FACV No. 8 of 1998
IN THE COURT OF FINAL APPEAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
FINAL APPEAL NO. 8 OF 1998 (CIVIL)
(ON APPEAL FROM CACV No. 155 OF 1997)
|ARCHER, HAROLD DEAN
|THE HONG KONG CHANNEL LIMITED
|Chief Justice Li, Mr Justice Litton PJ, Mr Justice Ching PJ, Mr Justice Bokhary PJ and Sir Anthony Mason NPJ
Date of Hearing: 17 November 1998
Date of Judgment: 27 November 1998
J U D G M E N T
Chief Justice Li:
1. I have read the judgment of Mr Justice Litton PJ and agree with it. For the reasons he gives, I would make the orders he proposes.
Mr Justice Litton PJ:
2. The background facts can be briefly stated. The appellant, plaintiff at the trial, was one of the founders of the respondent company. He did not, however, hold a majority of its shares. Under an employment agreement dated 6 July 1990 he became the managing director and served as such until 17 June 1995 when the directors of the company met. A resolution was then passed that the appellant be dismissed immediately and another director should replace him as managing director. On 5 July 1995 the company sent him a cheque for HK$40,000 under cover of a letter which 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.".
3. The company had been in financial difficulties for some time prior to June 1995. The appellant had, on a number of occasions, deferred drawing his salary to enable the company to pay its creditors and was therefore owed salary 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 appellant's favour for $82,356. He was not awarded costs, but because the company had succeeded in its counterclaim (which substantially reduced the award in the appellant's favour) it was given the costs of the counterclaim.
The proceedings at first instance
4. At the hearing before Deputy Judge Longley the appellant was unrepresented. Amongst the various heads of claim in his statement of claim he sought an award under section 31R of the Employment Ordinance, Cap 57, for long service payment.
5. Under section 31R(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. It is common ground that the number of years of service as at the relevant date, for the purposes of this case, was five years. One then goes to the definition of relevant date in section 2 and finds that where the contract of employment is terminated by payment in lieu of notice in accordance with section 7, the relevant date is the date up to which the wages are calculated: In the present case, it would be 16 July 1995 if the sending of the cheque for $40,000 and its acceptance, as salary in lieu of notice, had the effect under section 7 of terminating the contract of employment as at that date. Calculated thus, the appellant 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, or some other date prior to 6 July 1995 (the fifth anniversary of the plaintiff's commencement of employment). This point was, however, overlooked in the trial court. In his consideration of the appellant's various claims the judge did not have the statutory definition of relevant date in section 31R(1)(a) in mind.
Court of Appeal
6. In his notice of appeal to the Court of Appeal the appellant specifically raised the point that the effective date of termination of his employment was 16 July 1995 and accordingly the trial judge had erred in failing to make an award under section 31R(1)(a) for long service payment. The point was, however, rejected by the Court of Appeal: Once again, the statutory definition of relevant date in section 31R(1)(a) was overlooked.
7. In his judgment, Liu JA said this:
"Throughout, the provisions of the Employment Ordinance, Cap. 57 applied. The plaintiff was thus liable to dismissal on payment in lieu of notice pursuant to s.7 of that Ordinance".
8. Despite the fact that the appellant was paid on 5 July 1995 his monthly salary in lieu of notice, Liu JA nevertheless held that the appellant was "effectively dismissed as at 17 June 1995" (the date of the director's meeting) and accordingly failed to qualify for long service payment under section 31R(1)(a).
9. Nazareth V-P said this:
"... it is plain ... that his employment terminated immediately upon payment of a month's salary in lieu of notice. Clearly, the judge was right in determining that he was not entitled to a long service payment as his service fell short of the qualifying period of five years."
10. Likewise, Nazareth V-P had overlooked the statutory definition of relevant date.
11. Cheung J agreed with the two Justices of Appeal on this issue and did not deal with it separately in his judgment.
Application for leave to appeal to Court of Final Appeal
12. By notice dated 31 December 1997 the appellant applied to the Court of Appeal for leave to appeal to this Court. The failure of the lower courts to give effect to the statutory meaning of relevant date in section 31R(1)(a) was clearly spelt out in his application. This was heard by the Court of Appeal on 19 February 1998. In dealing with that application Nazareth V-P, giving the decision of that Court, said:
"What has happened here is that a provision of the Employment Ordinance that is perfectly clear, and that no one suggests causes any difficulty in its interpretation or application, was not relied upon and in consequence overlooked by everyone, by the parties, by the Court of First Instance, by the Court of Appeal, by counsel."
13. The Court of Appeal nevertheless refused to grant leave to appeal.
14. Leave having been given by the Appeal Committee on 21 May 1998 for the appellant to appeal to this Court, it is here, at the final appellate stage, that the point falls for determination for...