Tadjudin Sunny v. Bank of America, National Association

CACV173/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 173 OF 2009

(ON APPEAL FROM HCA NO. 322 OF 2008)

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Before: Hon Yuen JA, Stone and Suffiad JJ in Court

Date of hearing: 19 October 2010

Date of judgment: 19 October 2010

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J U D G M E N T

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Hon Yuen JA (giving the Judgment of the Court):

1.This is the judgment of the court.  In HCA322/2008, the Plaintiff is claiming a performance bonus from the Defendant (her former employer) in the sum of not less than $10,913,760, which sum has been derived by applying a percentage estimated by reference to previous years’ bonuses to the profit she claims her portfolio had generated before the Defendant dismissed her by paying her wages in lieu of notice. 

2.The Defendant applied to strike out parts of the Plaintiff’s claim and to dismiss the action.  It argued that the following claims were unarguable - that there were implied into the plaintiff’s employment contract the Defendant’s duties:

“ (1) not to exercise its right to terminate the Plaintiff’s employment by giving one month’s notice in writing or by paying one month’s salary in lieu of notice in order to avoid the Plaintiff’s being eligible for the Defendant’s performance incentive program;

(2) not to implement its performance evaluations in respect of the Plaintiff in an irrational, perverse or arbitrary manner or in a manner that was not bona fide;

(3) not to administer its performance incentive program in respect of the Plaintiff in an irrational, perverse or arbitrary manner or in a manner that was not bona fide”.

3.On 13 July 2009 Hon Chu J struck out those parts of the Plaintiff’s claim and dismissed the action.  The judge did not consider it necessary to determine the Order 14A questions set out in para.3 of her judgment.

4.The Plaintiff appealed.  On 2 June 2010 this court allowed the appeal. 

5.The Defendant has applied for leave to appeal to the Court of Final Appeal under s.22 (1) (b) of the Hong Kong Court of Final Appeal Ordinance Cap. 484 which provides:

“An appeal shall lie to the Court

...

(b) at the discretion of the Court of Appeal or the Court, from any other judgment of the Court of Appeal in any civil cause or matter, whether final or interlocutory, if, in the opinion of the Court of Appeal or the Court, as the case may be, the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court for decision”.

6.The Defendant suggests that the following four questions of law of great general or public importance are involved in the appeal:

“(1) Whether Hong Kong law may imply into a contract of employment a term prohibiting an employer from exercising the employer’s express and statutory right to terminate the employee’s employment by giving notice or by paying wages in lieu of notice if either (a) its sole motive or (b) one of its motives in dismissing the employee is to avoid the employee being eligible for consideration for receipt of a bonus under the employer’s performance incentive programme, particularly in the light of the legislative provisions in Part VIA and Part IIA of the Employment Ordinance.

(2) Whether Hong Kong law may imply into a contract of employment a term which would effectively disentitle an employer from preventing an employee from fulfilling an express pre-condition for consideration for a year-end bonus in circumstances in which the employer has an express and statutory right to terminate the employee’s employment at any time by the giving of a specified period of notice or by payment in lieu of notice.

(3) Whether Hong Kong law may imply into a contract of employment a term prohibiting an employer from implementing any performance evaluation in respect of an employee for the purposes of determining entitlement to any bonus under the employer’s performance incentive programme in an irrational, perverse or arbitrary manner or in a manner this is not bona fide in circumstances in which (a) the contract provides expressly that the employee will only be eligible for consideration for any such bonus if he is still employed by the employer at the time of payment of any bonus under the programme and (b) the employer has exercised his express and statutory right to terminate the employee’s employment prior to the time of payment of any bonus under the programme.

(4)     Whether Hong Kong law may imply into a contract of employment a term prohibiting an employer from administering any performance incentive programme in respect of an employee in an irrational, perverse or arbitrary manner or in a manner this (sic.) is not bona fide in circumstances in which (a) the contract provides expressly that the employee will only be eligible for consideration for any such bonus if he is still employed by the employer at the time of payment of any bonus under the programme and (b) the employer has exercised his express and statutory right to terminate the employee’s employment prior to the time of payment of any bonus under the programme.”

7.Although Miss Cruden, counsel for the Plaintiff has been instructed not to argue against the Plaintiff’s application, this court of course has to exercise its own discretion before deciding whether or not to grant leave. 

8.In our view, it would not be appropriate for us to grant leave in this case.  The way the Defendant ran its case before this court at the appeal, the focus was on the nature of the bonus, i.e. whether it was discretionary or guaranteed.  As such, as Stone J’s judgment indicates, this is a case of “fact sensitivity” (para. 8) and as Suffiad J noted, this is a case where there are disputed factual matters as to the discretionary nature of the bonus, such that the true construction of clause 1 can only be properly ascertained by going into the Defendant’s compensation structure and performance evaluation system (para. 60).  In other words “whether or not the implied terms contended for by the Plaintiff will or will not be implied greatly depend on the factual matrix ... relating to the proper construction of the relevant clauses in the Employment Agreement, and whether on the facts found at trial, the Plaintiff can make out a case that the termination was carried out with a view by the Defendant to avoid the performance bonus ...” (para. 64). (Emphasis added).         

9.In light of that, we do not see the point in constructing or resurrecting preliminary points of law in the form of the questions set out in the Notice of Motion and we would refuse leave.  The Defendant is of course free to apply to the Court of Final Appeal for leave. 

10.Costs have been agreed to be paid by the Defendant to the Plaintiff, to be taxed if not agreed.  

Mr Adrian Huggins, SC and Mr Mike Lui, instructed by Mayer Brown JSM, for the Defendant (Applicant)

Miss Liza Jane Cruden, instructed by William K.W. Leung & Co., for the Plaintiff (Respondent)

Defendant's leave to appeal to Court of Final Appeal is refused. Please refer to FAMV42/2010 dated 20 January 2011