up by the Presiding Officer in the following terms: -

"DECISION

1. This is a claim by many employees against the Defendant for arrears of wages, overtime payment, holiday pay and commission.

2. At the hearing the Defendant was represented by 2 ladies. They had a letter of authorization in the name of Video Compass Limited but signed by the Defendant himself.

3. The 2 representatives submitted to jurisdiction and admitted liabilities to same of the claims settled all the other claims.

4. The Defendant wrote to the Tribunal on 15th November 1989 for review of its Order namely to set aside the Order or to make an Order against Video Compass Limited. The Defendant claimed that he should not be personally liable but the Company ought to be liable if there was liability. He also challenged the case of some of the Claimants.

5. I refused his application as I do not believe that he did not know he was the Defendant as he had signed the letter of authorization.

6. As to C1, C5, C7, C8 and C9, they may have voluntarily resigned but the money owed to them under those agreement are not paid. So these agreements have no effects and the positions of the parties ought to be restored to their positions before those agreements.

7. The Tribunal can only see that the reason for asking it to make an Order against the Company was because it was well known that the Company is in serious financial difficulties and is unlikely to be able to pay the Claimants.

8. If the Tribunal is wrong in its decision. The Appellate court is respectfully asked to consider imposing security for costs under section 30 of the Labour Tribunal Ordinance Cap. 25 Laws of Hong Kong, before adjourning the case to be retried. 

(Sd) (James LEE)
Presiding Officer
Labour Tribunal"

11. The application for leave to appeal was heard on the 22nd January when new grounds of appeal were substituted. This unfortunately indicates that the application was for leave to appeal against the order of the Presiding Officer made on the 7th December 1989.

12. It is not clear from that whether the appellant was seeking to appeal against the original order made on the 7th November 1989 or against the order refusing the application to set aside made on the 6th December 1989.

13. The order granting leave however refers to the 6th December 1989.

14. It is contended by the appellant in his substituted grounds of appeal that he desires to appeal on the ground that the order is erroneous in point of law in that: -

"1. The Labour Tribunal misdirected himself on the following points of law: -

i. The Labour Tribunal wrongfully admitted that the consent for an order given by Video Compass Limited to be consent given by the Applicant:
the hearing on the 7th November 1989 before the Presiding Officer for the determination of this claim were attended by two representatives of Video Compass Limited. The Business Registration Certificate produced by them were of Video Compass Limited and their authorization letter were also from Video Compass Limited. The two representatives were authorized by Video Compass Limited to admit the claim for and only for the Video Compass Limited. The Applicant had not authorized them or anyone to consent to an order or admit the claim on the Applicant's behalf. The Applicant was not present at the said hearing.

ii. The Labour Tribunal failed to see the legal effect of an Assignment of Sale dated 22nd February 1989:
By an Assignment of Sale dated 22nd February 1989 between Li Yan Sun, Ling Shing Hong, Patrick Wu Kok Hing, Andy Wu Kwok Man, Wu Kwok Chi and Wu Kwok Wah all partners of former Video Compass of the one part and Video Compass Ltd. of the other part, the whole business of Video Compass, including the employment contracts, debts and liabilities, assets and the trade name were assigned to Video Compass Limited, a limited company specifically formed for the purposes of acquiring the business at that time run in the trade name of Video Compass. The said transfer was gazetted in the Government Gazette on 28th January 1989 and notice of the transfer were also advertised in some local newspapers in July 1989. All the employees employed by Video Compass in February 1989 had notice of the said assignment. All the rights and liabilities under the employment contracts (including the claimants herein), in accordance with the provisions of the Transfer of the Businesses (Protection of Creditors) Ordinance Cap. 49 were transferred to Video Compass Limited.

iii. The Labour Tribunal failed to see the legal effect of the voluntary resignation of the following claimants: - C1: CHAN Chi Kin, C5: YEUNG Lau On, C7: LEE Pik Kwan, C8: WONG Ming Fai and C9: NG Sze Hing resigned voluntarily and had each entered into an agreement to pay the company one months's payment in lieu of their notice to resign. However, in their claim they had included a claim from the company to pay them payment in lieu of notice.

2. The order in favour of C5: YEUNG Lau On is outside the Jurisdiction of the Tribunal in that:

i. The claim of C5: YEUNG Lau on is in excess of the limits for the Tribunal under Section 7 and the Schedule of the Labour Tribunal Ordinance:
Yeung Lau On was the Art Director of the company and earned well over HK$30,000.00 per month while he was with Video compass Ltd. His employment contract did not fall into the protection of the Employment Ordinance Cap. 57.

Dated the 20th day of January 1990,

(Sd) (Kevin L.H. Kwong & Co.,)
Solicitors for the Applicant."

15. Miss Van der Eb, who appears for the appellant, sought at the beginning of the appeal to rely on an affirmation purporting to be made by the appellant. On my querying whether this was possible having regard to section 35 (2) (b) (ii) which prohibits the High Court receiving further evidence, she submitted that all the affirmation seeks to do is to show how the hearing was conducted. It seeks to show that the second hearing (that is the hearing of the application to set aside) was a nullity because the Applicant was not given a chance to explain the position. Although one of the respondents objected to my viewing the affirmation, I indicated that I would accept it provisionally for the purpose of the hearing and would rule on the matter at a later stage. I also indicated that if the appellant was relying upon any affirmation criticising the conduct of the Presiding Officer, the matter would have to be adjourned to enable the Presiding Officer to give his version of what happened.

16. On hearing this, Miss Van der Eb was content to argue the appeal without relying upon the affirmation, and I did not consider its contents.

17. Miss Van der Eb has taken me through the record and the relevant documents which were before the President of the Tribunal at both hearings on the 7th November and the 6th December. She argues that he was wrong in law to take the letter of authorization as being binding upon the defendant, as opposed to the limited liability company. She is not asking for the decision of this Court to be final, but merely that the matter be sent back to the Tribunal for a retrial.

18. None of the respondents, all of whom were unrepresented, was able to advance any good reasons why the judgment should stand. Those who addressed me were obviously content with the Presiding Officer's decision and felt that the letter of authorization was sufficient to bind the appellant in respect of the consent judgment. Other points were made but it is not necessary for me to go into them.

19. I hold that the Presiding Officer erred in law in accepting that the letter of authorization, Exh. D1, was binding upon the appellant having regard to the circumstances as they appear on the record of the Tribunal. That letter was made on behalf of the limited liability company, which was not the defendant. There was thus nobody present on the 7th November representing the defendant. The presiding officer therefore erred in accepting the 2 ladies as his representatives. Not only did the letter Exh. D1 indicate on its face that it was written "for and on behalf of" the company but the lady who gave evidence testified she was the representative of the company. The appeal succeeds on ground 1(i) of the perfected grounds of appeal.

20. I do not find it necessary to deal with the other grounds of appeal.

21. Under section 35 (1) (a) and (c) I allow the appeal and remit the matter to the Tribunal for the rehearing of the application made under section 21A (i) to set aside the award. The tribunal should consider this application on the basis that the appellant was absent at the hearing on 7th November and the letter Exh. D1 was not binding on him, and may exercise its discretion on such terms as it thinks just.

22. The appellant does not ask for cost against these respondents and no order is therefore made.

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Representation:

Miss Colette Van Der Eb inst'd by M/s Kevin L.H. Kwong & Co. for Appellant.

C1-C8, C10-C12, C14, C15, C17, C18, C20-C25 in person.

C9 represented by C8.

C16 represented by C15.

C13 & C19 absent.

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