Samulde Ma Violeta Cabaya v. Kwan So Han Sandy

HCLA000093/2003

HCLA 93/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 93 OF 2003

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO. 11359 OF 2002)

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Coram: Hon Chung J in Court

Date of Hearing: 23 February 2004

Date of Handing Down of Judgment: 28 April 2004

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J U D G M E N T

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Introduction

1.This is an appeal against the order of the Labour Tribunal ("the tribunal") dated 18 December 2002 whereby the appellant's claim against the respondent, her former employer (other than those accepted by the respondent) was dismissed. In short, according to the tribunal's "Reasons for Decision" dated 9 October 2003, the grounds for the dismissal of the claim were that the claim is beyond its jurisdiction and that it lacked merits. In the revised grounds of appeal, the appellant contends that:-

"... the learned Presiding Officer erred in construing the phrase 'sum of money' [in] s. 7 Labour Tribunal Ordinance to exclude claims for damages for breach of contract but construed the meaning as limited to claim[s] for ascertained sums".

Jurisdictional Provisions in Cap. 25

2.The correctness (or otherwise) of the said order turns on the true meaning of s. 7 and the Schedule, Labour Tribunal Ordinance (Cap. 25). S. 7(1) provides:-

"The tribunal shall have jurisdiction to inquire into, hear and determine the claims specified in the Schedule".

The parts of the First Schedule relevant to this appeal provide:-

"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 a contract to which the Contracts for Employment Outside Hong Kong Ordinance (Cap 78) applies;

... ,

other than a claim specified in the Schedule to the Minor Employment Claims Adjudication Board Ordinance (Cap 453)." (emphasis supplied).

The Tribunal's Decision on Jurisdiction

3.In the "Reasons for Decision", the learned Presiding Officer said:-

" 13. Although the Appellant in the present case attempted to quantify the amount of damages by adopting a figure [of] $77,070 so as to clothe this claim as a liquidated one, I do not accept it is a claim for a liquidated sum of money. Assuming that the Appellant was able to prove a case of a breach of [the] trust and confidence term in a contract of employment, I would accept that on the authority of EVELYN SEMAN BACHICHA and POON SHIU MAN HENRY (Civil Appeal No. 55 of 2000), the Appellant would be entitled to an award of damages. But the amount of damages in my judgment, will not necessarily [consist of] the total wages the Appellant would have earned from the remainder of her contract. In the BACHICHA case, the plaintiff was awarded damages in the total sum of $51,629 by HH Judge C B Chan of which $46,577 was awarded for breach of [the] trust and confidence term and constructive dismissal. Such amount of damages was however reduced to $17,370 by the Court of Appeal. ... " (para. 13 thereof).

" 14. ... Given the fact that for the present claim for damages, assessment of damages is required, I failed to see how it could meet the requirement for 'a claim for a sum of money' which had to be an ascertained sum. I therefore conclude that this Tribunal had no jurisdiction over this remaining item of claim for damages" (para. 14 thereof).

Relevant Judicial Authorities on Jurisdiction

4.The tribunal's above conclusion must have been based on the decision in National Ebauch Ltd v. Rishi Kaumar Bhatnagar [1981] HKLR 114 because that was the only authority on jurisdiction referred to by the tribunal: para. 12, "Reasons for Decision". Roberts CJ said in that decision:-

"Section 7 of the Labour Tribunal Ordinance (Cap. 25) confers exclusive jurisdiction on the Labour Tribunal in relation to those claims which are specified in the Schedule to the Ordinance. Paragraph 1 of that Schedule confers jurisdiction on the Tribunal in relation to a 'claim for a sum of money', which arises from the breach of a term, whether expressed or implied, in the contract of employment.

Is a claim for liquidated damages 'a sum of money' within the meaning of that Schedule? Paragraph 1 of the Explanatory Memorandum, which was annexed to the Labour Tribunal Bill on its publication states -

'This Bill establishes a tribunal, to be known as the Labour Tribunal, the jurisdiction of which is at present restricted to claims in respect of liquidated sums arising out of a breach of contract of employment, though there is provision for its jurisdiction to be changed by resolution of the Legislative Council'.

Paragraph 3 contains a passage, which is to the same effect -

'Part III deals with the jurisdiction of the tribunal. Clause 7 confers on the tribunal the jurisdiction set out in the Schedule. This is limited to claims for money arising out of a breach of contract of employment or statutory duty'.

It seems to me that the ordinary meaning of the phrase 'a sum of money' is that it is an ascertained sum. This view, so far as the Labour Tribunal Ordinance is concerned, is reinforced by the passages to which I have referred in the Explanatory Memorandum, which indicate that the intention of the Legislature was to exclude claims for unliquidated damages. This seems to me to be in accordance with the general intention of the Ordinance, which was to provide a simple informal forum without lawyers to deal with relatively simple claims which can be easily quantified.

I have, therefore, come to the conclusion that a claim for a sum of money arising from a breach of contract, does not include a claim for unliquidated damages. I thus agree with the ruling of Mr. Eric Li, the Presiding Officer in Labour Tribunal Claim No. 2352 of 1979 to the same effect" (p. 115).

5.It is clear that, when construing s. 7 and the Schedule in Cap. 25, the court in National Ebauch approached the matter based on (a) the natural and ordinary meaning of the words "a sum of money", (b) external aid in the form of the Explanatory Memorandum annexed to the Bill (which Bill resulted in Cap. 25), and (c) a purposive (or mischief) approach.

6.The learned Chief Justice may not be alone in so concluding, the Full Court in Hung Sang Engineering Works Ltd v. Yu Wing Fat [1975] HKLR 394 decided that:-

"It is therefore the proceeding between the claimant and the defendant which may be transferred under s.10 and we must construe the Order of transfer accordingly. But what was the proceeding between the Respondent and the Appellants which was transferred [from the Labour Tribunal to the District Court]? According to the Form of Claim as I have interpreted it was a proceeding for the recovery of unliquidated damages for breach of a contract of apprenticeship limited to $338. The whole purpose of the Form of Claim was to inform the Defendant and the Court what it was that the Respondent sought. The presiding officer seems to have appreciated that the claim before him was limited, because we see that he said the Respondent "could claim" (not "had claimed" or "was claiming") unliquidated damages and are told he advised the Respondent to apply for legal aid in making such a claim. ... In my view the presiding officer was right in thinking that there was no unlimited claim to unliquidated damages before him" (p. 400, per Huggins J (as he then was)).

The above passage can be understood to mean that the Full Court considered that a claim for unlimited unliquidated damages falls outside the tribunal's jurisdiction and should be transferred.

7.But there are other court decisions which, at least to an extent, concluded differently than National Ebauch or Hung Sang regarding this matter. It is unknown why the learned Presiding Officer did not refer to these other decisions in the "Reasons for Decision". Probably he was unaware of them.

8.In point of time, the first of these decisions is the decision of Hunter J (as he then was) in Panalpina (Hong Kong ) Ltd v. Ulrich Haldemann [1983] HKLR 275. He said:-

"The defendant relied principally on the decision of Roberts, C.J. in [National Ebauch], to the effect that the tribunal's jurisdiction was limited to claims for liquidated damages and that the High Court had jurisdiction to hear claims for unliquidated damages ..." (p. 277H).

"In my judgment the phrase 'sum of money' must be construed in the light of the fact that practically every claim for 'breach of a term ... of a contract' [a phrase used in the Schedule to Cap. 25] will be for damages unliquidated in law but quantified in practice. It follows, I think that the phrase must cover such claims. I agree with Roberts, C.J. that the legislature anticipated a 'quantified' claim and a claim that was 'ascertained' or ascertainable. But I regret that I cannot agree that this makes the claim one for liquidated damages, or that it limits the tribunal's jurisdiction to such claims ... " (p. 278D-E).

The reasons given by Hunter J in support of the above conclusion were:-

"... Liquidated damages arise 'where the parties to a contract, as part of the agreement between them, fix the amount which is to be paid by way of damages in the event of breach, ... as a genuine pre-estimate', per McGregor on Damages 14th edition paragraph 341. It is wholly exceptional to find such a provision in a service agreement. It is equally wholly exceptional to obtain specific performance of a service agreement. It follows that practically every case involving a breach of a service agreement gives rise to a claim for unliquidated damages, see Yip Wan-chiu v. Magnificent Industrial Ltd. [1974] HKLR 183. ...

But to say that damages are unliquidated is not to say that they are general in the pleading sense, or at large. With very few exceptions, e.g. loss of reputation, and more recently loss of a holiday, damages for breach of contract are not general but special, and have to be precisely particularised and quantified. ... " (p. 277I-278C) (emphasis supplied).

"... This conclusion [that the tribunal's jurisdiction covers "quantified" claims] seems to me to be supported by paragraph 3 [of the Schedule to Cap. 25]. No claim 'founded in tort' can be for liquidated damages. It may contain a calculated or special damages element; but the bulk is likely to be for general damages. I am much comforted to know that the same conclusion was reached by O'Connor, J. on 18th December 1979 in Stewart and Others v. The Hong Kong Philharmonic Society Limited H.C.Civil Action No. 3031/79. ... " (p. 278E-F).

9.The next decision (in time) which in effect followed Panalpina is Ying Cheong Shoe Mfy v. Yam Yuk Bing and Another [1987] 2 HKC 310. Rhind J observed that:-

"... As the employer was not the 'party terminating the contract', there is no obligation on the employer to pay wages in lieu of notice. That does not mean, however, the employer is entitled to walk away scot-free. Instead of being liable to pay liquidated damages under s 8A(1) [which provides that a sum equivalent to the amount of wages which would have accrued to the employee during the notice period should be paid if his employment is terminated other than according to s. 6 or 7, Employment Ordinance (Cap. 57)], the employer is instead liable to pay unliquidated damages according to ordinary common law principles for breach of contract ... the learned presiding officer should have assessed common law damages for the employer to pay" (p. 318I-319B) (emphasis supplied).

Although there was no specific reference to National Ebauch or Panalpina, Rhind J has implicitly decided that it was within the power of the presiding officer to assess common law unliquidated damages for a breach of employment contract.

10.The third decision which differed from National Ebauch is David Ireland and others v. Canton Fitzgerald (HK) Ltd, unrep., A 2115 of 1988. After referring to s. 7 and the relevant parts of the Schedule, Cap. 25, Sharwood Dep J said:-

"Mr. Faulkner, for the defendant, submitted that the plaintiffs' claims for damages arising out of breach of contract are claims for a sum of money under paragraph 1(a) of the Schedule, and that by virtue of section 7(2) of Cap. 25, are actionable only in the Labour Tribunal. Since the claims have been brought in the High Court, they should be struck out.

He relies on Panalpina (Hong Kong) Ltd. and Ulrich Haldemann ... , a decision of Hunter, J. (as he then was), who felt that 'Practically every case involving a breach of service agreement gives rise to a claim for unliquidated damages' ...

In other words, Hunter, J. decided that a claim for a 'sum of money' was not necessarily a claim for liquidated damages, but could include a claim for unliquidated damages. He was thus in diametric opposition to Roberts, C.J. in National Ebauch Ltd. and Rishi Kaumar Bhatnagar ... , who concluded 'that a claim for a sum of money arising from a breach of contract, does not include a claim for unliquidated damages'.

Hunter, J. derived support from the unreported decision of O'Connor, J. in The Hong Kong Philharmonic Society case. O'Connor, J. there pointed out that the phrase 'sum of money' was clearly envisaged by paragraph 3 of the schedule to include a claim for unliquidated damages, for since all claims in tort are for unliquidated damages, the paragraph, in effect, concedes that a claim for a sum of money can arise in a cause of action founded in tort.

Mr. Smith, on behalf of the plaintiffs, submitted that Hunter, J. was clearly wrong ... ".

The learned deputy judge then elaborated on the arguments of counsel for the parties and concluded:-

"In all the circumstances, I am satisfied that the decision of Hunter, J. was reached after full and careful consideration of the decision of Roberts, C.J., and I therefore propose to follow and apply it in this case.

It would be inappropriate for me to express my own views of the matter in any detail, and it will no doubt be determined by the Court of Appeal. I only wish to say that it seems likely that the difficult and ambiguous phrase, "sum of money" may well have been used to highlight the distinction between any monetary claim whatsoever, arising from the breach of a contract of employment, be it a claim for liquidated damages, or unliquidated damages, limited or unlimited, on the one hand, and any non-monetary claim, on the other ... "(emphasis supplied).

Beeson Dep J (as she then was) in short followed Ying Cheong Shoe Mfy in De Nicolas, Nenita Cientos v. Lee Fund Lan, Labour Tribunal Appeal No. 15 of 1997, unrep.

11.Finally, in Lucullus Food & Wines Co. Ltd v. Ng Pui-yee, unrep., DCCJ 4767 of 2001, deputy district judge Yu said the following with regard to jurisdiction:-

" 38. The schedule of the Labour Tribunal Ordinance provides, inter alia that "a claim for a sum of money which arises from the breach of a term, whether express or implied, of a contract of employment, whether for performance in Hong Kong or under a contract to which the Contracts for Employment Outside Hong Kong Ordinance (Cap 78) applies" shall be within the jurisdiction of the Labour Tribunal. The issue whether the claim for general damages arising from the breach of employment contract is within the jurisdiction of the Labour Tribunal has been considered in Labour Appeal cases. The line of authorities has been summarized by H.H. Judge Li in MONES, CELESTINA SALDIVAR v. LUI SIU HUNG (Labour Tribunal Appeal No. HCLA 81 OF 1999)" (para. 38 thereof).

" 40 ... I agree with the judgment of Mr. Justice Roberts CJ as further elaborated by Hunter J. The phase "a sum of money" should be interpreted as damages unliquidated in law but quantified in practice. This must be referring to the benefit conferred upon the employees by the Employment Ordinance or the contract as protected by the Employment Ordinance. But the damages claim by the Plaintiff here is clearly general damages, unliquidated, and not qualified in practice ... " (para. 40 thereof).

12.The above decisions (except Ng Pui-yee) led the late Li Dep J to conclude in Mones, Celestina Saldivar v. Lui Siu Hung, unrep., HCLA 81 of 1999 that there is a dichotomy of authorities. On that basis, he granted leave to the applicant to appeal against the tribunal's order on point of law.

13.Despite the wish expressed by the learned deputy judge in Ng Pui-yee more than 4 years ago, the jurisdiction issue has still not reached the court of appeal. In these circumstances, I can do more than add my own view to those set out above.

The Nature of Common Law Damages for Breach of Contract

14.Before embarking on an analysis of the true meaning of s. 7 and the Schedule, Cap. 25, it is useful to adopt the approach of Hunter J by examining what is the nature of the common law damages for breach of contract generally.

15.Chitty on Contracts (1999) 28th Ed., Ch. 7 contains an authoritative discussion of this matter. The learned editors said:-

"... Damages for a breach of contract committed by the defendant are a compensation to the claimant for the damage, loss or injury he has suffered through that breach. He is, as far as money can do it, to be placed in the same position as if the contract had been performed. This implies a 'net loss' approach in which the gains made by the claimant as the result of the breach (e.g. savings made because he is relieved from performing his side of a contract which has been terminated for breach ... ) must be set off against his losses arising from the breach (after he has taken reasonable steps to minimise those losses). In assessing damages for breach of contract, the court can take account of only strict, legal obligations ... If the claimant cannot establish an actual loss, he is entitled only to nominal damages. Even where the claimant can prove his loss, damages are hardly ever a full recompense, since ' it must be remembered that the rules as to damages can in the nature of things only be approximately just' ... ": para. 27-001 (emphasis supplied).

McGregor on Damages (2003) 17th Ed., para. 1-001 is to similar effect. It is important to bear this elementary but fundamental principle in mind in considering the true meaning of s. 7 and the Schedule, Cap. 25 because a proper construction cannot be given to a statutory provision without having regard to the context in which the provision was enacted.

16.The terms "general damages", "special damages", "liquidated damages" and "unliquidated damages" have excited generations of legal minds. In Chitty, the learned editors define "general and special damages" by way of pleading and evidence. Thus, they said:-

"... the distinction between general damages and special damages is mainly a matter of pleading and evidence. General damages are given in respect of such damage as the law presumes to result from the infringement of a legal right or duty: damage must be proved but the claimant cannot quantify exactly any particular items in it. The main meaning of special damages is that precise amount of pecuniary loss which the claimant can prove to have followed from the particular facts set out in his pleadings. Special damage must be specifically pleaded and evidence relevant to it cannot be adduced if only general damages have been pleaded, since the purpose of pleading special damages is to prevent surprise at trial by giving the defendant prior notice of any item in the claim for which a definitive amount can be given in evidence, e.g. in a claim for wrongful dismissal, loss of salary during the period of notice required by the contract. A claimant who bases his claim on precise calculations must give the defendant access to the facts on which they are based ... ": para. 27-005.

It is immediately apparent from the above passage that a mere label of "general damages" or "special damages" does not help one to know precisely what heads of claim fall within one category rather than the other.

17.The learned editors of Chitty define "liquidated damages" and "unliquidated damages" as:-

"The term liquidated damages is applied where the damages have been agreed and fixed by the parties ... , or fixed by statute as in the case of damages against parties to a dishonoured bill of exchange. Unliquidated damages is the term applied where the damages are at large and are to be assessed by a jury or by a judge sitting as a jury; the rules as to remoteness of damage are the main criteria for such damages": para. 27-009 (emphasis supplied).

The distinction made above between liquidated and unliquidated damages provides a more helpful working definition for determining which heads of claim belong to the former and which to the latter.

18.There are also other passages in Chitty which discuss topics such as nominal damages, damages for prospective loss and continuing breaches of contract, damages for the costs of completion, reinstatement or repairs, exemplary damages and restitutionary damages but I do not consider these passages to be relevant to this appeal.

Meaning of S. 7 and the Schedule in Proper Legal Context

19.Adopting the definitions of liquidated and unliquidated damages given by Chitty (above), in the context of a damages claim for breach of employment contract by the employer, the following are the possible heads of claim:-

(a) liquidated damages based on sums agreed and fixed by the contracting parties;

(b) liquidated damages based on sums fixed by statutes, especially the Employment Ordinance (Cap. 57);

(c) unliquidated damages based on common law principles.

(a) Wording of the Schedule

20.The Schedule to Cap. 25 provides:-

" 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, ...

(aa) 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 (Cap 57) or the Apprenticeship Ordinance (Cap 47),

other than a claim specified in the Schedule to the Minor Employment Claims Adjudication Board Ordinance (Cap 453).

2. A claim for contribution under section 26(2).

3. Notwithstanding paragraphs 1 and 2, the tribunal shall not have jurisdiction to hear and determine a claim for a sum of money, or otherwise in respect of a cause of action, founded in tort whether arising from a breach of contract or a breach of a duty imposed by a rule of common law or by any enactment.

4. Any question as to-

(a) the right of an employee to a severance payment under Part VA of the Employment Ordinance (Cap 57); or

(b) the amount of such payment,

other than a claim specified in the Schedule to the Minor Employment Claims Adjudication Board Ordinance (Cap 453).

5. Any question as to-

(a) the right of an employee to payment of wages by a person other than his employer under Part IXA of the Employment Ordinance (Cap 57); and

(b) the amount of such payment,

other than a claim specified in the Schedule to the Minor Employment Claims Adjudication Board Ordinance (Cap 453).

6. Notwithstanding paragraphs 1, 2, 4 and 5, the tribunal shall have jurisdiction to hear and determine a claim transferred to the tribunal under section 8(3) of the Minor Employment Claims Adjudication Board Ordinance (Cap 453) or section 7 or 10 of the Small Claims Tribunal Ordinance (Cap 338).

7. A claim for remedies under Part VIA of the Employment Ordinance (Cap 57)." (emphasis supplied).

21.The reference to "contribution" in para. 2 of the Schedule is a reference to a right to claim contribution by one co-partner defendant against his co-partner(s). The reference to "payment of wages by a person other than his employer" in para. 5 of the Schedule is a reference to the provisions relating to the statutory liability of a principal contractor or superior sub-contractors to pay the wages of employees of sub-contractors. The reference to "remedies under Part VIA of [Cap. 57]" is a reference to the provisions relating to an employee's protection against dismissal other than for a valid reason (or to extinguish or reduce his rights), or variation of employment terms to extinguish or reduce his rights.

22.Other than the references explained above, the other paragraphs in the Schedule should be self-explanatory. The natural and ordinary meaning of the phrase "a sum of money" should be clear when understood in the context of para. 1(a) to 1(b) and para. 3 of the Schedule. This will be elaborated below.

23.A head of claim set out in para. 19(a) above would fall within para. 1(a) of the Schedule. In relation to a head of claim set out in para. 19(b) above, it is important to note that the Schedule specifically distinguishes:-

(1) "a sum of money which arises from ... the breach of a term ... of a contract of employment" (para. 1(a) of the Schedule), from

(2) "a sum of money which arises from ... the failure of a person to comply with the provisions of the Employment Ordinance ... " (para. 1(b) thereof).

Various sums of money are payable according to the provisions of Cap. 57. The amount of all such sums is fixed by the provisions of Cap. 57. Hence, these sums are "liquidated damages" as defined by Chitty (see para. 17 above). The Schedule must have intended by this distinction to confer jurisdiction on the tribunal to "inquire into, hear and determine" a claim for liquidated damages based on sums fixed by Cap. 57 (in other words, sums fixed by statute) by way of para. 1(b) of the Schedule. I accept, however, in certain instances, such a claim may arguably also fall within para. 1(a) thereof.

24.As Hunter J observed in Panalpina, it is wholly exceptional to find a provision for agreeing and fixing a pre-estimate of damages in employment contracts. Sometimes there are contractual provisions specifying the amount of wages in lieu of notice for terminating the employment. But it is rare for there to be contractual provisions specifying that this will be the only damages payable. With this in mind, the conclusion reached in National Ebauch (on which the tribunal based its decision on jurisdiction) would mean, for practical purposes, that both para. 1(a) and 1(b) of the Schedule only confer jurisdiction on the tribunal to inquire into, hear and determine liquidated damages fixed by statute. This is too narrow a view to adopt. Further, such a view would render para. 1(a) of the Schedule to be almost superfluous.

25.Consideration should also be given to the use of the phrase "a sum of money" in para. 3 of the Schedule in relation to:-

"a claim for a sum of money, or otherwise in respect of a cause of action, founded in tort ... ".

26.There is a presumption that a phrase used in different parts of the same statute should bear the same meaning. It is trite law that both general and special damages, as well as liquidated and unliquidated damages, are recoverable in a claim (or cause of action) founded in tort: see Hunter J's observation to similar effect in Panalpina, p. 278E-F (see above). If the conclusion reached in National Ebauch were correct, para. 3 of the Schedule would have been intended only to refer to liquidated damages founded in tort. There is no reason why the legislature should intend such a result as regards claims (or causes of action) founded in tort.

(b) Purposive Approach / Mischief Rule

27.I agree with great respect to the observation in National Ebauch that the general intention of Cap. 25:-

"... was to provide a simple informal forum without lawyers to deal with relatively simple claims ... ".

But I do not see why that should mean the phrase "a sum of money" is only intended to cover "... claims which can be easily quantified" (insofar as that should mean claims for liquidated damages). On the contrary, a simple informal forum without lawyers which can deal with all types of monetary claims related to contractual disputes about employment will better serve such general intention than a forum which can only deal with claims for liquidated sums. This is because tribunal proceedings tend to be faster, shorter and cheaper than those in the higher courts.

28.Further, defining "a sum of money" to also include unliquidated damages does not mean that the tribunal is bound to hear and determine such claims. In appropriate cases, the tribunal still has the power under s. 10, Cap. 25 to decline jurisdiction and to transfer claims to the higher courts.

(c) Other Statutory Provisions

29.Para. 6 of the Schedule, Cap. 25 confers jurisdiction on the tribunal:-

"...to hear and determine a claim transferred to the tribunal under ... section 7 or 10 of the Small Claims Tribunal Ordinance (Cap 338)".

S. 5(1), Cap. 338 provides that:-

"The tribunal shall have jurisdiction to hear and determine the claims specified in the Schedule".

The Schedule to Cap. 338 uses the phrase "monetary claim" rather than "a claim for a sum of money". It is generally accepted, because of the use of that phrase, that the Small Claims Tribunal has jurisdiction to hear and determine claims for both liquidated and unliquidated damages. Cap. 338 was enacted in 1975 (and came into effect on 1 October 1976). On the other hand, Cap. 25 was enacted in 1972 (and came into effect on 1 March 1973). Because Cap. 25 was enacted before Cap. 338, it is unknown if the legislature intended the phrase "a claim for a sum of money" (in Cap. 25) to bear a different meaning than the phrase "monetary claim" (in Cap. 338).

30.To adopt the court's remark in National Ebauch regarding the general intention of the statute, like the tribunal, the Small Claims Tribunal must have been intended to be a simple informal forum without lawyers to deal with relatively simple claims. If the legislature should intend that the Small Claims Tribunal can hear and determine claims for both liquidated and unliquidated damages, I cannot see any valid reason for concluding that the legislature should intend that the tribunal cannot inquire into, hear and determine such claims.

31.In addition, the jurisdiction of the Small Claims Tribunal to transfer claims is founded on s. 7:-

"The tribunal may at any stage of proceedings in the tribunal, either of its own motion or upon the application of any party, transfer the proceedings to ... the Labour Tribunal ... , whereupon the practice and procedure of ... the Labour Tribunal ... shall apply",

and s. 10(1):-

"Where any counterclaim or set-off and counterclaim in proceedings in the tribunal is a monetary claim which is not within the jurisdiction of the tribunal, the tribunal shall order that the proceedings on the counterclaim or set-off and counterclaim be transferred to ... the Labour Tribunal ... " (emphasis supplied).

32.The Small Claims Tribunal therefore has power to transfer claims (which may include claims for unliquidated damages) to the tribunal. Because of para. 6 of the Schedule, Cap. 25, it is at least arguable that the tribunal has jurisdiction to hear and determine the transferred claim (including the unliquidated part).

(d) External Aid

33.Because of the matters set out above, I find that the natural and ordinary meaning of the phrase "a claim for a sum of money" is clear. For this reason, there is no obscurity which would make resort to extrinsic material permissible in accordance with the principles laid down in Pepper v. Hart [1993] AC 593 (the Pepper case has been applied in quite a number of Court of Final Appeal decisions).

34.But assuming somehow that resort can be had to the Explanatory Memorandum, I still do not consider this can help resolve any obscurity regarding the meaning of "a sum of money". This is because there is ambiguity in the Explanatory Memorandum itself. The court in National Ebauch referred to two paragraphs of the Explanatory Memorandum. Para. 1 reads:-

"This Bill establishes a tribunal, to be known as the Labour Tribunal, the jurisdiction of which is at present restricted to claims in respect of liquidated sums arising out of a breach of contract of employment, though there is provision for its jurisdiction to be changed by resolution of the Legislative Council" (emphasis supplied).

The phrase "liquidated sums" can be taken to mean "liquidated damages" (in contrast to "unliquidated damages") and, if so understood, is supportive of the conclusion reached in National Ebauch. However, para. 3 thereof reads:-

"Part III deals with the jurisdiction of the Tribunal. Clause 7 confers on the Tribunal the jurisdiction set out in the Schedule. This is limited to claims for money arising out of a breach of contract of employment or statutory duty" (emphasis supplied).

The phrase "claims for money" should have the same meaning as the phrase "monetary claims".

35.I therefore disagree with the observation in National Ebauch that the Explanatory Memorandum can assist the court in ascertaining the true meaning of the phrase "a sum of money" in the Schedule, Cap. 25. This ambiguity would mean that there has not been any clear statement by a minister or other promotor of the bill to help resolve an obscurity in the statute: Pepper v. Hart at p. 594.

Conclusion on Construction

36.By virtue of the matters set out above, I disagree with the decision in National Ebauch. In fact, I conclude that, like the Small Claims Tribunal, the tribunal has jurisdiction to inquire into, hear and determine all monetary claims falling within its jurisdiction, even if such claims should involve a claim for unliquidated damages (which term should include general damages as defined in Chitty (see para. 16 above)). It is not abundantly clear if Hunter J in Panalpina has decided that a claim for general damage could also fall within the tribunal's jurisdiction. Insofar as he has not, my conclusion goes further than his. The decisions in Ying Cheong Shoe Mfy and David Ireland appear to support my view.

37.The appellant invites me to follow the decisions in Panalpina and David Ireland rather than that in National Ebauch based on the principle set out in Colchester Estates v. Carlton Industries [1984] 2 All ER 601, 604-605 (which included a quote from Minister of Pensions v. Higham [1948] 2 KB 153):-

"... I follow the general rule that where there are conflicting decisions of courts of co-ordinate jurisdiction, the later decision is to be preferred if it is reached after full consideration of the earlier decision ...

... it is desirable that the law, at whatever level it is declared, should generally be certain. If a decision of this court, reached after full consideration of an earlier one which went the other way, is normally to be open to review on a third occasion when the same point arises for decision at the same level, there will be no end of it. ... There must come a time when a point is normally to be treated as having been settled at first instance. I think that that should be when the earlier decision has been fully considered, but not followed, in a later one ... ".

As I have been able to come to a conclusion which is consistent with (although it may go further than) that reached in Panalpina, I will gratefully accept that invitation. For the same reason, I will differ from the indication given in Lui Siu Hung to the tribunal that all claims involving a claim for unliquidated damages should be transferred by the tribunal to the higher courts until the matter has been authoritatively determined by the court of appeal.

38.So that the point is not overlooked, I repeat here what I said about the tribunal's discretionary power under s.10, Cap. 25 (see para. 28 above).

The Tribunal's Alternative Basis for Dismissing the Claim

39.The respondent accepted all the appellant's claim except her claim for $77,070.00 being damages for breach of trust and confidence. According to the "Reasons for Decision", this amount reflects the wages which the appellant would have earned during the remainder of the contractual period had she not been dismissed by the respondent.

40.The learned presiding officer opined that the tribunal had no jurisdiction to hear and determine this claim. He has not overlooked the tribunal's power to order the claim to be transferred pursuant to s. 10. Cap. 25. However, he declined to do so on the ground that there is no merit in the claim. This is what he said in the "Reasons for Decision":-

" 15. ... I eventually declined to exercise my discretion to transfer as I did not find any merits in the Appellant's case at all. I was of the view that it was a frivolous claim. If such a claim was allowed to be transferred, it would certainly amount to an abuse of process.

16. I came to such conclusion because taking the Appellant's case to its highest, it could never have made out a case of breach of an implied term of trust and confidence ... " (para. 15 and 16 thereof).

The appellant's case relevant to her disputed claim has been set out in the "Reasons for Decision":-

" 3. The Appellant's version of events leading to the termination of her employment was rather simple and straightforward. According to her, she entered into an employment contract with the [respondent] on 3.5.2002 whereby she agreed to work as a domestic helper for the [respondent] ...

4. The Appellant arrived in Hong Kong on 26.6.2002 and began working on the [respondent's] premises since then. Her major complaint against her employer was that her employer had failed to grant her rest days in its true sense. During the entire employment period which was slightly more than 3 months, the [respondent] had demanded her to return home not later than 9:00 pm on her rest days. Besides, she was required to work both before and after going out on rest days. ...

5. On the 29th of September 2002 which was the Appellant's rest day, she was held up at a Police Station because she was required to be a witness in a criminal case. She was therefore unable to return home at 9:00 pm. She eventually did so at 5:00 am on the following day i.e. 30.9.2002. The [respondent] was apparently very angry with her and dismissed the Appellant immediately without prior notice. " (para. 3 to 5 thereof).

41.The reasons given by the learned presiding officer for his above conclusion are:-

"16. ... The sort of treatment [the appellant] had received from her employer in my view fell far short of the treatment required for a case of breach of trust of confidence. On her allegations, it may well be a case of an inconsiderate employer being a little too strict towards her domestic helper. However, I did not find an employer requiring a domestic helper to return by 9:00 pm and even requiring her to do a bit of household work before and after going out on a rest day would be described as conduct which is calculated to destroy or seriously damage the relationship of trust and confidence. It is certainly conduct which should not be encouraged. But to say it is grave enough to cause a breach of the implied term is going way too far. If the Appellant was not happy with this arrangement, the proper cause of action would be for her to file a claim for rest day pay ...

17. Moreover, one must not lose sight of the fact that the triggering event was the 'witness in a criminal case' incident. I do not see why a reasonable employer cannot dismiss an employee who even on the Appellant's evidence had seriously damaged her relationship with the employer by allowing herself to be involved in a criminal case and failing to return home until the following morning ... " (para. 16 and 17 thereof).

42.A claim for damages for a breach of the trust and confidence term of an employment contract has been discussed by the court of appeal in Bachicha. Ribeiro JA (as he then was) said:-

"... a given set of facts may constitute both kinds of breaches giving rise simultaneously to separate entitlements to damages, each independently computed, but subject obviously to the avoidance of any double recovery. The employer's wrongful conduct might constitute a wrongful dismissal (particularly in the form of a constructive dismissal) and at the same time, a breach of the implied trust and confidence term, the latter causing continuing financial loss not confined by the usual wrongful dismissal measure ..." (p. 468E-F) (emphasis supplied).

The learned judge, relying on Malik v. Bank of Credit and Commerce International SA [1998] AC 20, mentioned the following as regards the nature of the trust and confidence term:-

"Thus, in Malik, the plaintiffs' entitlement to notice money and statutory redundancy pay was not in issue (see [1998] AC 20 at 33 and 44). The nature of their claim was summarised by Lord Steyn (at p 43) as follows: -

The claim was for damages for pecuniary loss allegedly caused by the bank's breach of an implied contractual obligation of mutual trust and confidence. The foundation of the claim was the assertion that the bank had been operated in a corrupt and dishonest manner and that, despite the personal innocence of the employees, they have subsequently been unable to obtain employment in the financial services industry. The applicants described their claims as being for 'stigma compensation.'

The House of Lords upheld the existence of the implied obligation relied on ...

Lord Steyn also stated the obligation in general terms, based on formulations developed by the lower courts, as follows: -

It is expressed to impose an obligation that the employer shall not:

'without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee:' see Woods v W M Car Services (Peterborough) Ltd [1981] ICR 666, 670 (Browne-Wilkinson J), approved in Lewis v Motorworld Garages Ltd [1986] ICR 157 and Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589."

Given the generality of the implied duty, breaches may involve conduct taking many forms. Lord Nicholls (at p 35) put it as follows :-

The trust and confidence required in the employment relationship can be undermined by an employer, or indeed an employee, in many different ways ... The conduct must, of course, impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer. That requires one to look at all the circumstances.

As Lord Steyn put it (at p 46): -

... the implied obligation as formulated is apt to cover the great diversity of situations in which a balance has to be struck between an employer's interest in managing his business as he sees fit and the employee's interest in not being unfairly and improperly exploited.

... " (pp.464H-465H) (emphasis supplied).

The underlying purpose of, and the types of loss recoverable for a breach of, such a term has also been discussed:-

" ...

'The starting point is to note that the purpose of the trust and confidence implied term is to facilitate the proper functioning of the contract. If the employer commits a breach of the term, and in consequence the contract comes to an end prematurely, the employee loses the benefits he should have received had the contract run its course until it expired or was duly terminated. In addition to financial benefits such as salary and commission and pension rights, the losses caused by the premature termination of the contract may include other promised benefits ... Exceptionally, however, the losses suffered by an employee as a result of a breach of the trust and confidence term may not consist of, or be confined to, loss of pay and other premature termination losses. Leaving aside injured feelings and anxiety, which are not the basis of the claim in the present case, an employee may find himself worse off financially than when he entered into the contract. The most obvious example is conduct, in breach of the trust and confidence term, which prejudicially affects an employee's future employment prospects. The conduct may diminish the employee's attractiveness to future employers.' ... " (p. 468G-469B) (emphasis supplied).

The last observations regarding (1) financially worse off than when an employee entered into the contract, and (2) diminished attractiveness to future employers, are probably related to the employee's complaint in Malik that the former employer bank had been operating in a corrupt and dishonest manner.

43.But it is important to note the court of appeal (again adopting Malik) also pointed out the limitation of such an obligation of trust and confidence:-

"However, the obligation has its limits (p 53):-

... the implied mutual obligation of trust and confidence applies only where there is 'no reasonable and proper cause' for the employer's conduct, and then only if the conduct is calculated to destroy or seriously damage the relationship of trust and confidence ... " (p. 465H-I).

44.The tribunal's refusal to transfer the appellant's claim tantamounts to a striking out of the same. It is trite law that a claim should only be struck out where it is plainly and obviously unsustainable. Where there is a need for protracted examination of documents and evidence in order to see if the claim is valid, it is usually inappropriate to invoke such jurisdiction.

45.However, having borne these principles in mind, I agree with the tribunal's conclusion that the appellant's claim should be dismissed rather than transferred. I so conclude based on the following reasons:-

(a) viewed objectively (and whether singly or cumulatively), the respondent's alleged conduct of (1) demanding the appellant to return home not later than 9:00 pm on her rest days during the employment period, (2) requiring her to work both before and after going out on rest days, and (3) dismissing her on 30 September 2002 because of her failing to return in time, is not reasonably capable of amounting to conduct "calculated to destroy or seriously damage the relationship of trust and confidence" between the appellant and the respondent;

(b) more importantly, there is no proper basis for concluding that the dismissal can result (using the words used in Malik) "[exceptionally] ... [in] losses suffered by [the appellant] as a result of a breach of the trust and confidence term [which is further to the] loss of pay and other premature termination losses. ... [or the appellant being] worse off financially than when [she] entered into the contract ... [such as a] breach of the trust and confidence term, which prejudicially affects [her] future employment prospects";

(c) the appellant's disputed claim is not premised on injured feelings and anxiety.

Conclusion

46.While I disagree with the tribunal as regards its decision on its jurisdiction, I agree with it as regards the dismissal of the appellant's disputed claim for lack of merits.

47.Accordingly, this appeal is dismissed.

Costs

48.The respondent indicated at the appeal hearing that she neither opposed nor supported the appeal but asked that no costs be awarded against her whatever its outcome may be. The hearing of the appeal was relatively short (it lasted about 2 hours). The respondent does not appear to have suffered any loss apart from having to attend court for the hearing.

49.In these circumstances, there will be a costs order nisi pursuant to Ord 42 r 5B(6) that there be no order as to the costs of the appeal, save that the appellant's own costs be taxed in accordance with the Legal Aid Regulations.

Representation:

Mr James Collins, instructed by Messrs Massie & Clement, assigned by DLA, for the Claimant (Appellant)

Defendant (Respondent) acts in person and present