Wong Yet-wah Sunny v. Tu Brothers Ltd
Read the full judgment text of on BabelCite. was delivered on 7 June 1978.
1. Prior to the date upon which the hearing resumed the Plaintiff amended his claim by adding a further claim for liquidated damages. He was not legally advised and he, clearly, was not able to appreciate the difference between liquidated and unliquidated damages. At the end of his evidence in chief, at the suggestion of the Court and without objection from Mr Chan, he further amended his claim so as to include a claim of $20,000 for general damages for wrongful dismissal.
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DCCJ008096A/1977 IN THE DISTRICT COURT OF HONG KONG HOLDEN AT KOWLOON CIVIL JURISDICTION Action No. 8096 of 1977 -----------------
----------------- Coram: N. P. Power, D.J. Date of Judgment: 7 June 1978 ----------------- JUDGMENT ----------------- 1. Prior to the date upon which the hearing resumed the Plaintiff amended his claim by adding a further claim for liquidated damages. He was not legally advised and he, clearly, was not able to appreciate the difference between liquidated and unliquidated damages. At the end of his evidence in chief, at the suggestion of the Court and without objection from Mr Chan, he further amended his claim so as to include a claim of $20,000 for general damages for wrongful dismissal. 2. The Plaintiff finally had 4 claims before the Court. The first 3 of which purported to be claims for liquidated damages. They were :
3. The total of the liquidated claims alone was $57,000 but the Plaintiff abandoned his claim to any amount over $20,000 in order to bring his claim within the jurisdiction of the District Court. 4. The Plaintiff stated that he first met Mr Tu Sup Yat Hang, the managing director of the Defendant Company, in February 1977 through a Mr Wong Siu, the manager of Mr Tu's garment factory, and that it was agreed in that month, in the presence of Mr Wong, that the Plaintiff would resign from his current employment with Casey Agencies and come to work for the Defendant Company at a salary of $10,000 per month plus 10% to 15% of the net profits. Mr Tu, who gave evidence for the Defendant Company, admitted that he had met the Plaintiff early in 1977 but denied that there had been any talk of salary at that time. He said that the first time the matter of salary was discussed was in late June. The Plaintiff said that, thereafter, he acted in an advisory capacity to the Defendant Company. This seemed to be common ground as did the fact that he was paid $2,000 per month by the Defendant Company during some, at least, of the months following up until July. These payments were described, in the one receipt which was produced and marked Exh. 6(c), as "travelling expenses". Mr Tu explained that this term was used for "accounting purposes" as the Defendant Company "had some difficulty in placing this item on our tax returns". Be that as it may, it seems clear that the Plaintiff was in some form of close association with the Defendant Company after February 1977. Indeed it is common ground that, in that period, he negotiated a contract on behalf of the Defendant Company worth $115,000 U.S. and that he also negotiated with Silvamundi, Luxembourg to appoint the Defendant Company as their exclusive buying agents in the Far East for a period of 12 months. From the evidence, it appeared, that the party acting on behalf of Silvamundi who originally signed this agreement on 15th May 1977 did so without authority. Because of this on 27th June 1977 a duplicate agreement was entered into with a second person who also purported to be a representative of Silvamundi. 5. The Plaintiff said that in about March it was finally agreed that he would commence to work for the Defendant Company from 1st July and that he then resigned from Casey Agencies Ltd which resignation was effective on 30th June. It appears that he presented his resignation to Casey Agencies Ltd on 15th May (Exh. 2). The Plaintiff said that, as the Defendant Company's office was not ready, he did not actually start work until mid-July. He said that on 7th July Mr Tu said :
He said that he wrote this in his diary at the time and that he showed the diary (Exh. 4) to Mr Tu. The Plaintiff went on to say :
6. Mr Tu in his evidence denied that any such negotiation had taken place. He said that he first talked with the Plaintiff about salary towards the end of June and that it was agreed that he would employ the Plaintiff at $7,000 per month on 3 months probation from 1st July 1977. 7. I find Mr Tu's evidence in this regard manifestly unlikely. It is, in my view, quite unbelievable that the Plaintiff would have resigned from his former employment without ever having discussed salary with his new employer. 8. I accept the Plaintiff's evidence that originally the figure of $10,000 was discussed. However that may be, it seems that by 7th July Mr Tu had some misgivings about this figure and that he then made the offer as detailed by the Plaintiff. I am satisfied that this was an offer of $7,000 per month for the first 6 months with a further amount of up to $18,000 to be paid at the end of the 6 months depending upon how good business had been and that for the second 6 months the offer was $8,000 per month with a further amount of $12,000 to be paid at the end of the 6 months again depending upon business. I am satisfied that, unless the volume of business warranted it, the Plaintiff was only entitled, under this agreement, to $7,000 per month during the first 6 months. 9. I am further satisfied that the Plaintiff was to receive 10% of the net profits if there were any. As no claim was made in this regard I think it is safe to assume that there were none. 10. Although no specific details were given by either side it seems clear that orders did not come from Silvamundi in any real volume and that the business did not prosper. 11. Mr Tu said that after his return to Hong Kong on 2nd September 1977 he found a letter to the U.S. Consulate signed by his secretary in the company files and discovered that the Plaintiff had instructed his secretary to write this letter. The letter, a copy of which was tendered (Exh. 12), stated that the Plaintiff was receiving a monthly salary of $10,000. Mr Tu said that this letter was "one of the reasons", he did not, however, detail any others, why on 9th September he dismissed the Plaintiff. He said that the words of dismissal were :
12. He said that the one month's notice was to allow the Plaintiff to hand over the documents under his charge. The Plaintiff denied that any conversation of this nature took place. It might be thought strange, if a period of time was necessary to allow for the handing over of documents, that the period was not fixed by Mr Tu to expire on 30th September which, according to him, was the last day of the 3 months probation period. 13. Even stranger, however, is the fact that the Plaintiff did not leave the Defendant Company on 9th October, the date on which Mr Tu had told him he should quit, but that he, on that day, consequent upon the receipt of an airline ticket from Mr Tu, proceeded to Taiwan to speak with a Mr Livah who was a representative of Silvamundi. Mr Tu sought to explain why the Plaintiff had not left the Defendant Company on 9th October by saying that he had to wait on until he (Mr Tu) returned to the colony so that he could hand the books over to him. There did not appear to me to be any acceptable explanation as to why on 9th October Mr Tu send the Plaintiff, who was at that time a dismissed employee whose period of notice was on the point of expiry, an airline ticket so that he could go to Taiwan to speak with Mr Livah. Mr Tu's evidence was that at this meeting Mr Livah "confirmed that the 2 contracts were not effective. He said the person who signed could not represent the company". This evidence was not elaborated upon by Mr Tu nor was he cross-examined on it by the Plaintiff. I see no reason not to accept it. It indicates that, as at mid-October, Silvamundi were denying that there was any binding contract between them and the Defendant Company. Mr Tu said that he returned to Hong Kong on 16th October and that on 18th October the Plaintiff handed "the matters" over to him and that the Plaintiff was then paid his full salary for October. It might be thought strange that this employee whose month's notice had already expired should be given a further ex gratia payment. Mr Tu said that this payment was made "out of generosity". 14. The Plaintiff denied that he had ever been dismissed in September and said that at the end of that month or early in October Mr Tu said "Silvamundi were placing such little orders I had better close the company" and that he, the Plaintiff, suggested going to Luxembourg to discuss matters with Silvamundi. He said that this trip did not eventuate but that he went on 9th October to Taiwan for discussions with a representative of Silvamundi. He said that when Mr Tu came back to Hong Kong on about 15th October Mr Tu said, "I decide with my brother that we had better close the office of Hong Kong" and that he said, "At least you must let me have time to leave" and that Mr Tu replied, "No. I give you this money - the October salary and then we close". The Plaintiff said, and there was no dispute about this, that 2 other employees, both of whom were called to give evidence, were also dismissed at about the same time which left only Mr Tu's secretary and the office boy in the Defendant Company. 15. I found Mr Tu's version of the events which occurred in September and October thoroughly incredible and overall I had no hesitation in accepting the evidence of the Plaintiff thereto. As to Exh. 12, while it may well be that Mr Tu and the Plaintiff did discuss the letter early in September, I am satisfied that Mr Tu did not dismiss the Plaintiff because of the letter and, bearing in mind all of the evidence and having seen Mr Tu in the witness box, I consider it unlikely that the misrepresentation in the letter would, in the circumstances, have concerned him in any material way. 16. I am satisfied that the Plaintiff was dismissed on the 18th of October and was given his pay for October. The effect of this was that he was given pay in lieu of notice for a period of 13 days. I am further satisfied that the reason for his dismissal was that the business was not a financial success. This appears to have come about because Silvamundi failed to place the orders expected from them and were contending that the contracts were "not effective". While there is nothing in the evidence to establish, nor, indeed, is it alleged by the Defendant Company, that this situation was the fault of the Plaintiff, it seems to be clear, from the Plaintiff's own evidence, that he was employed, and that the import/export side of the Defendant Company was established, upon the basis that there would be substantial business arising out of the Silvamundi agreement. Upon the evidence I am satisfied that the Plaintiff is entitled to succeed in his claim for damages for wrongful dismissal. 17. Neither his claim for liquidated damages of $35,000, for his outlays while out of work, nor his claim for liquidated damages of $10,000, for one month's salary in lieu of one month's notice are maintainable in an action such as this. His claim for balance of salary must also fail as I am satisfied that the only agreement was that he would be paid $7,000 per month during the first 6 months and that other payments depended upon the business being successful which it clearly was not. 18. The damages to which the Plaintiff is entitled for wrongful dismissal are his loss of wages. In this case the amount will be the difference between the amount that he was paid in lieu of notice and the amount that he should have been paid in lieu of notice should I decide that he was entitled to a longer period of notice than 13 days. This is subject, of course, to his duty to mitigate his loss. 19. As no period of notice was fixed by the contract itself and as there is no such period implied by law the Defendant Company was required to give the Plaintiff a reasonable period of notice. As to what is a "reasonable period of notice" perhaps the best statement is in Hepple & O'Higgins' Individual Employment Law at p.127 :
20. It appeared from the facts set out in the Plaintiff's applications for employment (Exhs 5, 7, 8, 9, 10 & 11), which were not disputed, that the Plaintiff will be 49 years of age in December of this year and that he holds a Bachelor of Commerce from the United College of Hong Kong and a Diplom Kaufinann from University of Hamburg. It appeared also that he speaks English, German and 4 Chinese dialects and has considerable general business experience and was from 1965 to 1973 a lecturer and then the head of the Department of Business Administration at the Baptist College. 21. I am satisfied that the 13 days for which he was in fact paid was not a reasonable period of notice. In arriving at my decision in this regard I bear in mind all of the facts which I have found and particularly that :
22. I am satisfied that a reasonable period of notice would have been 2 months. 23. I am aware that 3 months is commonly held to be the proper period of notice in cases of wrongful dismissal of persons on the managerial side of business but, in the facts of this case, I am satisfied that, as at the date of dismissal, 2 months would have been a reasonable period of notice. 24. The Plaintiff according to his evidence, which I accept was then unemployed until 15th May 1978. Before awarding damages I must be satisfied that he took all reasonable steps to mitigate his damages. 25. It appears that, up until the end of 1977, he had made written application for only one job which was with Dah Chung Industrial Co. Ltd but he said that this job was his "main intention". It is clear from the exhibits that having failed to obtain this job he made numerous applications before finally being successful in May 1978. I am satisfied that the Plaintiff did what was reasonable to mitigate his damages. The Plaintiff was entitled to a period of 2 months notice in which period he would have earned $14,000. He was paid an amount of $2,935 being the equivalent of 13 days notice i.e. from 18th October to 31st October. This amount must therefore be deducted from $14,000. 26. I give judgement for Plaintiff in sum of $11,065. 27. There will be no order as to costs.
Representation: Plaintiff in person. Mr Y. T. Chan of Messrs. Y. T. Chan & Co. for defendant. |