Koon Kwai Hung and Others v. Union Contractors Ltd and Another

HCLA27/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO. 27 OF 2006

(ON APPEAL FROM LBTC NO. 1232 OF 2006)

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BETWEEN

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Before : Mr Recorder Kwok SC in Court

Date of Hearing : 2 August 2007

Date of Judgment : 2 August 2007

Date of Reasons for Judgment : 27 August 2007

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REASONS  FOR  JUDGMENT

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The Labour Tribunal claim and award

1.On 7 March 2006, the 1^st to 5^th claimants filed Claim No. LBTC1232/2006 in the Labour Tribunal against the 1^st and 2^nd defendants.

2.By a Notice of Place and Day Fixed for Hearing dated 7 March 2006, the Registrar of the Labour Tribunal gave notice to the parties that the claim would be heard on 3 April 2006.

3.The 2^nd defendant did not attend the hearing on 3 April 2006 and the Presiding Officer, Mr Eric Tam, made an award to the claimants against the 2^nd defendant in its absence.

The section 21A Application

4.An application (“the section 21A Application”) dated 25 April 2006 was made on Form 19 by one Elgin Limited, purportedly on behalf of the 2^nd defendant, Developing Engineering Limited.  It read as follows (written exactly as it stands in the original) :

“	I, Developing Engineering Limited, a defendant to this claim, which was heard and determined by the tribunal in my absence and an order made on the 3 day of April 2006 hereby, pursuant to section 21A of the Labour Tribunal Ordinance, make application to set aside the order.
	The reason for my non-appearance at the hearing is no service of claim has ever been effected to the registered office of D2.”

5.The section 21A Application was fixed to be heard on 1 June 2006.

6.On 1 June 2006, Ms Chan Kam Lin Jan (“Ms Chan”) from Messrs David W.T. Chan & Co., a firm of solicitors, turned up at the hearing before the same Presiding Officer and applied to represent the 2^nd defendant.  The Presiding Officer refused her application, dismissed the section 21A Application and ordered the 2^nd defendant to pay each of the claimants the sum of $350 as costs.

Leave to appeal

7.By an application dated 6 June 2006, Messrs David W.T. Chan & Co. applied on behalf of the 2^nd defendant to the High Court for leave to appeal on point of law against the order made by the Presiding Officer on 1 June 2006.  The application read as follows (written exactly as it stands in the original) :

“	I, (a) Development Engineering Limited, a party to this claim, pursuant to section 32 of the Labour Tribunal Ordinance, do hereby apply for leave to appeal against the order by Mr. Eric Tam, Presiding Officer, made in respect of this claim on the 1st day of June 2006.
	The grounds on which I desire to appeal are that the order is erroneous in point of law in that ― (b)
	The authorized representative of the Defendant was present in the hearing, but was denied of having such capacity to represent the Defendant.
	Although Defence was submitted to the Labour Tribunal both before and during the hearing, that was not taken into consideration by the Presiding Officer in making the order.
	*the *award/order/determination is outside the jurisdiction of the Board in that (c).”

8.By applying for leave to appeal on behalf of the 2^nd defendant and by continuing to have conduct of this appeal on its behalf, Messrs David W. T. Chan & Co. warranted and warrant that they had and have authority to represent the 2^nd defendant.

9.The application for leave to appeal came before Poon J on 16 March 2007.  The learned judge declined to grant leave on the authorised representative point and granted leave to appeal only on the consideration of the “Defence” point.

Dismissal of appeal

10.I heard the appeal on 2 August 2007.  Despite the tremendous efforts put in by Mr William Liu, counsel for the 2^nd defendant, I dismissed the appeal without calling on the claimants or Mr Paul Leung, counsel for the 3^rd claimant.  I also ordered :

(a)	the 2nd defendant to pay the 3rd claimant’s costs of the appeal, to be taxed if not agreed, and to pay the 1st, 2nd, 4th and 5th claimants’ costs of appeal assessed at $350 each; and
(b)	the 3rd claimant’s costs to be taxed in accordance with Legal Aid Regulations.

Reasons for judgment

11.I told the parties that I would give my reasons in writing.  This I now do.

12.The only ground upon which the learned judge granted leave to appeal was that :

“	Although Defence was submitted to the Labour Tribunal both before and during the hearing, that was not taken into consideration by the Presiding Officer in making the order.”

13.Mr Liu pointed out that there was no document entitled the “Defence”.  What the draftsman of the section 21A Application meant was said to be the bundle of documents at pages 28 to 43 of the hearing bundle.

14.According to the transcript, Ms Chan told the Presiding Officer on 1 June 2006 that :

(a)	some director of the 2nd defendant had disappeared (p. 2 of the transcript at letter C);
(b)	the main people in the 2nd defendant could not be located (p. 2 of the transcript at letter C);
(c)	she could not locate the current director of the 2nd defendant or there would have been no need for her to attend the Labour Tribunal (p. 4 of the transcript at letter I); and
(d)	she was instructed by the solicitors’ firm to attend (p. 4 of the transcript at letter J).

15.I asked Mr Liu to satisfy me that page 28 and its attachments were prepared with the 2^nd defendant’s authority and was the 2^nd defendant’s “Defence”.  Tried as he did, Mr Liu was unable to do that.

16.The learned Judge held that Ms Chan’s authority to represent the 2^nd defendant was an unarguably bad point.  It follows that she did not have the 2^nd defendant’s authority to put forward its defence. 

17.There was nothing to show when or how the “Defence” and its attachments were submitted to the Tribunal before 1 June 2006, if such was the case.  Nor was there anything on the authority point.

18.Moreover, it is apparent on the face of page 28 itself that it was prepared without the authority of the corporate director of the 2^nd defendant.  It expressly stated that because the corporate director of the 2^nd defendant was “inquorate”, the case was temporarily handled by legal representatives.  Page 28 did not even purport to be the 2^nd defendant’s document.

19.Even if pages 28 to 43 were prepared with the authority of the corporate director of the 2^nd defendant, Mr Liu had not drawn my attention to any legal authority on the authority of such a single director, in contrast with the board of directors as a whole, to act on behalf of the 2^nd defendant.

20.There was no assertion in the ground of appeal that the “Defence” was the defence of the 2^nd defendant.

21.Even if such an assertion was implicit, the 2^nd defendant had failed to make good the factual basis, i.e. that it was the 2^nd defendant’s defence.  Without the factual premise, the legal argument did not get off the ground.

Duty to investigate under section 20(3)

22.Mr Liu contended that even if the “Defence” was not the 2^nd defendant’s defence, the Presiding Officer should still have considered it.  Mr Liu relied on section 20 of the Labour Tribunal Ordinance, Cap. 25, which provides that :

“	(1)	The hearing of a claim shall be conducted in an informal manner.
	(2)	The presiding officer may subpoena witnesses, order the production of any document, record, book of account or other exhibit and put to a party or witness such questions as he may think fit.
	(3)	The presiding officer shall investigate any matter which he may consider relevant to the claim, whether or not it has been raised by a party.”

23.On 1 June 2006, the Presiding Officer was not hearing the claimants’ “claim”.  He was hearing the section 21A Application, an interlocutory application dated 25 April 2006 purportedly made on behalf of the 2^nd defendant under section 21A which provides that :

“	(1)	Any award or order made by the tribunal under section 21 in the absence of a defendant at a hearing may be set aside by the tribunal, on the application of the defendant, on such terms as it thinks just.
	(2)	An application under subsection (1) shall be made within 7 days after the hearing or such further period as the tribunal may allow.”

24.Section 2 provides that “unless the context otherwise requires … ‘claim’ (申索) includes a proceeding before the tribunal between a claimant and a defendant”.  Assuming that section 20(3) applies to the hearing of an application under section 21A, it enjoins the Presiding Officer to investigate any matter which he may consider relevant to a section 21A application.

25.It was plain and obvious to me that the only point made in the section 21A Application was bad.  In contrast with service of a High Court writ on a corporate defendant, there is no requirement of service of a Labour Tribunal claim on a corporate defendant’s registered office.  Section 13(2)(b)(iia) provides that service of a copy of the claim and of a notice of hearing “shall” be effected by sending them by post addressed to the defendant at his “place of business”.  Section 20(3) apart, the section 21A Application fell to be dismissed.

26.There must be a sense of proportion in considering the extent of the Presiding Officer’s duty to investigate.  This is plain from the qualification of the Presiding Officer’s duty to investigate by the phrase “any matter which he may consider relevant”.

27.The Presiding Officer was dealing with an interlocutory application, not the trial of the claims. 

28.It seemed to me to be out of proportion to require a presiding officer dealing with a section 21A application to go through every conceivable point which might be relevant to the interlocutory application, both in favour of the claimants and in favour of the defendants.  It seemed to me to be going way too far to require a presiding officer dealing with such an interlocutory application to go through every conceivable point on the merits of every claim, both in favour of the claimants and in favour of the defendant on every conceivable defence.

29.In the absence of any authority, I was not persuaded to hold that the Presiding Officer’s duty to investigate when hearing the section 21A Application included investigating the merits of the claimant’s claim, or investigating the points made on a piece of paper or pieces of paper by somebody not shown to have authority to represent the 2^nd defendant.

30.I find some support in Form 19 for my conclusion.

31.The Chief Justice is empowered by section 45 to make rules.  Rule 2 of the Labour Tribunal (Forms) Rules provides that the forms contained in the schedule may be used in the tribunal with such variations as the circumstances may require.  Form 19 is the prescribed form for a section 21A application.  The prescribed form suggests that the primary issue is the reason for the defendant’s non-appearance at the hearing.  Plainly, the only reason put forward for the defendant’s non-appearance did not support an order to set aside the award made on 3 April 2006. 

32.The 2^nd defendant had not taken the trouble of appointing a proper representative to attend the hearing of an application purportedly made on its behalf.  In these circumstances, in the absence of compelling authority, and there is none drawn to my attention, I held that the Presiding Officer did not err in law in not taking the “Defence” into consideration.

33.The appeal failed and was dismissed with costs.

The 1^st, 2^nd, 4^th and 5^th Claimants, in person, present

Mr Leung Hei Ming Paul, instructed by Messrs Cheng Wong Lam & Partners, assigned by Director of Legal Aid, for the 3^rd Claimant

Mr William Liu, instructed by Messrs David W.T. Chan & Co., for the 2^nd Defendant