Archer, Harold Dean v The Hong Kong Channel Ltd

FAMV No. 7 of 1998

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 7 OF 1998 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM CACV 155 OF 1997)

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DETERMINATION

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Mr Justice Litton PJ:

Introduction

1. This is the determination, by a majority, of the Appeal Committee on an application for leave to appeal made under section 23(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484.

2. The matter comes before us in unusual circumstances. The amount in dispute is well below $1 million. The question involved in the appeal is not of great general or public importance. What the applicant says is that through oversight on the part of everyone concerned in the courts below an obvious point of law in his favour has been overlooked, resulting in blatant injustice. Section 22(1)(b) of Cap 484 empowers us to give leave if we are of the opinion that 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. Counsel for the applicant submits that the words "or otherwise" in s22(1)(b) allows us a wide margin of discretion to correct the wrong.

The facts

3. The bare facts behind the application are these. The applicant was the managing director of the defendant company, and had been so for many years. He was also a shareholder in the company. At a director's meeting held on Saturday 17 June 1995 a resolution was passed to the effect that the applicant's employment "be terminated immediately". By a second resolution at the same meeting the applicant was "removed as managing director" and someone else was appointed in his place. On 5 July 1995 the company sent a letter to the applicant enclosing a cheque for HK$40,000. The letter said:

"As instructed by the Hongkong Channel's Board of Directors, please find enclosed a cheque for one months salary HK$40,000 in lieu of notice.".

4. The company had been in financial difficulties for some time prior to June 1995. The applicant had, on a number of occasions, deferred drawing his salary to enable the company to pay its creditors and was therefore owed salary in arrears at the time of his dismissal. He brought proceedings against the company in the Labour Tribunal but these were transferred to the High Court. Pleadings were ordered. There were claims and counterclaims. The case was tried by Deputy Judge Longley resulting in a judgment in the applicant's favour for $82,356. There was no award of costs in his favour but because the respondent succeeded in its counterclaim (which substantially reduced the award in the applicant's favour) the respondent was given the costs of the counterclaim.

The proceedings at first instance

5. At the hearing before Deputy Judge Longley the applicant was unrepresented. Amongst the various heads of claim in his statement of claim he sought an award under s31R of the Employment Ordinance, Cap 57, for long service payment. Under s31R(1)(a) an employee who has been employed under a continuous contract for not less than the number of years of service at the relevant date, as specified in the Fifth Schedule to the Ordinance, is entitled to long service payment. Where the contract of employment is terminated by payment in lieu of notice in accordance with s7, the "relevant date" is defined in s2 as the date up to which the wages are calculated: in the present case, it would be 17 July 1995. Calculated thus, the applicant would have had 5 years' continuous service and would have been entitled to long service payment: But not so if the "relevant date" was 17 June 1995. This point, now glaringly obvious, was not perceived in the trial court. The definition of "relevant date" in section 2 of the Employment Ordinance was overlooked. This error stands in stark outline when it is appreciated that the trial judge proceeded on the basis that the applicant had contractual entitlement to wages in lieu of notice. In dealing with the applicant's contention that his housing allowance entitlement should be treated as part of his "wages" for the purpose of "wages in lieu of notice", the judge said:

"... the plaintiff received more than his contractual entitlement in respect of wages in lieu of notice. The plaintiff's claim for an additional sum in respect of wages in lieu of notice therefore fails."

6. Had his "contractual entitlement", as defined by statute, been properly calculated, he would have fulfilled the 5-years' continuous service condition and would have succeeded on his long service payment claim.

Appeal to the Court of Appeal

7. The applicant, in effect, lost at first instance and as earlier mentioned had costs awarded against him. Being dissatisfied, he appealed to the Court of Appeal. In his notice of appeal dated 16 July 1997 he raised the issue of long service payment. Paragraph 2, as relevant, reads:

"2. THE GROUNDS OF APPEAL

(a) The learned Deputy Judge erred in taking the date of the Appellant's dismissal as synonymous with the date of termination of his contract of employment, namely, 17th June 1995, and in so doing wrongly concluded that the Appellant's period of employment fell short of the 5 years required to qualify for a long service payment under PART VB Employment Ordinance Cap. 57.

(b) In this respect the learned Deputy Judge failed to take into account sufficiently or at all the following:-

(i) the provisions of ss.5, 6 and 7 Employment Ordinance Cap. 57 which apply in the absence of agreement as to termination of employment by notice.

(ii) that the Appellant's written contract of employment dated 6th July 1990 contained no provisions for termination of employment by notice.

(iii) that the Respondents by a letter dated 5th July 1995 addressed to the Plaintiff enclosed a cheque for $40,000.00 representing one month's salary in lieu of notice.

(c) In the premises the learned Deputy Judge should have found that the effective date of termination of the...