|
HCA 1707/2014
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 1707 OF 2014
____________
|
BETWEEN
|
| |
UFERAHAL LIMITED
(formerly known as HASSELBLAD ASIA-PACIFIC, (HONG KONG) LIMITED |
1st Plaintiff |
| |
HASSELBLAD AKTIEBOLAG |
2nd Plaintiff |
| |
and
|
|
| |
HANSEN LARRY DOUGLAS |
Defendant |
____________
| Date of Hearing: 19 March 2015 |
| Date of Decision: 27 March 2015 |
_______________
D E C I S I O N
_______________
1. There are 2 applications before me:
A. the defendant’s application to stay P1’s proceedings pursuant to Order 12, rule 8 of the Rules of the High Court;
B. P1 and P2’s application to amend the writ to add a party and to file a statement of claim out of time.
BACKGROUND
2. The Hasselblad Group carries on the business of manufacturing and distributing photographic equipment through its subsidiaries, including P2 and the intended plaintiff (P3). P1 was a wholly owned subsidiary of P2.
3. The defendant was its ex-CEO of the Hasselblad Group employed pursuant to an agreement dated 13 September 2011 (as amended by the Amendment to Employment Agreement dated 2 January 2013) entered into between the defendant, P1and P2 (“the employment agreement”).
4. The defendant was summarily dismissed by P1 on 9 October 2013, having worked for 4 years. He instituted a claim at the Labour Tribunal (“the Tribunal”) on 25 November 2013 under LBTC No. 3762 of 2013 (“the labour claim”), claiming for breach of the employment agreement and sums totalling about HK$12.6 million.
5. By letters dated 6 and 10 February 2014, the plaintiffs had applied for transfer to the High Court on the grounds of complexity of law and fact, location of documents and witnesses abroad and availability of discovery procedure in the High Court. There was a dispute as to whether or not the learned Presiding Officer had refused to transfer the labour claim to the High Court and whether he had given P1 2 months in which to issue proceedings in the High Court. Anyway, at the hearing on 3 June 2014, P1 has still not issued the proceedings; and the Tribunal set the case down for trial for 9 days commencing from 23 September 2014.
6. On 1 September 2014, P1 and P2 filed the writ in the present action. The draft statement of claim relied on causes of action in:
(a) Breach of the employment agreement;
(b) Breach of implied terms;
(c) Breach of fiduciary duties;
(d) Negligence;
(e) Conversion, in using and refusing to return confidential documents obtained whilst in employment of the Hasselblad Group (“the materials”) to P1, P2 and P3 (collectively “the plaintiffs”).
The plaintiffs seek, amongst others, damages, injunction restraining the defendant from using the materials and their delivery up to the plaintiffs.
7. After the writ was issued, P1 applied to the Tribunal for transfer of the labour claim to the High Court.
8. On 10 September, the Tribunal adjourned the trial and application for transfer pending determination of the defendant’s summons to stay the claim in the present case. A hearing for mention was fixed to take place at the Tribunal on 12 January 2015, which was then adjourned to 30 March 2015.
9. The defendant took out his summons under Order 12, rule 8. As he is not willing to submit to the jurisdiction of the High Court, I shall deal with his summons first, although it was filed after the other summons.
A. DEFENDANT’S APPLICATION TO STAY P1’S ACTION
10. The defendant says that P1 is attempting to delay and frustrate the proceedings before the Tribunal, which P1 denies. The parties dispute as to whether or not P1’s claims are within the jurisdiction of the Tribunal.
A1. Relevant statutory provisions on jurisdiction
11. Section 7(1) and (2) of the Labour Tribunal Ordinance, Cap 25 (the “Ordinance”) read together gives exclusive jurisdiction to the Tribunal to determine the claims specified in the Schedule to the Ordinance (“the Schedule”).
12. The High Court will only have jurisdiction if the case is transferred by the Tribunal to it under section 10 of the Ordinance: Borchert v Drmyo Ltd & anor [2010] 1 HKC 168, at paragraphs 15 and 20, Deputy Judge L Chan (as he then was).
13. The claims specified in the Schedule are:
“1. A claim for a sum of money, whether liquidated or unliquidated, which arises from-
(a) the breach of a term, …, 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;
…
(b) the failure of a person to comply with the provisions of the Employment Ordinance …
…
3. Notwithstanding paragraphs 1 and 2, the tribunal shall not have jurisdiction to hear and determine a claim for a sum of money (whether liquidated or unliquidated), or otherwise in respect of a cause of action, founded in tort whether arising from a breach of contract or a breach of a duty imposed by a rule of common law or by any enactment.”
A2. Paragraph 1(a) of the Schedule
14. In order to fall within paragraph 1(a) of the Schedule, 3 matters must be satisfied:
(a) Firstly, there must be a claim “for a sum of money”, whether liquidated or unliquidated.
(b) Secondly, the claim must arise from the breach of a term of contract of employment.
(c) Thirdly, the contract of employment must be “for performance in Hong Kong” or under a contract to which the Contracts for Employment Outside Hong Kong Ordinance (Cap 78) applies.
15. On requirement (b), the Court should only consider the pleadings of the Plaintiffs to decide whether such claims are based on a contract of employment. In Zhu Li v Mayer Brown JSM (a firm) HCMP 2574/2013, 3 January 2014, Macrae JA, at paragraphs 28 and 29, in the Court of Appeal summarised the relevant principles as follows:-
“28. In these circumstances, each of the monetary claims, in so far as they are pleaded as being based on the Contract, the breaches thereof, or the Employment Ordinance or the violation thereof, is a claim for a sum of money which arises from the breach of a term of a contract of employment or from the failure of a person to comply with the provisions of the Employment Ordinance, as specified in paragraph 1 of the Schedule to the Labour Tribunal Ordinance, Cap 25. Pursuant to section 7 of the Labour Tribunal Ordinance, the Labour Tribunal has jurisdiction over these claims, which are not actionable in any other court. Therefore the judge was entirely correct in striking out these monetary claims, as pleaded. We will deal with the claim for medical expenses later on in this judgment.
29. We pause here to emphasise that in expressing our view that the monetary claims ought to be struck out, we express no views as to whether the working relationship between the parties, and any contract between them, was one of employment or not. Nor do we express any views on the merits of such claims. We have come to the conclusion that these monetary claims, simply as a matter of pleading, appear as claims based on a contract of employment over which the District Court has no jurisdiction and therefore ought to be struck out.”
16. On requirement (c), in order to determine whether a contract of employment is “for performance in Hong Kong”, the court should take into account not only the terms of the contract but also where the performance was actually carried out.
17. In Matheson PFC Ltd v Jansen [1994] 2 HKC 250 (CA), it was held that the jurisdiction of the Labour Tribunal did not extend to an employment contract to be performed outside Hong Kong. Liu JA further took the view, obiter, that “a contract to be performed partly outside and (possibly) partly in Hong Kong ... would not come within the specified relationship ... in para 1(a) of the Schedule”.
18. In William Berry Preen v Industries Polytex Ltd (unreported, HCLA 171/1995, 8.3.1996), Yeung J (as he then was) referred to Liu JA’s obiter dictum in Jansen but held that a contract was for performance in Hong Kong if that performance was to take place partly outside Hong Kong, so long as the employer and employee remained “substantially connected to Hong Kong”. In that case, the claimant had to travel to Macau on a daily basis. He was provided with a flat in Macau but was only required to stay there on certain days of the week to ensure smooth production. He was physically in Macau most of the time. He was provided with housing allowance to allow him to live in Hong Kong. However, the group corporate office was in Hong Kong. It was held that the claimant’s employment could well be described as a contract for performance in Hong Kong, and hence within the jurisdiction of the Tribunal.
19. A different scenario occurred in Peter Ward v Harting (HK) Limited (DCCJ 2744/2004, 27 September 2004, District Judge Muttrie), where the contract required the plaintiff to be based in Zhuhai. He did live in factory quarters there, five days a week. His job was to run the factory, ie perform his side of the contract in Zhuhai. Although he was required to liaise with his head office in Hong Kong on Saturday mornings, the Judge held that this did not lead to any implication that he was doing his job and performing his side of the contract in Hong Kong. Further, it appeared that the whole structure of remuneration was geared to minimise tax and so the fact of payment partly in Hong Kong, of whatever elements of the package, did not affect the question of where the contract was to be performed.
A3. Paragraph 3 of the Schedule
20. As to paragraph 3 of the Schedule, all claims in tort are expressly excluded from the jurisdiction of the Tribunal. A...
| 
