Sun Chi Wai v. Bliss Success Ltd

DCCJ 1749/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1749 OF 2006

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BETWEEN

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Coram : Deputy District Judge R. Cheung in Court

Dates of Hearing : 17^th, 18^th, 21^st and 22^nd May 2007

Date of Handing down Judgment : 6^th July 2007

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JUDGMENT

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1.The Plaintiff is the former employee of the Defendant. Briefly, his case is that he was sent by the Defendant to China to see to the delivery of certain goods by the Defendant's supplier to the Defendant. He signed a guarantee to procure the release of the goods by the supplier. The Defendant did not pay the supplier. The Plaintiff was therefore detained. Two sums were paid to secure his release: US$5,000.00 and RMB80,000.00. The Defendant is liable to pay him these two sums. It would be convenient to refer to the Plaintiff's claims for these two sums as his claims for special damages. The Plaintiff also claims for general damages to be assessed for the mental distress and anxiety he suffered when he was detained in China. He has not specified an amount.

2.The Defendant denies that it had asked or authorised the Plaintiff to sign any guarantee and does not admit that the Plaintiff was detained in China. The Defendant has a counterclaim against the Plaintiff. It is the Defendant's pleaded case that it had provided the Plaintiff and one Mr. Leung Kwan Pak (PW2) who were both at the time under the Defendant's employ with the sums of $1,000.00 and RMB18,000.00 as travelling expenses. The Plaintiff has failed to account for these two sums of money. The Defendant is the beneficial owner of these two sums of money. The Defendant claims for a declaration that these two sums of money are held by the Plaintiff on resulting trust for the Defendant, an account, as well as repayment by the Plaintiff on the basis of money had and received.

3.The Plaintiff denies that the Defendant has ever paid him the two sums of money.

Issue on Jurisdiction

4.The District Court has no jurisdiction to try any claim which is within the exclusive jurisdiction of the Labour Tribunal or the Small Claims Tribunal.

5.The Defendant raised the challenge about jurisdiction at trial instead of doing it as it should, prior to the trial in its pleadings. I allowed the objection to be raised.

6.At an early stage of the trial, the issues about jurisdiction were framed. The views and stances of the parties were sought for and clarified in the process.

7.In relation to the Plaintiff's claims for special damages in the sums of US$5,000.00 and RMB80,000.00, the following issues were framed: "(1) That the Plaintiff's claim is not a claim for a sum of money which arises from the breach of a term in the contract of employment between the Plaintiff and the Defendant as it is a claim for a sum of money which arises from the fact that the Plaintiff was acting as the Defendant's Agent at the material time such that the duties said to be owed by the Defendant to the Plaintiff under paragraph 3 of the Statement of Claim were duties owed by the Defendant in its capacity as the Principal of the Plaintiff instead of in its capacity as the Employer of the Plaintiff, and hence the claim is not within Paragraph 1(a) of the Schedule to the Labour Tribunal Ordinance; and (2) That the Plaintiff's claim is founded in tort. Notwithstanding the contract of employment between the Plaintiff and the Defendant, the Defendant owed an independent duty of care in tort as set out in paragraph 4 of the Statement of Claim. The Defendant was in breach of that duty of care and the Plaintiff had suffered consequential loss and damage in the payment of the above two sums."

8.In relation to the Plaintiff's claim for general damages to be assessed for the mental distress and anxiety he suffered when he was detained in China, the following issue was framed: "(3) That the Plaintiff's claim is founded in tort. Notwithstanding the contract of employment between the Plaintiff and the Defendant, the Defendant owed an independent duty of care in tort as set out in paragraph 4 of the Statement of Claim."

9.Counsel for the Plaintiff has confirmed that the Plaintiff's claims for special damages in the sums of US$5,000.00 and RMB80,000.00 are not restitutionary claims. I would focus on these two claims for the time being and come back to his claim for general damages later.

10.The Schedule to the Labour Tribunal Ordinance, Cap. 25 sets out the claims which fall within the exclusive jurisdiction of the Labour Tribunal.

11.Paragraph 1(a) of the above Schedule is apposite. A claim for a sum of money which arises from the breach of a term, whether express or implied, of a contract of employment is within the exclusive jurisdiction of the Labour Tribunal if the employment is to be performed in Hong Kong. It is clear that the Plaintiff performed some of his duties in Hong Kong and this is reckoned as performance in Hong Kong: William Barry Preen v. Industries Polytex Ltd., Labour Tribunal Appeal No. 171 of 1995, 8 March 1996 considered and applied. So, does the Plaintiff's claim fall within the above Paragraph 1(a)?

12.It is of course the Plaintiff's position that his claims for special damages in the sums of US$5,000.00 and RMB80,000.00 are not within the exclusive jurisdiction of the Labour Tribunal. From the framed issues, the claims are outside Paragraph 1(a) of the above Schedule and not within the exclusive jurisdiction of the Labour Tribunal.

13.It is not absolutely clear if Counsel for the Defence has disputed that the state of the pleadings does not permit the framing of the above issues in the manner they were framed. I consider that he did. I would not accept such objection to be valid. The challenge on jurisdictional ground was made at the eleventh hour. Any amendment of the pleadings would result in delays and possibly an adjournment. Issues were thus framed. The parties were involved in the issue framing process. The framed issues were of course live issues in the trial.

14.Paragraph 3 of the Statement of Claim is in the following terms: "It was an implied term of the said Employment and/or duty at common law between the Plaintiff and the Defendant that the Defendant as an employer owed to the Plaintiff a duty to indemnify or reimburse the Plaintiff against all expenses, losses and liabilities incurred by the Plaintiff in the execution of the Defendant's instructions, or within the authority granted to the Plaintiff by the Defendant or during the reasonable performance of the Plaintiff's employment."

15.Paragraph 3 of the Statement of Claim has in fact pleaded a number of matters capable of different permutations:

(1)	It was an implied term of the said Employment and/or
(2)	duty at common law

that the Defendant as an employer (emphasis my own) owed to the Plaintiff a duty to indemnify or reimburse the Plaintiff against all expenses, losses and liabilities incurred by the Plaintiff

(1)	in the execution of the Defendant's instructions, or
(2)	within the authority granted to the Plaintiff by the Defendant or
(3)	during the reasonable performance of the Plaintiff's employment.

16.Paragraph 3 refers to the Defendant as "an employer". The expression is capable of denoting the engagement of an agent by a principal. It is not uncommon to refer to a construction company being employed by a real estate developer to erect a building. It is not uncommon to describe the former as the employer of the latter even though obviously the contract is a contract for service and not a contract of service.

17.The Defendant has sought further and better particulars of Paragraph 3. The Requests were: "1. State all the material facts upon the basis of which the implied term is alleged to arise" and "2. State all the material facts upon the basis of which the duty at common law is alleged to arise". The Plaintiff furnished the following Answers: "1. The Plaintiff was at all material times an employee of the Defendant and the term was implied by operation of law" and "2. See Answer to 1 above".

18.In a contract of employment (i.e. a contract of service), there may also be an incidence of agency. Employment may give rise to an agency relationship. Some employees have agency powers, some not.

19.In the present case, it is pleaded that the Defendant had employed the Plaintiff as its merchandiser. A merchandiser will at times act as the agent of his principal (the employer).

20.Even if it were to be accepted that the Plaintiff has pleaded that there was a contract of employment between the Plaintiff and the Defendant, it should not preclude the Court from finding that there was a breach of the duties owed by the Defendant towards the Plaintiff in their respective capacities as principal and agent in relation to each other: Chesworth v. Farrar & Another, (1967) 1 QB 407 considered and applied.

21.That however is not the end of the matter. Once found to be outside the exclusive jurisdiction of the Labour Tribunal, the Plaintiff's claim for US$5,000.00 falls squarely within the exclusive jurisdiction of the Small Claims Tribunal. I consider that I have no jurisdiction to try that claim. I take the view that the Plaintiff's claims for US$5,000.00 and RMB80,000.00 are two separate claims, not one. They were so pleaded in the body of the Statement of Claim and prayed for as individual items of relief. I consider that I may derive support for my view from Estinah v. Golden Hand Indonesian Employment Agency, HCSA 6/2001, 21 August 2001 in which Hon. Kwan J. said "A "claim" is not the same thing as a "cause of action", the latter denotes the factual or legal basis out of which a claim arose." Although Section 5(3) of the Small Claims Tribunal Ordinance provides that "a claim within the jurisdiction of the tribunal may be brought in another court if there is included in such claim a claim for some other relief, redress or remedy, other than a claim for costs", I do not consider that this proviso assists the Plaintiff. There is no other claim for some other relief etc. 

22.The Plaintiff's claim for RMB80,000.00 exceeds the jurisdiction ceiling of the Small Claims Tribunal and is within the jurisdiction of the District Court.

23.I would now turn to the Plaintiff's claim for general damages. Paragraph 4 of the Statement of Claim is relevant here. It reads as follows: "It was also an implied term of the said Employment and/or a duty at common law that the Defendant as an employer owed to the Plaintiff as an employee a duty to take necessary steps and use its best endeavours in restoring freedom of movement of the Plaintiff".

24.The Defendant has sought further and better particulars of Paragraph 4 and the Plaintiff has provided his Answers. All in all, the Plaintiff's pleaded case is that the duty at common law arose from the employment.

25.An employer may owe a duty of care towards an employee under the contract of employment or in tort. The Plaintiff's position is that the claim is grounded in tort. A claim in tort is outside the exclusive jurisdiction of the Labour Tribunal. But, whether or not the claim falls within the exclusive jurisdiction of the Small Claims Tribunal will depend on whether it is within the $50,000.00 jurisdiction ceiling of the Small Claims Tribunal. Although the Plaintiff has not pleaded the amount, the fact that this claim was brought to the District Court and maintained during the trial in the face of jurisdictional challenges is tantamount to an assertion that the amount is above $50,000. I consider that it is open to me to frame the issue for this claim as well as to try this claim.

26.If I have understood Counsel for the Defendant correctly, the Defendant has not contended that the Plaintiff's claim for general damages is outside the jurisdiction of the District Court.

27.As for the Defendant's counterclaim, the claim for repayment on the basis of money had and received is within the exclusive jurisdiction of the Small Claims Tribunal. The claims for a declaration and an account are not. Accordingly, by virtue of Section 5(3) of the Small Claims Tribunal Ordinance, supra, the counterclaim may be brought in the District Court.

Witnesses

28.The Plaintiff himself testified as PW1. He called the former employee of the Defendant Mr. Leung Kwan Pak as PW2. On the Defendant's side, only the Defendant's director Madam Fong Sai Quen testified as DW1.

The Plaintiff's evidence

29.In Court, the Plaintiff told his story as follows.

30.The Plaintiff was employed by the Defendant as its merchandiser with a monthly salary of $15,000.00 per month and he started work on 24 June 2005. DW1 gave the Plaintiff some documents and told him to follow up on the dealings between the Defendant and one Shenzhen Rongjian Technology Development Co. Ltd. ("Rongjian"). The documents included a Purchase Order No. PO26/05 dated 26 April 2005 for kid's jeans placed by the Defendant on Rongjian (see page 108 of the Trial Bundle, hereafter "TB108", mutatis mutandis) and a Purchase Order No. PO28/05 dated 3 May 2005 for man's jackets (see TB109). There was a dispute between the Defendant and Rongjian on these two deals at the time.

31.On 11 July 2005, Mr. Peter Wong ("Peter Wong"), the husband of DW1, gave the Plaintiff a memo telling him to speak to one Mr. Wang Ming Ding ("Wang") in relation to the two deals. That afternoon the Plaintiff went to Shenzhen and met Wang. A discussion was held. The Plaintiff spent the night at Shenzhen.

32.On 12 July 2005, the Plaintiff returned to Hong Kong.

33.On 13 July 2005, one Mr. Wan ("Wan") who acted as the representative of Wang in Hong Kong called the Defendant. The Plaintiff spoke to Wan. Wan agreed to provide compensation in the sum of RMB150,000.00 to the Defendant in relation to the two deals in two stages. At the 1st stage, the Defendant would be given a deduction in the price of the goods under the two deals for about RMB70,000.00 to RMB80,000.00. The remaining portion of the compensation (RMB80,000.00 or RMB70,000.00, as the case may be) would be applied towards deduction of the price of goods to be ordered by the Defendant in future.

34.After the telephone conversation, the Plaintiff on behalf of the Defendant issued a fax (see TB110) to Wan in confirmation of that understanding.

35.On 15 July 2005, DW1 instructed the Plaintiff and PW2 to go to Shenzhen to check the goods. They duly carried out their instructions.

36.On 16 July 2005 at about 8:30 am, the Plaintiff and PW2 arrived at the warehouse in Shenzhen where the goods were stored. Wang was there but he refused to release the goods. Wang said that as the Defendant had not yet provided him with a cashier order for the price, the goods would not be released.

37.The Plaintiff then received a fax from the Defendant which showed two cashier orders: one was for US$13,249.10 which he understood to be for the payment of the price of the goods under Purchase Order No. 26/05 and the other one was for US$91,781.45 which he understood to be for the payment of the price of the goods under Purchase Order No. 28/05.

38.As the actual cashier orders did not come into the hands of Wang, Wang did not give his permission for the release of the goods that day.

39.On 17 July 2005, Peter Wong called the Plaintiff and was informed of the situation.

40.On 18 July 2005, the Plaintiff met Wang for a discussion over dinner in Shenzhen.

41.On 19 July 2005, the Plaintiff met Wang again to process the documents necessary for the export of the goods to Hong Kong. The Plaintiff observed the process of the loading of the goods onto a container truck for delivery to Hong Kong. He reported to DW1 that the 1st truck was loaded only with kid's jeans whereas the man's jackets were still awaiting to be loaded onto a 2nd container truck.

42.At about 12:30 pm that day, the 1st truck with the load of goods arrived at Man Kam To in Shenzhen in readiness to cross the border for delivery of the goods to Hong Kong. The Plaintiff and PW2 went to a hotel to have their meal. He faxed the packing list of the goods loaded onto the 1st truck to the Defendant (see TB134-5). The packing list showed the goods to be kid's jeans.

43.At about 3 pm that day, Peter Wong called the Plaintiff and asked him to procure a deduction in the price of the goods loaded onto the 1st truck. The original price of the goods (which comprised part of the goods under the two deals) was about US$51,000.00. As there was a prior agreement with Wan that there would be a deduction in price of about RMB70,000.00 to 80,000.00 for the goods under the two deals, Wang agreed to reduce the price of the goods loaded onto the 1st truck to US$41,875.40. The Plaintiff informed Peter Wong of the result over the telephone and the Defendant accordingly prepared a cashier order in that amount (see TB136).

44.Wang sent Wan to the Defendant's office in Hong Kong to collect the cashier order. The secretary of the Defendant called the Plaintiff and told him that both DW1 and Peter Wong were not in the office.

45.The Plaintiff called DW1 at about 4 pm on 19 July 2005 (later on he said that it was on 20 July 2005) and DW1 told the Plaintiff that she was at Tsimshatsui to get the cashier order prepared. At about 5 pm that day, the Plaintiff received a faxed copy of the cashier order for US$41,875.40 at his hotel. The Plaintiff understood that Wang had not given permission for the 1st truck with the loaded goods to cross the border as Wang still had not received the cashier order. The Plaintiff called DW1 and the latter told him that she would send someone to deliver the cashier order to Shenzhen the following day.

46.The Plaintiff gave evidence that on 20 July 2005 at about 6 pm, he and PW2 took a taxi to Man Kam To at Shenzhen where the 1st truck loaded with the goods was stationed. Wang was there. Wang would not give permission for the 1st truck with the load of goods to cross the border as he still had not received the cashier order. Then Wang wrote out the guarantee (see TB137). The guarantee provided for inter alia the Plaintiff's assumption of personal legal liability towards Wang for the payment of the price of the goods loaded onto the 1st truck, in the sum of US$41,875.40. The Plaintiff signed and dated the guarantee and wrote down his Home Visit Permit number thereon. Upon seeing that, Wang gave permission for the 1st truck with the loaded goods to cross the border to Hong Kong. Up to this stage of his testimony, the Plaintiff had not yet mentioned any telephone conversation with DW1 prior to his signing of the guarantee.

47.The Plaintiff in his testimony later said that on 20 July 2005, he had a telephone conversation with DW1 while he was at Man Kam To. It was about 6 pm then. DW1 over the telephone assured the Plaintiff that she would send someone to deliver the cashier order to Shenzhen the following day. After the telephone conversation, the Plaintiff signed the guarantee at TB137. Up to this stage of his testimony, the Plaintiff had not yet mentioned his having read the contents of the guarantee to DW1 over the telephone before he signed it.

48.The Plaintiff in his evidence later said that he had read the contents of the guarantee at TB137 to DW1 over the telephone. DW1 told the Plaintiff that it was all right and that the Plaintiff should sign it. He therefore signed it.

49.On 21 July 2005, the Plaintiff called Peter Wong at about 8 am and asked when the cashier order would be delivered. Peter Wong said that he would let DW1 handle the matter. Wang and a group of men waited at the hotel where the Plaintiff and PW2 stayed.

50.After lunch time that day, a staff of Wang handed to Wang a fax from the Defendant (see TB141). In the fax, the Defendant indicated its refusal to take delivery of the goods and asked Wang to take the goods back.

51.The Lo Wu Public Security Bureau was by the side of the hotel where the Plaintiff stayed. Wang and his group of men together with the Plaintiff and PW2 went to the Lo Wu Public Security Bureau that evening. At the Lo Wu Public Security Bureau, the Plaintiff telephoned DW1 and the latter said that she would send one Mr. Chau Bing to bring them back to Hong Kong.

52.The Plaintiff said that before Chau Bing came, he wrote a 3 pages document to tell the Hong Kong Police about their detention in the hotel. Also, while at the hotel, the Plaintiff called the Tsimshatsui police station to alert them of the situation.

53.While at the Lo Wu Public Security Bureau, the officers there said that it was an economic dispute and advised them to resolve the matter through discussion. Wang and his group of men together with the Plaintiff and PW2 then went back to the hotel to wait for Chau Bing. 

54.That evening Chau Bing came and had a discussion with Wang which did not bear any fruit. Then Chau Bing left.

55.The men brought by Wang slept inside the Plaintiff's hotel room that night.

56.The next day on 22 July 2005, the Defendant sent one Mr. Lam Ping to the hotel who also had a discussion with Wang over the issue. Lam Ping in the end told the Plaintiff that the Defendant would not take delivery of the goods and the Plaintiff and PW2 had to fare for themselves.

57.That evening, the Plaintiff called the Hong Kong Police for the second time. The call was made through the Immigration Department.

58.Then the Nan Hu Public Security Outpost sent people to take the entire group of people to their office for enquiries. The Plaintiff was given to understand that the Hong Kong Police had referred the matter to the Nan Hu authorities. The Nan Hu officers took away the Home Visit Permits and identity cards of the Plaintiff and PW2. At about 11 pm, the person in charge of the Nan Hu authorities told the Plaintiff that it was an economic dispute and the matter would be referred to the Investigation Team of the Economic Unit of the Lo Wu Public Security Bureau for follow up.

59.As the office of the Investigation Team did not start work until 9 am the next day, the Plaintiff spent the night at the Nan Hu Public Security Outpost.

60.The next day the entire group of people were taken to the office of the Economic Unit of the Lo Wu Public Security Bureau but were informed that they were engaged in other work and would not be free to take up the matter until 9 am on 25 July 2005.

61.From 23 July 2005 onward the Plaintiff stayed at one Hing On Hotel. On 25 July 2005, the Plaintiff went to the Economic Unit of the Lo Wu Public Security Bureau to give a statement. The process was completed at about 4 pm. The officers of the Lo Wu Public Security Bureau Economic Unit said that they would have to obtain some information from the Hong Kong Police.

62.From 25 July to 26 July 2007, the Plaintiff stayed at the hotel.

63.On 27 July 2005, the Plaintiff and PW2 went to the Economic Unit of the Lo Wu Public Security Bureau. They asked if they would be charged with any offence. They were told that there was no criminal element in the matter. They asked when their travel and identity documents would be released to them. Eventually they got their documents back.

64.Then at that moment, 10 odd people surrounded them trying to take them to a van. The Plaintiff and PW2 called out for help and the Public Security officers came. They were all taken to the Dong Men Public Security Outpost where the matter was taken up by the Civil Case Mediation Centre. The Plaintiff again gave his statement there and had his finger prints taken. The person in charge at the Mediation Centre suggested that the Plaintiff and PW2 should raise the sums for the goods to secure their release.

65.That evening the Plaintiff and PW2 returned to the hotel.

66.On 30 July 2005, the wife of PW2 managed to raise the sum of $40,000.00 and the elder brother of the Plaintiff managed to raise the sum of US$5,000.00. The payments were made at the Mediation Centre. Then PW2 was allowed to return to Hong Kong.

67.On about 16 August 2005, the elder brother of the Plaintiff raised another $80,000.00 and the Plaintiff was allowed to return to Hong Kong.

68.The Plaintiff said that from 27 July to 16 August 2005 he could not return to Hong Kong as the Mediation Centre had detained his travelling documents.

69.According to the Plaintiff, the 3 pages letter at TB278-280 was the first written account of the matter he produced. He said that he could not remember whether he prepared the document while he was at the hotel or he was at the Lo Wu Public Security Bureau. The 3 pages letter was dated 22 July 2005, not 21 July 2005. On the face of it, it purported to be a letter by the Plaintiff and PW2 addressed to the Commissioner of Police in Hong Kong. The contents spoke of an event that took place on 20 July 2005 at about 5 pm, and that was that upon receiving the Defendant's fax of the cashier order, the Plaintiff and PW2 both signed a guarantee in favour of Wang. The contents of the guarantee provided that the two of them had on behalf of the Defendant guaranteed the delivery of the cashier order to Shenzhen the next morning. Both of them would take the cashier order to Wang and exchange it for the guarantee that they had signed the day before, on 20 July 2005. The guarantee was referred to in the document as annex 3.

70.The guarantee so described in the 3 pages letter does not tally with the guarantee presented before the Court. The guarantee presented before the Court at TB137 contains no stipulation for the delivery of the cashier order to Shenzhen in the morning of 21 July 2005 nor for the exchange of the cashier order for the guarantee. The Plaintiff confirmed that Wang had provided him with a copy of the guarantee that he had signed on 20 July 2005 when he had dinner with Wang that evening. He said, however, that he was not sure if he had the guarantee with him when he wrote the 3 pages letter to the Commissioner of Police of Hong Kong. He said that he placed the guarantee inside his bag in the hotel room. As he might have written the 3 pages letter while he was at the office of the Lo Wu Public Security Bureau, he might not have the guarantee before him when he wrote the 3 pages letter. The Plaintiff however remembered that he had written the 3 pages letter in a hurry, spending only about 30 minutes on it. He had it written in a hurry because he was told by the Public Security officers that he might have to be detained in a Detention Centre. 

71.The terms of the guarantee as described in the 3 pages letter are different from the guarantee before the Court. The Plaintiff said that there was only one guarantee, not two.

72.The 3 pages letter were addressed to the Commissioner of Police. The Plaintiff was asked what he had intended to do with the 3 pages letter and he said he intended to give it to Wang. Then he said that the Public Security officers after having read his 3 pages letter had it handed to Wang. When asked if he knew why the Public Security officers did that, the Plaintiff said that if he were detained by the Public Security authorities, then they would send the letter to the Hong Kong Police on his behalf. As he was not so detained, after writing up the 3 pages letter, he gave it to Wang.

73.The 3 pages letter said that the Plaintiff and PW2 had signed the guarantee upon receiving the fax copy of the cashier order. There was no mention of any telephone conversation with DW1 or her authorising the giving of the guarantee.

74.The Plaintiff said that when he eventually returned to Hong Kong, he had with him a copy of the guarantee but not the 3 pages letter. On 17 August 2005, the Plaintiff gave a statement to the Hong Kong Police (see TB149-153). The statement given to the Hong Kong Police made no mention of the Plaintiff's having read the contents of the guarantee to DW1 nor did it say that DW1 had told the Plaintiff to sign any specific guarantee.

75.Rather, the witness statement to the Police said that DW1 had asked the Plaintiff to sign whatever document was required. In Court, however, the Plaintiff said that apart from the specific instructions given by DW1 to sign the guarantee (the contents of which he had already read out to DW1 over the telephone prior to the signing), DW1 had not given the Plaintiff other instructions to sign anything in general.

76.The Plaintiff had prepared a witness statement for this trial at TB65-91. The witness statement said that DW1 had instructed the Plaintiff to sign all documents which Wang required him to sign to ensure the export of the goods to Hong Kong without delay. However, there was no mention of the Plaintiff having over the telephone read the contents of the guarantee to DW1 and obtained her specific instructions to sign that specific guarantee.

77.At the time when according to the Plaintiff he signed the guarantee, he had been working for the Defendant for less than a month. The Plaintiff's evidence is that he was well experienced in China trade.

PW2

78.The evidence of PW2 is short. He was the Defendant's former employee who went to Shenzhen together with the Plaintiff. He adopted the contents of his witness statement as his examination in chief. His witness statement confirmed the Plaintiff's story. Among other things, PW2 said that the Plaintiff had told him that DW1 had given the Plaintiff instructions to sign the guarantee in order to procure Wang to send the 1st truck to cross the border to deliver the goods to Hong Kong. Under cross examination, he said that on 21 July 2005, the matter had not yet been referred to the Public Security Bureau. He said that it was when he and the Plaintiff were having dinner on 22 July 2005 that the Public Security Bureau came to them.

DW1

79.There was no objection to DW1's adoption of her witness statement as her evidence in chief and I had granted such leave.

80.She was the Director of the Defendant company which had been carrying on the business of garment trading for about 15 years since its incorporation. Her husband Peter Wong is also well experienced in the garment trade. Peter Wong also managed the business of the Defendant. The Defendant's business was to secure goods from suppliers in China to meet orders placed by its own overseas buyers.

81.The Plaintiff had claimed that he had extensive experience in China trade and had been working as a merchandising manager for a mainland company. DW1 heard of this from her husband Peter Wong.

82.In early 2005, DW1 came to know Wang and Wan. Wang nominated Rongjian to trade with the Defendant. The Defendant did place the two Purchase Orders No. PO26/05 and PO28/05 with Rongjian. Rongjian delayed in making delivery of the goods to the Defendant and the Defendant had demanded for compensation (on account of the necessity to air freight the goods to its overseas buyer) in late June 2005.

83.The Plaintiff suggested to Peter Wong that he might be able to resolve the dispute with Wang.

84.On 11 July 2005, the Defendant did send the Plaintiff to China to discuss with Wang to procure the delivery of the goods under the two deals. It was emphasised to the Plaintiff that the Defendant's foremost concern was to obtain the supply of the man's jackets. The Plaintiff did go to China on 11 July 2005 and came back to Hong Kong on 12 July 2005. The goods under the two deals were not delivered to Hong Kong.

85.Between 13 & 14 July 2005, the Defendant and Wang struck a compromise for Wang to provide the Defendant with compensation in the sum of RMB150,000.00. The terms were as described in the Plaintiff's evidence.

86.On 15 July 2005 the Plaintiff went to China in connection with the two deals and returned to Hong Kong on 16 July 2005. The goods under the two deals were still not delivered to Hong Kong.

87.Under cross examination, DW1 said that the Defendant had prior to the procurement of the cashier order dated 20 July 2005 for US$41,875.40 (see TB136), the Defendant had also previously procured cashier orders in respect of the price of the goods under the two deals. Two such cashier orders dated 15 July 2005 are included in the trial documents (see TB126). DW1 explained that these were prepared to show to the supplier that the Defendant did have the means to make payment.

88.On 18 July 2005, the Plaintiff went to China for the same purpose. DW1 handed cash of $1,000.00 and RMB18,000.00 to the Plaintiff on account of his travelling expenses. She was asked to explain but she did not at first explain how the amount was arrived at. She said that for making trips to Shenzhen or Kwangtung, the Defendant usually would not give a large amount of money as travelling expenses to its staff. Later on, she said that a bigger sum of money was given to the Plaintiff as there might be a need to pay the storage charges for the goods. She then went on to say that it was not the Defendant's responsibility to pay the storages charges for the goods. The Plaintiff had not given any receipt for the alleged payment. DW1 said that the Defendant was a small sized company and operated in a less formal manner. The payment was not even recorded in the books of the Defendant. DW1 paid it out of her own pocket. When asked why the Defendant did not pay the Plaintiff and entered the item in its accounting record, DW1 said that it was the usual practice and the Defendant did not have an account for RMB. Peter Wong in the previous proceedings before the Labour Tribunal had however said that the amount paid to the Plaintiff was RMB15,000.00 instead of RMB18,000.00.

89.It is DW1's evidence that on 20 July 2005, the Defendant was eager to obtain delivery of the man's jackets for delivery to its own overseas buyer. In her cross examination, DW1 said that when the cashier order for US$41,875.40 was procured on 20 July 2005, she did not pay much attention as to whether the payment was meant for the man's jackets or the kid's jeans. She at first said that the payment might be for both types of goods. She denied that when the cashier order was prepared, she was aware that it was meant to be the payment for kid's jeans only. She however agreed that the Defendant had received the fax copy of the packing list (see TB134-135) when the cashier order (TB136) was procured. The packing list clearly shows the goods to be transported to Hong Kong were kid's jeans, not man's jackets.

90.In her cross examination, DW1 said that at the time of the preparation of the cashier order, she did not pay attention to all the details in the packing list (TB134-135). She only noted the amount and the nominated payee stated therein. She said that it was after the procurement of the cashier order that she found out the payment was related to the kid's jeans. She then called the Plaintiff and questioned why the goods did not include the man's jackets. The Plaintiff told her that the 1st truck was already fully loaded with the kid's jeans. She did not give the Plaintiff further instructions then.

91.In her cross examination, DW1 said that after procuring the cashier order, she gave it to one Miss Pao, the secretary of Peter Wong. She did not remember if she had told Miss Pao to fax the cashier order to China. She said that she did not know if the cashier order was faxed to the Plaintiff or to Wang. She said that she was aware that it was faxed out on 20 July 2005. She was told by Peter Wong that it was required in China. She did not know exactly why it was so required. According to DW1, the agreement was that the Defendant would give the cashier order to Wang or Wan upon the arrival of the goods in Hong Kong, in exchange for the documents for collection of the goods from the warehouse.

92.In her cross examination, DW1 said that Wan did come to the Defendant's office on 20 July 2005 with a view to collect the cashier order which was then held by her. According to DW1, she then told Wan that the Defendant was not yet ready to give it to him yet. Then Wan left without further ado. Wan did not ask her for any reason. DW1 told the Court that as the goods had not yet been transported to the Hong Kong warehouse and the Defendant did not yet have the opportunity to check the goods in Hong Kong, she considered that it was not yet the right time to give the cashier order to Wan.

93.DW1 said that it should be in the afternoon of 21 July 2005 that the Defendant examined the goods delivered to Hong Kong. The staff of the Defendant examined the goods and found that there was a short shipment of the goods under Purchase Order no. PO26/05. Under the contract, the Defendant expected to obtain kid's jeans of 3 different sizes and various styles. There was no shipment of kid's jeans of the smallest size and there was a short shipment of the other two sizes. The fax dated 21 July 2005 (TB141) from the Defendant to Wang however said that the Defendant had found out that there was a problem with the quality of the goods. There was no mention of any short shipment. Further, in earlier legal proceedings between the Defendant and the Plaintiff in the Labour Tribunal, Peter Wong had told the Labour Tribunal that on 21 July 2005 at about 8-9 am, he received an email from the overseas buyer of the Defendant that it no longer wanted the goods. DW1 however said that she did not remember having seen any such email, and the Defendant did not usually start work until it was 10-10:30 am.

94.It was suggested to DW1 that the Defendant could not have enough time to check the quantity of the goods delivered to Hong Kong before the Defendant sent the fax to Wang on 21 July 2005 informing Wang of the Defendant's decision to reject the goods. DW1 said that the staff of the Defendant did not count the goods piece by piece but had noted the particulars of the goods from what was written on the carton boxes containing the goods.

95.The Defendant had in the end never given Wang the cashier order that was intended to be payment for the goods delivered to Hong Kong. Wang never retrieved the goods despite the Defendant's request that he should take the goods back. The Hong Kong warehouse informed the Defendant that the Defendant would have to be responsible for payment of warehouse charges for the goods. The Defendant eventually arranged for the goods to be sold locally.

96.On 21 July 2005, the Defendant instructed the Plaintiff to return to Hong Kong but was told that his travel documents had been seized by the China authorities. The Defendant did not then know if the Plaintiff was truly detained by the Chinese authorities. The Defendant sent one Chau Bing to China to investigate into the situation who after meeting the Plaintiff there told the Defendant that the Plaintiff's travel documents had not been seized.

97.On 22 July 2005, the Defendant summarily dismissed the Plaintiff. The 2nd truck that was supposed to deliver the man's jackets to Hong Kong  never came. The Defendant dismissed the Plaintiff as the Plaintiff had failed to procure such delivery.

98.The Defendant learnt from the Hong Kong Police that the Plaintiff was unlawfully detained in China. The Defendant instructed its solicitors to write to the Secretary for Security to seek assistance.

99.The Defendant had never given any instruction or authority to the Plaintiff to sign any guarantee.

Discussion and Finding

100.As noted earlier, I do not consider that I have the jurisdiction to entertain the Plaintiff's claim for the sum of US$5,000.00.

101.However, even if I were to accept that the Plaintiff's claims for the sums of US$5,000.00 and RMB80,000.00 are both within my jurisdiction, I would nonetheless find against the Plaintiff.

102.I am not persuaded that the Defendant had instructed the Plaintiff to sign the guarantee at TB137 or any guarantee in general. I am not persuaded that the Plaintiff had signed the guarantee at TB137 to procure the release of the goods to Hong Kong.

103.I consider that there is a very real possibility that the whole course of events which the Plaintiff claimed to have happened to him from 21 July 2005 to 16 August 2005 was something orchestrated by the Plaintiff and Wang in concert. In other words, I am not persuaded that it is probable that the Plaintiff's experience of loss of personal liberty in Shenzhen during that period, assuming that he did go through all that as he had so described in his evidence, was under any real compulsion. Also, I am not persuaded that the alleged payments of US$5,000.00 and RMB80,000.00 to secure the Plaintiff's personal liberty were in fact made. If they were in fact made, I am not persuaded that they were made to secure the Plaintiff's personal liberty.

104.In this case, there is no acute dispute as to what happened prior to the alleged signing of the guarantee. The Defendant did challenge the bona-fides of the representations that the Plaintiff had made to the Defendant in his job application. There is good reason to doubt whether the Plaintiff had been fully frank and honest in that connection, but this is only a peripheral matter and I do not attach much significance to it in trying to determine the truthfulness or otherwise of the core issues.

105.I find that prior to the alleged signing of the guarantee, the facts boiled down to little more than this: the Plaintiff applied for a job and the Defendant employed him as a merchandiser. The Defendant had placed two purchase orders with Rongjian as abovementioned. There was a delay in delivery of the goods and the Defendant had disputes with Wang over the two deals. Both parties were still trying to resolve their differences and to close the two deals. The parties came to a compromise in principle as abovementioned. The Defendant had prepared two cashier orders on 15 July 2005 with a view to close the two deals but that was to no avail. The Defendant had sent the Plaintiff to follow up on the two deals in Shenzhen. While the Plaintiff was in Shenzhen he did receive the fax showing the two cashier orders. The goods were not exported to Hong Kong on that occasion. The Plaintiff was later sent to Shenzhen again to procure the completion of the two deals. He was to see to the export of the goods under the two deals to Hong Kong on 20 July 2005. He was there with PW2 and they met Wang, and there were telephone contacts between him and DW1. The Defendant did procure a cashier order in the sum of US41,875.40 and fax it to the Plaintiff. Wan had on behalf of Wang went to the Defendant's office on 20 July 2005 with a view to collect the cashier order but the attempt was unsuccessful.

106.As to what actually happened thereafter in relation to the alleged signing of the guarantee and its aftermath (i.e. what happened to the Plaintiff thereafter), it is an enigma shrouded in suspicious circumstances. Except for matters that the parties were on common grounds or not in dispute, I am not prepared to find the disputed facts on the Plaintiff's case. I accept that the goods in the 1st truck were delivered from Shenzhen to Hong Kong on 21 July 2005. The Defendant refused to take delivery but Wang refused to transport the goods back to Shenzhen. The Defendant eventually sold the goods and it has not paid for the goods.

107.As noted earlier, paragraph 3 of the Statement of Claim has pleaded a number of matters capable of different permutations. It is lacking in clarity and precision. In view of my finding of fact against the Plaintiff, I do not propose to address in detail as to whether as a matter of law all the Plaintiff's contentions are valid. It suffices to say that I find no such implied term in the contract of employment. I agree that a principal does have a duty to indemnify its agent against losses incurred in the carrying out of the principal's instructions. I would leave it at there and simply note that none of the contentions raised in paragraph 3 of the Statement of Claim has established the Plaintiff's claims, on facts.

108.I would make one passing comment. I take judicial notice that there were occasional reports in the news that some representatives of certain Hong Kong companies were detained in China in connection with alleged outstanding liabilities owed by those Hong Kong companies towards their trading partners in China. However, I am not prepared to find that a Hong Kong employer/principal who has ordered for goods from a Chinese supplier in sending its employee/agent to China in that connection invariably owes the latter a general contractual or tortious duty to exercise reasonable care to ensure that the employee/agent would not be subject to unreasonable detention by that Chinese supplier or other connected parties when a trade dispute does arise between the Hong Kong employer/principal and the Chinese supplier.

109.I am not prepared to find any trickery on the part of the Defendant designed to expose the Plaintiff to financial losses or the risk of losing his personal liberty, in order to procure the shipment of the goods to Hong Kong. I am not prepared to find that the Plaintiff's loss of personal liberty (assuming that it did happen to him), was reasonably foreseeable.

110.I consider that it has not been proved that the Defendant had been in breach of any duty owed to the Plaintiff whether in tort or in contract or under the law of agency which had caused the Plaintiff to suffer the alleged losses.

111.As to the Plaintiff's claim for general damages, by the same reasoning, I consider that the contentions that the Plaintiff has relied on in paragraph 4 of the Statement of Claim are not established. There was no such implied term in contract nor did such a duty in tort ever arose. In any event, on facts it has not been established that the Plaintiff had under any real compulsion lost his personal liberty. It follows that the matters pleaded in paragraphs 18 and 19 of the Statement of Claim are also not established. For the sake of completeness I would set out paragraphs 18 and 19 of the Statement of Claim herein: "18. Wrongfully and in breach of its duty at common law and/or the implied term of the said Employment as pleaded in paragraph 4 above, the Defendant deliberately did not take necessary steps and use its best endeavours in restoring freedom of movement of the Plaintiff." and "19. In the premises, the Plaintiff was wrongfully detained and deprived of his liberty from 21st July 2005 to 16 August 2005 and has suffered mental distress and anxiety as a result of his fear for his personal safety."

112.I would now turn to the Defendant's counterclaim. I am not persuaded that the Defendant had in fact provided the Plaintiff with the sums of $1,000.00 and RMB18,000.00 as alleged or at all. On the evidence before me, if the sums were indeed provided they were not provided by the Defendant but by DW1 personally. The Defendant's counterclaim must also fail.

Order

113.The Plaintiff's claims and the Defendant's counterclaims are all dismissed.

114.On the question of costs, I note that the Defendant had challenged the Plaintiff's claims on jurisdictional grounds and I have found against the Defendant on that. I note that the Plaintiff is under legal aid. I would order the Plaintiff's own costs be taxed in accordance with the Legal Aid Regulations. I would make the following Orders Nisi for costs.

115.The Plaintiff do pay 4/5 of the Defendant's costs in defending the Plaintiff's claims, such costs to be taxed if not agreed.

116.The Defendant do pay the Plaintiff's costs in defending the Defendant's counterclaims, such costs to be taxed if not agreed.

117.There be Certificate for Counsel for the Defendant.

118.Unless there is an application to vary the above Orders Nisi, they will become absolute in 14 days.

Representation:

Mr. Ng Man Kin, of Messrs. Kwok, Ng & Chan (assigned by D.L.A.), for the Plaintiff

Mr. Danny P.Y. Fung, instructed by Messrs. Martin Law & Co., for the Defendant