Leung Yin Fun Connie v. Sogo Hong Kong Co Ltd
Read the full judgment text of DCCJ 3024/2004 on BabelCite. This District Court judgment.
1. In this claim, the Plaintiff claims the sum of $48,390.80 from the Defendant her former employer on the basis of constructive trust or on the basis of a claim based on money had and received by the Defendant for the use of the Plaintiff.
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DCCJ 3024/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 3024 OF 2004 -------------------- BETWEEN
-------------------- Coram: Her Honour Judge C.B. Chan in Court Dates of Trial : 19th, 20th and 22nd December 2005 and 16th January 2006 Date of Handing down of Judgment : 30th March 2006
____________ Judgment ____________
1.In this claim, the Plaintiff claims the sum of $48,390.80 from the Defendant her former employer on the basis of constructive trust or on the basis of a claim based on money had and received by the Defendant for the use of the Plaintiff. The Plaintiff’s Case 2.It is not in disputed that the Plaintiff, in the period from 9th May 1985 to 25th January 1994, was an employee of the Defendant. It is the Plaintiff’s case that at the time when the Plaintiff resigned from the Defendant, she was a Senior Supervisor of the Defendant with a basic monthly salary of HK$10,200.00 per month. Apart from the basic monthly salary, the Plaintiff was also entitled to overtime payment, diligence bonus and year-end bonus. 3.It is not disputed that from 1st March 1989 until her resignation on 25th January 1994, the Plaintiff joined of the provident fund scheme of the Defendant as a member. The provident fund scheme was initially managed by American International Assurance Company (Trustee) Limited and later by American International Trustee Limited (collectively “AIA”). 4.The Scheme provided, inter alia, that:-
5.It is common ground that the Plaintiff’s benefit entitlement under the Scheme upon cessation of employment with the Defendant on 25th January 1994 was the sum of HK$55,542.72. The Plaintiff’s case is that she is entitled to the return of said sum of HK$55,542.72 from the Scheme upon her resignation from the Defendant on 25th January 1994. 6.It is not in dispute that on or about 27th February 1998, the Defendant received from AIA a sum of HK$48,390.80 (“the Sum”) which Sum was part of the Plaintiff’s benefit entitlement of HK$55,542.72 under the Scheme due to the Plaintiff upon cessation of her employment with the Defendant. 7.It is the Plaintiff’s case that the Defendant received the Sum on behalf of the Plaintiff and for the use of the Plaintiff and thereby constituted itself as a constructive trustee to hold the Sum in favour of the Plaintiff. It is therefore the Plaintiff’s case that the Defendant was and is accountable to the Plaintiff as a constructive trustee of the Sum. 8.Further, or in the alternative, the Plaintiff claims against the Defendant for the Sum being money payable by the Defendant to the Plaintiff as money had and received by the Defendant for the use of the Plaintiff. The Defence 9.The Defendant admits that the Plaintiff was employed by the Defendant from 9th May 1985 to 25th January 1994 and ceased to be an employee of the Defendant on 25th January 1994. 10.By a Deed of Participation made between the Defendant and AIA on 10th July 1989 (“the Deed”), the Defendant became a contributing employer to the AIA Retirement Fund Scheme (“the Scheme”) for the benefit of the Defendant’s employees. 11.The Defendant referred to the following clauses of express terms of the Deed:
12.The Defendant admits that at the time when the Plaintiff ceased to be a member of the Scheme, she was entitled to the following sum:
13.The Defendant also put the Plaintiff to strict proof that she was entitled to the return in full of the sum of HK$55,542.72. 14.The Defendant also admits that the Defendant received the sum of HK$48,390.80 from AIA on about 27th February 1998. 15.It is not in dispute that AIA issued a cheque in favour of the Plaintiff in the sum of HK$7,151.92 being the balance of the benefit entitlement of the Plaintiff after deducting there from HK$48,390.80. This cheque was sent to the Defendant for onward transmission to the Plaintiff in about October 1994. However The Defendant had not transmitted this cheque to the Plaintiff. 16.It is the Defendant’s case that as the sum of HK$48,390.80 was issued by cheque to the order of the Defendant by AIA. It is the Defendant’s case that this payment was made pursuant to the exceptions set out under Rule 9. Such being the case the sum of $48,390.80 was a sum that the Defendant was entitled to receive and the Plaintiff is disentitled from receiving the said sum of HK$48,390.80. 17.The Defendant also pleaded that this action is statute barred by virtue of the Limitation Ordinance. Although the Defendant also pleaded laches, the Defendant’s Counsel conceded at the close of the case that the Defendant is no longer seeking to rely on this nor on acquiescence which was also pleaded in the Defence. 18.The Defendant on the above basis pleaded that the Plaintiff was not entitled to claim on the basis of constructive trust or on the basis of money had and received. The Issues
The 1st Issue The Plaintiff’s Evidence 19.The Plaintiff has given evidence that she has not received the sum of HK$48,390.80. She resigned on the 25 January 2004 from employment with the Defendant because her father was gravely ill and she was the only other member of the family. She was distressed by his illness and resigned in order to look after him. She did not remember her benefit entitlement in her Provident Fund until sometime in May 2003 when she suddenly remembered that the defendant had not paid her, her entitlement under the Scheme. It was on or about 20th May 2003 that she contacted the personnel staff of the Defendant about her provident fund entitlement. She also enquired from AIA and attended at its office on 27th June 2003. There she learnt that the total amount payable by AIA to herself was in the sum of HK$7,151.92. She knew that her entitlement was more than this sum. So she refused to collect the cheque for this sum. After a while, AIA by its letter of 30th September 2003 confirmed that her total benefit entitlement upon cessation of employment with the Defendant on 26th January 1994 was HK$55,542.72. It also stated that out of this total sum, a sum of HK$48,390.80 was paid to the Defendant upon the Defendant’s request with supporting documents. It further stated that a benefit cheque for the sum of HK$7,151.92 being the remaining balance together with a benefit statement was sent to her via the Defendant in October 1994. 20.She continued to press the Defendant for an explanation but received no substantive reply. Upon further enquiry by the Plaintiff, AIA by its facsimile of 27th October 2003 confirmed that a cheque for a total sum of HK$440,436.60 payable to the Defendant was presented for payment by the Defendant on 27th February 1998. The said sum of HK$440,436.60 included the sum of HK$48,390.80 which represented a portion of her provident fund benefit entitlement. The Plaintiff stated that this sum of HK$48,390.80 belonged to her and the money so paid to the Defendant was for her use and was for the Defendant’s onward transmission to her. The Defendant was and still is holding the said sum of HK$48,390.80 upon trust for her. 21.The Plaintiff states that she had not received the said sum of HK$48,390.80. Her only bank account, a savings account does not show a deposit of a sum in an amount close to this sum between Jan 1994 to 1998. The Defendant’s Evidence 22.There is no dispute that the Defendant received the sum of $48,390.80 being part of a cheque issued to it by AIA in the sum of HK$440,436.60 and this cheque was deposited into the Defendant’s Staff Installment Account by the Defendant in February 1998. AIA first issued a cheque to the Defendant in the sum of $347,188.23 in October 1994 which cheque included the sum of HK$48,390.80 from the benefit entitlement of the Plaintiff. However, this first cheque was not paid into the Defendant’s bank account and in February 1998, Mr. Charles Lam of the Defendant requested AIA to issue a cheque incorporating this sum to them. Subsequently AIA issued a cheque in the sum of $440,436.60 in the name of the Defendant. This sum included the sum of $347,188.23 and other sums in other cheques not banked by the Defendant. The cheque was issued for this sum on 26 February 1998 to the Defendant. This cheque was paid on 27 February 1998. This is evidence in a document discovered by AIA at page 96 of Section C of the Bundle of Documents (“BDC”) headed Appendix A. 23.The Defendant’s case is that the sum of HK$48,390.80 was an amount paid to the Defendant for the Defendant’s benefit and not for onward transmission to the Plaintiff. The Defendant is seeking to establish that AIA issued the cheque to it comprising the sum of $48,390.80 by virtue of Rule 9 of the First Schedule to the Deed and that AIA must have received evidence in writing showing indebtedness of the Plaintiff to the Defendant signed by the Plaintiff. However, the Defendant is not able to provide a copy of such an acknowledgment of indebtedness signed by the Plaintiff nor call firsthand evidence in support of its case because all the staff who dealt with this in 1994 has left the Defendant’s employment. The staff Mr. Charles Lam who was the Assistant to the Managing Director who should have known about this matter is no longer in the employment of the Defendant and upon enquiry stated that he could not remember. The Plaintiff called Chan Man Chi, a Senior Supervisor of the Defendant to give evidence, and she adduced documents from which she sought to draw conclusions. However such conclusions could not be drawn by her without speculation as she was not in the employment of the Defendant at the relevant time in between 1993 to 1994 and she did not know of the practice prevailing at the time in the Defendant in dealing with the provident fund benefits of its employees. She was not working for the Defendant when the cheque $48,390.80 was issued. Hence it is for the Court to decide on the weight to be given to the documents and also to construe the contents of the documents. These will be referred to further down in the judgment. 24.As the Defendant has no direct evidence of a receipt signed by the Plaintiff showing receipt of the sum of HK$48,390.80 from the Defendant prior to the issue by AIA of the cheque in the sum of HK$347,188.23 to them, the Defendant’s case heavily relies on the evidence from AIA. The Defendant relies on evidence from AIA related to the practice and procedure of AIA that was in force in the period of 1993 to 1994 to argue that AIA would not have released the sum of $48,390.80 to them unless they had been authorized to do so pursuant to Rule 9 of the Deed. 25.The Defendant called Ms. Auw Yang May who is and has been employed since September 1998 by AIA Pension & Trustee Co. Ltd., formerly known as American International Trustee Limited. At the time she signed her witness statement she was an Assistant Manager of AIA. It is clear that Ms. Auw Yang did not have first hand knowledge of the practice in force in AIA between 1993 and 1994. She relies on the information from Ms. Pang So Sum, Rio who had worked in AIA since February 1993 and from perusal of documents. Ms. Pang So Sum, Rio, left the employment of AIA at the time of the trial and was not available to give evidence. 26.Ms. Auw Yang referred to the terms of the Deed and the Rules and her understanding of the practice in force in AIA from the time of her employment to state that AIA had administrative guidelines under which a set of procedure for approving and issuing payment to employer or employee must be strictly adhered to and followed. 27.She referred to Clause 6 of the Deed which provided that payment of any benefit due to an Employee is to be made direct to such Employee, his nominee, or legal personal representative. Rule 9 of the First Schedule of the Deed provides for exceptions to such provision as referred to aforesaid. Rule 10(a) provides that the benefit payable to a Member shall be transmitted to the order of the Member. 28.She stated that regarding the Rules, in particular those cited aforesaid, there are administrative guidelines of AIA under which a set of procedure for approving and issuing payment to an employer or employee exists and these must be strictly adhered to and followed. She states the guidelines and procedure as follows:-
29.She stated that under Rule 9, according to AIA’s administrative guidelines, AIA would only make out a payment from the Member’s benefit entitlement in favour of the employer upon written application of the employer with supporting documentation for reimbursement of:-
30.Where the employer has not supplied sufficient documentary proof to AIA the application will be refused and the employee’s benefit entitlement must be paid to the employee. 31.In short Ms. Auw Yang stated that even if all the supporting documents could not now be retrieved by AIA because of the lapse of time it is unlikely that AIA would have released the sum of HK$48,390.80 to the Defendant without AIA being satisfied with the entitlement of the Defendant to this sum pursuant to Rule 9 of the Deed. 32.She stated that a supporting document for release of member benefit to an employer could be like a Confirmation of Receipt signed by Tse Ip Ping showing receipt of cash in the sum of HK$33,153.00 on 8 July 1994 at page 99 of Bundle of Documents Section B (“BD-D”). She stated that this is a document that a client of AIA would produce to discount the benefit entitlement of a Member so that the discounted sum would be given to the client. Under cross-examination as regards whether this document is a sufficient document for AIA to release money to the client employer at present, she stated that now she would also telephone the Member employee to make enquiries whether he or she had signed the document. 33.Ms. Anw Yang found documents related to the Plaintiff’s benefit entitlement in the warehouse of AIA and she described these. She referred a Benefit Statement dated Oct 26 1994 showing the benefit entitlement of 20 Member employees of the Defendant at pages 149-150 of BD-C. The benefit entitlement of the Plaintiff is listed as the 4th name at page 149 of BD-C as being $55,542.72. Under cross-examination she explained the practice now is for AIA to send the Benefit Statement to a client related to its employees after AIA receives Termination Report related to the employees from a client. 34.She referred to pages 151 to 152 which shows an Accounting Memorandum dated October 27 1994 prepared by administrative staff of AIA for the accounting department of AIA to issue cheques. The Accounting Memorandum stated “Please issue cheque to Sogo Hong Kong Co. Ltd HK$347,188.23”. This sum is made up of a portion of the benefit entitlement of the 20 employees listed in the Benefit Statement at pages 149-150 of BD-C. She stated that the person who prepared this Accounting Memorandum signed it and it is then countersigned by the Supervisor. She referred to a document at page 96 of BDC which is headed Appendix A referred to earlier probably made on about 26 February 1998. In this document is stated “Cheque 341005 issued in October 1994 is the refund of the Members’ benefit payable to Sogo Hong kong Co. Ltd.”. Cheque 341005 is the cheque issued by AIA in the sum of HK$347,188.23. The top part lists out the various sums related to portions of employees benefit of the former employees listed in the Benefit Statement at page 149 to 150 of BDC referred to earlier. This make up the total sum of $347,188.23 which is the amount in the said cheque. However under cross-examination she stated that she did not know under what circumstances Appendix A was prepared. 35.Ms. Auw Yang stated that when a cheque is issued to a client, the cheque is for the benefit of the client. Such a cheque would be issued to a client when the client employer has documents to support that such a cheque should be issued to it from the benefit entitlement of its employees. 36.She stated that the cheque incorporating the sum of HK$48,390.80 was issued to the Defendant out of the Plaintiff’s benefit entitlement with a remaining balance of HK$7,151.92 in this entitlement. A cheque for the sum of HK$7,151.92 issued in the name of the Plaintiff was transmitted to the Defendant for delivery to the Plaintiff in October 1994. Particulars of this cheque issued to the Plaintiff is stated in the lower portion of the Accounting Memorandum at page 151 of BDC referred to above. Other cheques representing the balance of benefit due to the other 19 former employees listed in the Benefit Statement at pages 149 to 150 of BDC is also particularized. 37.She stated that apart from the Plaintiff, none of the listed employees in Appendix A at page 96 of BDC had filed complaint about failure to receive provident fund entitlement. 38.Under cross-examination by the Plaintiff’s Counsel, she stated that since she joined the Defendant Company, in 1998, AIA had printed out the Benefit Statement of employees upon receiving the Termination Report from a client related to termination of employment of employees. AIA would only issue cheques to a client for an employee’s benefit entitlement with evidence of indebtedness due from the employee to the client employer. However she did not find any supporting documents similar to the Confirmation of Receipt signed by Tse Ip Ming at page 99 of BDB which was signed by the Plaintiff from her search in the warehouse of AIA. She only found the four pages namely the Benefit Statement dated 26 October 1994 relating to the 20 former employees and the Accounting Memorandum related to issue of cheques to pay the Defendant in respect of the employees’ portion of entitlement totaling $347,188.23 and cheques to each of the 20 former employees for the balance of their benefit entitlement at pages 149 to 152 of BDC. 39.She stated under cross-examination that the present practice is that where there is an application from the employer for issuing a split cheque related to the employee’s entitlement namely one cheque to the employer and one cheque to the employee, the administration department would go through the application and then prepare an Accounting Memorandum for the issue of the cheques. She is suggesting that in this case since the Plaintiff’s benefit entitlement was split with $48,390.80 being incorporated in a cheque to the Defendant and the balance of $7,151.92 in a cheque issued in the name of the Plaintiff, there must have been an application for this by the Defendant with supporting documents which had been approved by the administration of AIA leading to an Accounting Memorandum being prepared to issue the cheques related thereto as shown in page 151 and 152 of BDC including the cheque in the sum of $347,188.23 to the Defendant. 40.The Defendant called Ms. Tse Ip Ming to give evidence. Ms. Tse Ip Ming’s name appears in the Benefit Statement dated October 26 1994 being the 5th name at page 149 of BDC. Her name is the name immediately under that of the Plaintiff’s name in this Benefit Statement. Her total benefit was stated to be HK$36,819.79. However in the Accounting Memorandum dated 27 October 1994, at page 151 of BDC, it is noted that a cheque Number 341009 in the sum of HK$3,666.79 was drawn up in her name. 41.Tse Ip Ming gave evidence for the Defendant. She adduced her witness statement at pages 93 to 94 into evidence as her evidence-in-chief. She stated that she was employed by the Defendant in its Cashier Department from 15th May 1985 to 24th August 1993. She tendered her resignation to the Defendant and her last date of service was 24th August 1993. When she left the employment of the Defendant, she was informed by the Personnel Department of the Defendant that she would receive her Provident Fund entitlement under the Scheme within a period of about 6 months. 42.However, after a long period of over 11 months, she had not received notification from the Defendant that she could collect her entitlement under the Scheme. She rang the Personnel Department of the Defendant and chased for payment. The Staff who answered her call (after making some enquiries) told her that she could go to the Defendant’s office to collect payment. 43.It was on 8th July 1994, about one year after she left the employment of the Defendant that she went to the Defendant’s offices to collect her benefit entitlement. She was then given a handwritten note by the Defendant’s staff which showed the Defendant’s calculation of her Provident Fund entitlement under the Scheme in the sum of HK$33,152.95. This is at page 96 of BDB, and a computer print-out showing her entitlement (at page 97 of BDB) was given to her. The staff from the Defendant’s Personnel Department then explained to her the contents of page 96 of BDB and paid cash to her in the sum of HK$33,153.00 and asked her to sign a Confirmation of Receipt. This Confirmation of Receipt referred to earlier is shown at page 99 of BDB. She signed that on 8th July 1994. 44.She stated under cross-examination that she was not informed that the amount that was given to her was not her full benefit entitlement under the scheme. She was only told that there was a further cheque issued by AIA to her in her name for the balance of the entitlement in the sum of HK$3,666.79 when she went to see the Defendant’s solicitors for the purpose of the preparation of her witness statement. Reference to the issue of a cheque in this sum by AIA is stated in the Accounting Memorandum at page 151 of BDC aforesaid. The Defendant had never informed her nor approached her to collect this same cheque issued to her by AIA. When she left the Defendant’s employment, she did not owe the Defendant any money. When she picked up the cash for HK$33,153, she thought that was her total entitlement under the Scheme. At the time of payment to her she was not aware that the money that was used to pay her this sum in cash was not from AIA but from the Defendant which paid her first before receipt of the funds from AIA. In fact, when she telephoned to ask about her benefit entitlement 11 months after she resigned, she was told the money was ready for her to collect. She was surprised that the Defendant paid this sum to her in cash for she expected to be paid by cheque. During her employment with the Defendant she was paid her salary through standing instruction into her bank account. 45.The Defendant also called Chan Man Chi, referred to earlier, a Senior Supervisor of the Defendant. The crucial part of her evidence related to documents which she stated that she found in the warehouse of the Defendant after having been instructed to search for these. She describes these in her Supplemental Witness Statement which was adduced into evidence. 46.She stated that during her search she located some records of 8 former employees of the Defendant who resigned between 1994 to 1998. These documents show the manner in which the benefit entitlement of these 8 former employees were dealt with under the Scheme. She refers to these as documents marked “CMC-1”. They are annexed to her Affidavit at pages 38 to 47 of BDB. In fact these pages show Termination Reports prepared by the Defendant. These Termination Reports are dated respectively, the last day of December 1992, and the last day of the months from March to June 1993, respectively and on August, September, November1993, January 1994 and March 1994. The Termination Report dated 31 January 1994 was one related to the resignation of the Plaintiff who resigned on 25th January 1994. 47.She also located 6 individual files of ex-employees of the Defendant who left the employment of the Defendant during the period from July 1994 to August 1996. She referred to these as the documents marked Exh “CMC-2” annexed to her Affidavit at pages 49 to 71 of BDB. 48.Particulars of the 8 former employees of the Defendant are stated in paragraph 4 of her Supplemental Witness Statement at pages 22 to 24 of BDB. Apart from Chiu Kai Wing whose last day of employment was on 6 July 1994 and Lau Yuen Ling whose last day of employment with the Defendant was on 31 October 1994, the remaining 6 of these former employees of the Defendant left the employment of the Defendant in the period from 1995 to 1998. Each of these 8 former employees were paid their benefit entitlement by a cheque issued by AIA and each had a Member’s Termination Benefit Statement in computer printed form showing the entitlement which is commensurate with a cheque subsequently issued by AIA to them for the benefit entitlement stated in the relevant Benefit Statement. It seems that these records related to the 8 former employees do not show a system of payment of benefit entitlement to former employees that is supportive or relevant to the Defendant’s Defence. Analysis of the Evidence 49.The Plaintiff’s Counsel submits that he agrees entirely with comments made by the learned Presiding Officer of the Small Claims Tribunal at the hearing before the Tribunal prior to the transfer of this claim to the District Court, that it is impossible for Mr. A to prove that he has not received payment from Mr. B, and that it is for Mr. B to prove that he has paid Mr. A. 50.Hence, in coming to the finding in this issue, it is incumbent for this Court to find whether the Defendant has proved on the balance of probability that it has paid the Plaintiff the sum of HK$48,390.80, so that it is entitled to be paid this sum by AIA for its own benefit. 51.As stated above, the Defendant is not able to locate a confirmation of receipt signed by the Plaintiff that the Defendant had paid this sum to the Plaintiff. The Defendant had sought to establish that a system and a procedure existed whereby AIA would not have paid the Defendant the benefit entitlement to the member employees of the Defendant unless the Defendant had established by documentary evidence that the Defendant was entitled to be paid a portion of the benefit entitlement of the member employee under the provision of Rule 9. AIA is a trustee of the benefit entitlement of member employees and has an obligation to pay such benefits to the member employee upon resignation of the employee pursuant to Clause 6 of the Deed and Rule 10(a) of First Schedule of the Deed referred to aforesaid. Normally an insurance company of repute would be well aware of its duty as a trustee and would carefully act in accordance with the terms of the trust and in this case in accordance with the Deed. Evidence To Infer Such A System 52.The legal obligation of AIA under the Deed referred to aforesaid, in Clause 6, Rules 9, 10(a) of the First Schedule imposed on AIA required AIA to pay the benefit payable to a member to the order of that member. AIA could not pay the benefit due to a member to the order of the Defendant except as provided under Rule 9 aforesaid. In the normal course, any insurance company would act in accordance with the contractual obligations imposed on it by a Deed such as this Deed of Participation. Failure to do so would cause it to be subject to litigation and serious consequences related to its name and reliability. 53.Ms. Auw Yang who was employed by AIA since 1998 is well able to speak of the system that existed since 1998. She is an Assistant Manager and is in a position of responsibility in AIA. She is well able to speak of the system related to payment of employee benefit to an employer or employee as existed from the time of her employment with AIA. She says that she had been informed by Ms. Pang So Sum, Rio who had been employed by AIA since February 1993 that the system existing in the years 1993 to 1994 was more or less the same as at present. As referred to earlier the present system requires a Termination Report to be prepared by the client to show the terminations of its staff on a monthly basis. Any application for payment to the client out of the employee’s benefit entitlement under Rule 9 of the First Schedule has to be supported by documentary evidence. Such documentary evidence is vetted by administrative staff and thereafter checked by a supervisor before an Accounting Memorandum is written for the accounts department to issue cheques. 54.In this case, the Accounting Memorandum dated October 27 1994 which covered the issue of the cheque in the sum of HK$347,188.23 to the Defendant clearly state details of the issue of 20 other cheques for remaining benefit entitlement due to the 20 staff listed in the Benefit Statement (which includes the Plaintiff and Tse Ip Ming) at pages 149 to 150. It is clear that each of the 20 former employees benefit entitlement were split up with a portion payable to the Defendant which totalled $347,188.23 with a remaining balance due to each of the 20 former employees. Would AIA issue a cheque for portions of the benefit entitlement of the 20 former employees without careful perusal of documentary support for such? 55.Tse Ip Ming, one of the 20 former employees listed in the Benefit Statement at pages 151 and 152 of BDC stated that she had been paid in cash the sum of HK$33,153.00 and had signed the Confirmation of Receipt dated 8 July 1994 at page 99 of BDB. Although this Confirmation of Receipt states that the sum is received by her from AIA through the Defendant, yet it is nevertheless an acknowledgement of her receipt of the said sum in cash from the Defendant. Ms. Auw Yang said that she would accept this Confirmation of Receipt as evidence of payment of a client to its former employee although she would, on the safe side, also telephone the former staff to ensure that he or she had received payment of the sum stated therein. 56.The Defendant is able to locate Termination Reports at pages 178 to 186 of BDC. All the former 20 employees whose names are shown in the Benefit Statements at pages 151 to 152 of BDC are covered in the Termination Reports spanning a period from December 1992 to January 1994. Against the name of each of these 20 former employees named in these Termination Reports there is the endorsement under the column headed Date of Receipt words, “by cash” and a number in the next column. Some have the words “by cash on…” a certain date. The Termination Report relevant to the Plaintiff has the words under the column headed “Date of Receipt” the words, “by cash on 27.7.94”. 57.On the evidence aforesaid I find on a balance of probability, a system or a procedure as stated by Ms. Auw Yang must have existed at the time in question namely between 1993 to 1994 which provided guidelines and procedures related to the issue of cheques to an employer for a portion of the benefit entitlement due to its employee. Has the Defendant Established Payment of $48,390.80 to Plaintiff 58.The Defendant had not been able to locate a copy of Confirmation of Receipt signed by the Plaintiff. Although the Termination Reports were not explained by the writer or maker as to what the contents mean, and such documents are hearsay, yet I do give some weight to these. There is no allegation or evidence to suggest that such documents these Termination Reports at pages related to the 20 former employees listed in the Benefit Statement at pages 149 and 150 of BDC are not authentic. It is stated by Ms. Auw Yang that Termination Reports have to be sent to AIA in order for AIA to process payment of benefit entitlements to the member employees of the Defendant. These Termination Reports are printed with the name of AIA and are the printed forms of AIA. I realize that the words under the column headed Date of Receipt are hearsay with no explanation by its writer as regards their meaning. I do however note that the words written therein have been so written and the words carry the natural meaning. 59.If the system existed were there failures in the system. Is the failure of the Defendant to pay the provident fund of Tse Ip Ming for 11 months or the preparation of a Benefit Statement at pages 149-150 of BDC of 20 including employees who resigned in a period spanning 14 months show the breakdown of this system? Ms. Auw Yang stated that AIA would ensure that benefit payments were made to member employees within 30 days of receipt of Termination Report. In which event the Benefit Statement of employees should be issued within 30 days from the date of receipt of Termination Reports of employees. Further, there is no explanation why the cheque in the sum of $347,188.23 was not cashed by the Defendant for over a period of 3 years 3 months. The Defendant also failed to inform the former 20 employees listed in the Benefit Statement at pages 149 to 150 of BDC that they had cheques issued to them by AIA waiting for their collection. Could there have been a failure of the system? If so, where did the system fail? Was the delay caused by the failure of the Defendant to send the Termination Reports at pages 178 to 186 spanning the months December 1992 to January 1994 promptly to AIA, or was it AIA that failed to promptly process the Termination Reports promptly? 60.In the evidence of Chan Chi Man it was stated that the cheque in the sum of HK$440,435.40 which was issued in February 1998 to the Defendant to replace the cheque in the sum HK$347,188.23, was paid into the Staff Installment Account. This is an account related to reimbursement by employees of the cost of purchases of goods they bought on credit. Why was this cheque paid into this account when Tse Ip Ming as well as the Plaintiff stated that they did not owe the Defendant money arising from purchase of goods from the Defendant on credit from the Defendant. Clearly the amount paid out to Tse Ip Ming was stated by the Defendant to be an advance of provident fund benefit to Tse Ip Ming before such was paid to the Defendant by AIA. There is no explanation of this. 61.There is no evidence to show what caused the cheque of HK$347,288.23 dated 27 October 1994 to be issued so long after the resignation of Kwan Kwok Wa named in the Benefit Statement at page 149 at BDC who resigned in December 2002, or so long after the resignation of the Plaintiff who resigned in January 1994. The cheque was issued on 27 October 1994. 62.There is also no explanation as regards why cash was paid to Ms. Tse Ip Ming for the portion of benefit entitlement by the Defendant and the Defendant did not pay her by cheque. The Defendant admitted that it has no evidence to suggest that severance pay or long service pay had been paid to the Plaintiff. The Defendant further did not advance evidence that the Plaintiff owed money to the Defendant arising from the staff purchase scheme whereby staff purchased goods from the Defendant on credit. The Defendant however suggested by the evidence of Tse Ip Ming that the Plaintiff’s situation must have been like that of Tse Ip Ming, that the Plaintiff was paid $48,390.80 out of the Defendant’s funds before the Defendant received the cheque of $347,188.23 on 27 October 1994. The Defendant supported this by the Termination Reports of the 20 former employees of the Defendant listed in the Benefit Statement at pages 149 – 150 of BDC and that for the Plaintiff wherein under the column headed Date of Receipt, in the case of each of the 20 former employees there is an endorsement “by cash” and a number and some had the words “by cash on…” a certain date. The Termination Report of the Plaintiff has the endorsement stated “by cash on 27.7.94”. The Defendant stated that because of the long lapse of time between the event in July 1994 and the time of filing of the claim, documents such as Confirmation of Receipt signed by the Plaintiff could not be located. 63.I consider all the aforesaid and all the submission of the Plaintiff’s Counsel referred thereto. Yet, balanced as against these queries, is the equally unlikely possibility that AIA would have paid the Defendant a sum which incorporated a portion of the Plaintiff’s benefit entitlement without some documentary evidence that the Defendant had paid the Plaintiff the same sum, for to do so AIA would have been in breach of trust. 64.Further, in all probability, when preparing the cheque of $347188.23 as well as 20 cheques for each of the former employees of the Defendant listed in the Benefit Statement at pages 149 to 150 of BDC, AIA had to consciously divide the benefit entitlement of these 20 former employees with a portion for the Defendant and a remaining portion for each of the former employees. Some support for this can be found in the document at Appendix A at page 96 of BDC, a document discovered by AIA which explained the issue of this cheque, stated “Cheque 341005 issued in October 1994 is the refund of the Members’ benefit payable to Sogo Hong Kong Co. Ltd.” AIA could not have done this without supporting documents. Rule 9 of the First Schedule required an acknowledge of receipt or indebted signed by former employees. I accept the Defendant’s Counsel’s submission that the inherent probabilities of the case is AIA would not have issued payment of part of the benefit entitlement due to the Plaintiff to the Defendant without clear proof of the Defendant’s entitlement to be paid this sum such as the production of a confirmation of receipt signed by the Plaintiff that the Plaintiff had been paid this sum by the Defendant. I find that on the balance of probability based on all the evidence aforesaid that the Defendant had paid the Plaintiff the sum of $48,390.80 and had provided evidence of this to AIA before AIA issued the cheque in the sum of $347,188.23 incorporating this sum to the Defendant. 65.Further, I am not able to find that the Plaintiff is a reliable and credible witness. I do not accept her evidence that she did not receive the provident fund entitlement from the Defendant and between the time of her resignation from the Defendant on 25 January 1994 until May 2003, namely for a period of over nine years she did not remember that she had not been paid her provident fund entitlement by the Defendant. I find this to be inherently improbable despite considering that she had gone through the stress of caring for a sick father who later died she thereafter experienced a sad bereavement. The Plaintiff had been in other employment after resignation from employment with the Defendant and it is unlikely that whilst being employed by Wing On Department Store for several months and thereafter by the Hospital Authority for many years she had not been able to remember the matter of her provident fund entitlement, were it true that she had not been paid the said sum. The Plaintiff strikes me as a person who is capable and assertive and well able to look after her affairs. This makes it even more unlikely that she was not aware for 9 years that she had not been paid her provident fund. In coming to this conclusion I had considered all the evidence of the Plaintiff that she gave in support of her contention that she had not received the sum of HK$48,390.80. 66.I therefore find this issue against the Plaintiff and in favour of the Defendant. The 2nd Issue 67.Having found on the facts aforesaid, I find that the Plaintiff has not established that she has a claim against the Defendant on the basis of constructive trust. The 3rd Issue 68.Equally, on the facts I find that the Plaintiff does not have a case of money had and received against the Defendant for the sum claimed. The 4th Issue 69.This issue does not have to be addressed in the light of my finding on the 1st issue. 70.I therefore dismiss the Plaintiff’s claim against the Defendant and I grant an order nisi for costs of the Defendant to be paid by the Plaintiff to be taxed if not agreed with Certificate for Counsel. The Plaintiff’s own costs be taxed in accordance with Legal Aid Regulations.
Representation: Mr. Allen Lam instructed by Legal Aid Department for the Plaintiff. Mr. Benjamin Chain instructed by Messrs Sit, Fung, Kwong & Shum for the Defendant. |
Cases cited in this judgment
Further hearings and rulings under DCCJ 3024/2004