Employment Law — District Court dismisses appeal against refusal to transfer Labour Tribunal case to District Court
During the appeal, the Appellants made a concession as to set-off. The Court held that the concession renders their only remaining Ground of Appeal invalid.
Kouk Chung Fai and Another v. Ebp Global Ltd
|Reference:|| HKCFI 3070|
|Before:||Hon Marlene Ng J in Court|
|Dates of Judgment:||17 December 2020|
|Appearance:||Thomas WK Wong, instructed by Lu & Partners LLP, acted for the 1st and 2nd Claimants/Respondents|
The Defendants/Appellants sought to overturn the Deputy Presiding Officer’s refusal to transfer proceedings from the Labour Tribunal to the District Court. The Court of First Instance dismissed the appeal, which hinged on the “correct reading” of the Defendants’ ground of appeal after they made a concession on the defence of set-off.
The 1st and 2nd Claimants (collectively “Cs”), who are husband and wife, brought an action in the Labour Tribunal against their employers, the 1st and 2nd Defendants (collectively “Ds”), for various claims including arrears of wages and end of year payments.
Ds alleged that Cs wrongfully and in breach of fiduciary duties misappropriated the company funds. By way of counterclaim, D1 claimed against Cs for, among others, misused company funds, expenses misused or claimed without proper approval and an overpaid sum.
Moreover, Ds requested the Labour Tribunal (“Tribunal”) to decline jurisdiction and transfer Cs’ claims and Ds’ counterclaim to the District Court.
Deputy Presiding Officer’s Refusal Order
The Tribunal’s Deputy Presiding Officer (“DPO”) refused to transfer the hearing of Cs’ claims to the District Court (the “Refusal Order”). It should be noted that the trial for Cs’ claims had already been part heard when the Refusal Order was made.
Furthermore, the DPO noted that, by filing the counterclaim, Ds were not merely raising a set-off but also seeking to recover overpayments allegedly made to Cs due to their misappropriation of company resources. The DPO declined jurisdiction to adjudicate those claims as founded in tort and other areas of law.
Defendants’ appeal against the Refusal Order
Ds applied to the Court of First Instance for leave to appeal on a point of law against the Refusal Order.
On the day after the leave application hearing, D1 commenced an action in the District Court against Cs as defendants. The Statement of Claim largely mirrored D1’s counterclaim in the Tribunal proceedings.
Section 32(1) of the Employment Ordinance (Cap 57) provides that “[no] deductions shall be made by an employer from the wages of his employee or from any other sum due to the employee otherwise than in accordance with this Ordinance”. The Honourable Madam Justice Marlene Ng adopted verbatim paragraphs 20-28 of Thomas’s written submissions (also agreed to by opposing Counsel) as the applicable legal propositions (see §51).
This concession directly led Ds’ Counsel to abandon outright 4 out of 5 grounds, and to rely on just one ground, of appeal, namely that the DPO erred in law by failing to discharge her duty to investigate and to give regard or due weight to the complexity and gravity of Cs’ claims, which gave rise to injustice in that a fair and proper determination of Cs’ claims could not be maintained (“Ground of Appeal”).
Court of First Instance’s Decision – Invalidity of Defendants’ Ground of Appeal
The learned Judge held that the Ground of Appeal concerned the failure to recognise the complexity and gravity of the issues in dispute and the gravity of the allegations raised in Cs’ claims when viewed from the perspective of D1’s Counterclaim. In light of Ds’ concession as to set-off, it was no longer viable for them to pursue the Ground of Appeal.
More importantly, s. 32(1)(a) of the LTO made clear that any appeal against the Refusal Order could only be brought on a point of law as allowed by the CFI. The Court had not granted leave for Ds to appeal on the basis that Cs’ claims on a stand-alone basis raised issues of such gravity and complexity that they should be transferred to the District Court as a separate civil action distinct from D1’s counterclaim: §§68 to 71.
Court of First Instance’s Decision – No Cause to interfere with Tribunal’s exercise of discretion
Even if leave had been granted for Ds to appeal on such ground, the learned Judge did not see any viable point of law for the Court to interfere with the DPO’s exercise of discretion to grant the Refusal Order. With the defence of set-off out of the way, the DPO’s decision is well supported by the decisions she gave in her reasons. The Refusal Order, which separated adjudication of Cs’ claims from the adjudication of D1’s counterclaim, was in principle correct.
Moreover, Cs’ claims, which fell within the Tribunal’s exclusive jurisdiction and were not complex matters, had been part-heard, so there was no justificable reason not to continue with the trial of Cs’ claims in the Tribunal whilst D1 pursues its counterclaim in the District Court (§106)
Accordingly, the Court dismissed Ds’ appeal and ordered them to pay Cs costs of and occasioned by the Appeal.
|Thomas WK Wong, FCIArb, FHKIArb
|Thomas WK Wong is a seasoned civil litigator who was called to the Bar and joined Chambers in 2018. Prior to that, Thomas had practised for seven years as a civil litigation solicitor at three top-tier litigation Firms. He is recently ranked as a “Leading Junior – Tier 2” in Commercial Disputes by Legal 500.,
Disclaimer: This article does not constitute legal advice and seeks to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case.