Universal Property Agency (HK) Ltd v. Chik Chi Lun and Another

DCCJ 99/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 99 OF 2006

--------------------

BETWEEN

--------------------

Coram :  H.H. Judge Chow

Date of Hearing :  7^th July 2008

Date of Handing Down Decision :  3^rd September 2008

__________________

Decision

__________________

1.This is the application by the 1^st Defendant to strike out the Plaintiff’s claim in this action, pursuant to Order 18, rule 19 of the Rules of the District Court Ordinance.

2.In this action, the Plaintiff pleaded that it was an estate agency company, and that the two Defendants were its former employees.  Under Clause 5.1 (d) of the standard employment contracts entered into with the Defendants (“the Employment Contract”), the Defendants were obliged to observe and to follow orders, instructions and circular.  The “orders, instructions or circulars” in this action include an internal memorandum under reference 45/05 (“the 45/05 Memorandum”).

3.Clause 11 of the Employment Contract provides that the Defendants shall fully indemnify the employer for all damages, costs and expenses arising from any breach of the terms and conditions by the employee in relation to the execution of the Employment Contract.

4.A Madam Lui Fung King (“Madam Lui”) agreed to purchase a property known as Flat D, 19^th Floor, Padek Palace, No. 377 Prince Edward Road West, Kowloon from Pak Hop Shing Company Limited.  Acting on behalf of the Plaintiff, the Defendants entered into an agreement with Madam Lui, agreeing to pay her rebate of commission in the sum of $126,900.  The amount of commission to be received from the vendor was only $161,775.  Thus the amount of rebate exceeded of 50% of the commission receivable.  According to the 45/05 Memorandum, approval should have been obtained from the Plaintiff’s executive director.  But no such approval was obtained.

5.In October, 2005 Madam Lui commenced an action (DCCJ5342 of 2005) in the District Court, against the Plaintiff for the sum of $126,900, together with costs and interest.  The Plaintiff agreed to settle her claim by agreeing to pay her the sum of $126,900 and costs to be taxed, if not agreed.  In handling her claim the Plaintiff incurred the sum of $60,000.  In the present action the Plaintiff claims against the Defendants jointly and severally for:-

(1) the sum of $126,900;

(2) the sum of $60,000; and

(3) the costs for the action DCCJ 5342 of 2005 to be taxed.

6.The issue this Court has to determine is whether this case is within the exclusive jurisdiction of the Labour Tribunal, and therefore outside the jurisdiction of the District Court.  Section 7 of the Labour Tribunal Ordinance reads:-

“(1) The tribunal shall have jurisdiction to inquire into, hear and determine the claims specified in the schedule.

(2) Save as is provided in this Ordinance, no claim within the jurisdiction of the tribunal shall be actionable in any court in Hong Kong.”

The schedule reads:-

“1. A claim for a sum of money which arises from:-

(a) the breach of a term, whether express or implied, of a contract of employment ……”

7.In opposing the application, the Plaintiff’s Counsel cited the judgment of Deputy District Judge Yu in Lucullus Food & Wines Company Limited v. Ng Pui-Yee (DCCJ 4767/2001), in which the learnt judge stated:-

‘…… “a sum of money” should be interpreted as damages unliquidated in law but quantified in practice.  This must be referring to the benefit conferred upon the employees by the Employment Ordinance or the contract as protected by the Employment Ordinance.…’

The Plaintiff’s Counsel submitted that ‘per Deputy District Judge Yu, “a sum of money” must be referring to the benefit conferred upon the employees by the Employment Ordinance or the contract as protected by the Employment Ordinance.’  ‘The nature of P’s case was clearly not referring to the benefit conferred upon the employees by the Employment Ordinance or the contract as protected by the Employment Ordinance.  Therefore, it is submitted that the District Court must have jurisdiction over the action herein.’

8.The Employment Ordinance does not only deal with benefits conferred upon the employees; it also deals with the obligations of employers and employees under employment contracts.  The employees’ benefit referred to by Deputy District Judge Yu is only one aspect of the matters covered by the Employment Ordinance and that cannot be used as a test by this Court to decide whether the present case is within the jurisdiction of the District Court or not.

9.Under paragraph 1 (a) of the Schedule of the Labour Tribunal Ordinance, two matters must be satisfied in order for a case to be covered by the schedule, namely, (1) there must be a claim for a sum of money and (2) the claim must arise from the breach of a term of contract of employment.  There is no qualification to the term “a claim for a sum of money”.  There is no requirement that the “sum of money” claimed must be liquidated or unliquidated, quantified or otherwise, or in what form the claim must appear.  So long as the claim is a claim for ‘a sum of money”, it will suffice.  In this action the Plaintiff’s claims for the sum of $126,900 and the sum of $60,000 are clearly claims for a sum of money respectively.  Regarding the claim for the costs for the action DCCJ 5342 of 2005 (to be taxed), the amount of money claimed has not been quantified; yet this does not change its nature that it is a claim for a sum of money.  In the case of Panalpina (HK) Ltd. v. Ulrich Haldemann [1983] HKLR 275 case, Hunter J said:-

‘In my judgment the phrase “sum of money” must be construed in the light of the fact that practically every claim for “breach of a term …… of a contract” will be for damages unliquidated in law but quantified in practice.  It follows, I think that the phrase must cover such claims.  I agree with Roberts, CJ that the legislature anticipated a “quantified” claim and a claim that was “ascertained” or ascertainable.’

Applying this test to the present action, the claim for cost is ascertainable by way of taxation. 

10.All the Plaintiff’s claims rise from the breach of the Employment Contract by the Defendants.  Each claim is a claim for a sum of money.  These claims are therefore within the exclusive jurisdiction of the Labour Tribunal, and outside the jurisdiction of the District Court.  Accordingly I dismiss the Plaintiff’s claim against the 1^st Defendant for want of jurisdiction in the District Court.

Costs

11.I make an order nisi, to be made absolute within 14 days, that the Plaintiff is to pay costs of this action to the 1^st Defendant, to be taxed, if not agreed (with no certificate for Counsel).

The Plaintiff: represented by Mr. Ivan Cheung, instructed by M/S. Francis Kong & Co., Solicitors.

The 1^st Defendant: represented by Mr. Lee Tung Ming, instructed by M/S. Tso Au Yim & Yeung, Solicitors.