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Ma Ngai Cheung v Cobow Contracting & Engineering Co Ltd

Judgment Cited authorities 4 Cited in Precedent Map Related
Vincent
Judgment Date04 March 2021
Neutral Citation[2021] HKDC 264
Judgement NumberDCCJ3925/2020
Subject MatterCivil Action
CourtDistrict Court (Hong Kong)
DCCJ3925/2020 MA NGAI CHEUNG v. COBOW CONTRACTING & ENGINEERING CO LTD

DCCJ 3925/2020

[2021] HKDC 264

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3925 OF 2020

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BETWEEN
MA NGAI CHEUNG Plaintiff

and
COBOW CONTRACTING & Defendant
ENGINEERING COMPANY LIMITED

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

Before: Master Maurice Lam in Chambers (Open to public)

Date of Hearing: 22 February 2021

Date of Decision: 4 March 2021

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DECISION

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INTRODUCTION

1. This is an application by the defendant to strike out the plaintiff’s claim. The application is based on the ground that the Labour Tribunal has exclusive jurisdiction to determine the claim.

2. The plaintiff opposes the application. He contends that the Labour Tribunal has no jurisdiction over his claim because the performance of the relevant employment contract took place outside Hong Kong, and therefore paragraph 1(a) of the Schedule of the Labour Tribunal Ordinance does not apply. Furthermore, two items of his claim (namely, (i) the compensation of the leave pay for rest days, and (ii) the reimbursement of expenses) fall outside the ambit of paragraph 1(b) of the Schedule.

3. The defendant does not dispute that the plaintiff’s performance for the contract took place outside Hong Kong. It contends however that the entire claim of the plaintiff (including the aforementioned two items) falls within the ambit of paragraph 1(b). Accordingly, the main dispute between the parties is whether the said two items fall within the ambit of paragraph 1(b).

4. I heard the application on 22 February 2021. At the hearing, the defendant was represented by Mr Jonathan Ah-weng and the plaintiff by Mr Vincent Kwong. Mr Ah-weng lodged with the Court a total of three skeleton submissions on 11, 16, and 22 February 2021 (the last one just before the start of the hearing) respectively. Mr Kwong lodged his skeleton submissions on 18 February 2021.

5. At the conclusion of the hearing, I indicated that I would hand down a written decision in a later day. This is my decision.

BACKGROUND

6. The defendant is a company incorporated in Hong Kong carrying on business for manufacturing and installation of glass and furniture[1]. It operates a factory for manufacturing glass and furniture in Conghua, PRC[2].

7. According to the plaintiff, he and the defendant, through a Mr Lai, one of the directors of the defendant, entered into an employment agreement in the middle of November 2009, whereby the plaintiff would work in Conghua factory and other cities, countries or locations as designated by the defendant. The agreed wages were $22,000 per month, plus year-end payment and reimbursement of various expenses[3]. In the course of employment, the plaintiff mainly stationed in Conghua and travelled to other places for works in accordance with the instructions of the defendant[4].

8. It is averred in the Statement of Claim that the employment agreement constitutes a contract of employment within the meaning of the Employment Ordinance and the provisions of the Ordinance apply[5]. Furthermore, two supplemental agreements were subsequently entered, whereby parts of the salary were paid in RMB and parts in Hong Kong dollars[6].

9. According to the plaintiff, since about July 2015, the defendant had seriously delayed payment of wages to him[7]. The operation of the Conghua factory also came to halt in about October 2018[8].

10. The plaintiff considered that his employment was deemed terminated on 31 March 2019 without notice. In this action, he claims against the defendant for the following items:-

(a) The said arrears of wages in the sum of $620,380[9];

(b) Payment in lieu of notice in the sum of $22,000[10];

(c) End-of-year payment in the sum of $44,000[11];

(d) Annual leave payment in the sum of $55,828.65[12];

(e) Compensation of leave pay for 14 rest-days in the sum of $11,846.15[13];

(f) Long service payment of $137,464.84[14]; and

(g) Reimbursement of various expenses which he incurred since January 2015 in a total sum of RMB292,732.42[15].

11. As indicated in the beginning of this decision, the present dispute concerns items (e) and (g) only. These two items will be referred to collectively as “the Two Subject Items” below.

THE STRIKING OUT APPLICATION

12. Having considered the parties’ affidavit evidence, it appears that three main issues have been raised. The first issue concerns the performance of the plaintiff’s employment contract. In the affirmation in support, the defendant pointed out that the plaintiff had explicitly stated in the Statement of Claim that his claim was based on the breach of the Employment Ordinance[16]. The plaintiff responded that the Labour Tribunal has no jurisdiction because he performed the employment contract between him and the defendant out of Hong Kong[17]. In the annex attached to his affirmation, the plaintiff set out various Schedules of Work Location indicating that, throughout the period between November 2009 and December 2016, he had only spent a total of about 105 working days in Hong Kong[18].

13. Secondly, in his affirmation in opposition, the plaintiff raised the point that a substantial part of his claim (namely the Two Subject Items) fell outside the exclusive jurisdiction of the Labour Tribunal[19]. As we will see, this point becomes the main dispute between the parties in this striking out application.

14. Finally, according to the defendant, the present action is an abuse of process because the plaintiff had previously instituted a proceeding in the Labour Tribunal for substantially the same items of claim[20]. Voluminous documents are said to have been filed in the tribunal. The plaintiff withdrew the claim after the Presiding Officer made certain comments about the claim. The parties give a slightly different version with regard to the comments made by the Presiding Officer. The plaintiff said that the Presiding Officer only asked him to obtain legal advice before proceeding with his claim[21], whereas the defendant deposed that the Presiding Officer had taken an adverse view in respect of the merits of his claim[22]. The defendant said it was an abuse of process by raising the present action in the District Court after he voluntarily decided to withdraw the claim just because he felt he might not get a favourable result in the Labour Tribunal[23]. At the hearing, Mr Ah-weng also complained about the plaintiff’s failure to produce the transcript of the proceedings to support his contention as regards what the Presiding Officer had actually said during the hearing.

15. It should also be mentioned that, in the affirmation in reply, the defendant denied that there was an employment relationship between the parties[24]. It was asserted that the plaintiff was in fact an employee of the factories in the Mainland – he was employed by Guangzhou Cobow Manufacturing Ltd between 2009 and 2014 and later joined Shanghai Cobow Contracting Ltd[25]. In support of this assertion, the defendant also exhibited contracts signed by the plaintiff with the factories[26].

LEGAL PRINCIPLES

16. The legal principles relating to the striking out a pleading is well-established. It is not necessary to rehearse them in detail here. Suffice it to mention that the defendant relies on the ground that the plaintiff’s claim is frivolous or vexatious.

17. Mr Kwong referred me to a passage from the Whitebook to support a proposition that it is only in plain and obvious cases that the Court should exercise its summary powers to strike out a pleading under the rule and that the applicant bears the burden to show that it is plain and obvious case to strike out. Nor, as stated by the learned editors, should the Court decide difficult points of law in striking out proceedings[27]. Furthermore, Mr Kwong referred me to the Yifung Properties case[28], where Madam Justice Au-Yeung J stated that “Where a litigant brings a claim knowing that there is no substance in it or that it is bound to fail, or if the claim is on its face so manifestly misconceived that it can have no prospect of success, it may be deemed frivolous and an abuse of process.”

18. Mr Ah-weng on the other hand argued that if the Court finds that the Labour Tribunal has jurisdiction over the action, then it has no option but to strike out the claim. Mr Ah-weng relied on the cases of Weng Chi Cheong[29] and Deutsche Bank[30] to support this proposition.

19. The jurisdiction of the Labour Tribunal is set out in ss 7(1) & (2) of the Labour Tribunal Ordinance:-

“(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.”

20. Paragraph 1 of the Schedule provides that:-

“A claim for a sum of money, whether liquidated or unliquidated, which arises from—

(a) the breach of a term, whether express or implied or (if relevant) arising by force of section 10(1) of the Minimum Wage Ordinance (Cap. 608), of a contract of employment, whether for performance in Hong Kong or under a contract to which the Contracts for Employment Outside Hong Kong Ordinance (Cap. 78) applies;

(aa) …

(b) the failure of a person to comply with the provisions of the Employment Ordinance (Cap. 57), the Minimum Wage Ordinance (Cap. 608) or the Apprenticeship Ordinance (Cap. 47),

other than a claim specified in the Schedule to the Minor Employment Claims Adjudication Board Ordinance.”

21. Mr Ah-weng referred me to the Tsui Chung Fai case[31], where Madam Justice Chu J (as her Ladyship then was) held that arrears of wages, year-end bonus and annual leave pay were all...

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