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Xinhua News Media Ltd And Another v Chan Chun Wo And Another

Judgment Cited authorities 5 Cited in 2 Precedent Map Related
Vincent
Judgment Date13 August 2021
Neutral Citation[2021] HKDC 903
Judgement NumberDCCJ6608/2020
Subject MatterCivil Action
CourtDistrict Court (Hong Kong)
DCCJ6608/2020 XINHUA NEWS MEDIA LTD AND ANOTHER v. CHAN CHUN WO AND ANOTHER

DCCJ 6608/2020

[2021] HKDC 903

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6608 OF 2020

________________

BETWEEN

XINHUA NEWS MEDIA LIMITED 1st Plaintiff
XINHUA NEWS MEDIA HOLDINGS LIMITED 2nd Plaintiff
AND
CHAN CHUN WO 1st Defendant
LAU SIU HUNG 2nd Defendant

________________

Coram: His Honour Judge Harold Leong in Chambers

Date of Hearing: 11 June 2021

Date of Decision: 13 August 2021

___________________

DECISION

___________________


1. This is the substantive hearing for 2 Summons taken out by the 1st and 2nd defendants respectively:

a. The 1st defendant’s Summons dated 23 December 2020 to strike out the plaintiffs’ claims on the ground that they fall within the exclusive jurisdiction of the Lands Tribunal;

b. The 2nd defendant’s Summons dated 16 December 2020 for (i) a declaration that the District Court has no jurisdiction; (ii) an order to stay the action permanently; or (iii) an order to strike out.

Background

2. The 1st defendant had been the Co-chairman of the Board, Executive Director and Chief Executive Officer of the 2nd plaintiff as well as the Chief Executive Officer of the 1st plaintiff.

3. The 2nd defendant had been the Managing Director, Chief Financial Officer and Company Secretary of the 2nd plaintiff and an employee of the 1st plaintiff.

4. On 24 July 2020, the 2nd defendant has initiated a claim at the Labour Tribunal against the 1st plaintiff (LBTC 1267/2020) for arears of wages and other payments etc.

5. On 25 September 2020, the 1st defendant have also initiated proceedings at the Labour Tribunal: LBTC 2080/2020 against the 1st plaintiff and LBTC 2079/2020 against the 2nd plaintiff for area of wages and other payments etc.

6. These Labour Tribunal proceedings are on-going.

7. On 9 December 2020, the 1st and 2nd plaintiffs initiated the current action against both defendants in District Court, claiming for overpaid salaries and medical expenses on the bases of breach of employment contracts and/or fiduciary duties. The plaintiffs are not seeking injunction relief.

8. On 10 May 2021, the plaintiffs amended the Statement of Claim which essentially deleted all reference to “breach of employment contracts” and replacing such with allegations of “misappropriation of plaintiffs’ assets” etc.

Legal principles for striking out

9. The legal principles under Order 18 rule 19 are trite and need not be repeated here.

Exclusive jurisdiction of the Labour Tribunal

10. It is trite that any claims based on a breach of express or implied term of a contract of employment falls within the exclusive jurisdiction of the Labour Tribunal, Section 7 and Schedule 1(a) of Labour Tribunal Ordinance (“LTO”).

11. The plaintiffs’ argument is that the breach of fiduciary duties of the defendants, in view of their positions in the companies, are different from that of a normal employee, and there not within the exclusive jurisdiction of the Labour Tribunal. The plaintiffs also argued that the claims were not only based on breach of employment contract but on tort, which brought it into the exception in jurisdiction of the Labour Tribunal stated in paragraph 3 of the Schedule of the LTO.

12. Mr. Brian Lo, counsel for the 1st defendant, referred to the Court of Appeal case of Citipost (Asia) Limited and Julian Robert Holliday, CACV 111/2004. That case also concerned a defendant who was the managing director of the plaintiff company. The allegations were that the defendant was in breach of an implied term of the employment contract or alternatively fiduciary duty in over-claiming his expenses. It was held by Rogers VP, in paragraph 16 of the judgment, that:

“…I have…no doubt that the claims made by the plaintiff in the present proceedings do fall within the exclusive jurisdiction of the Labour Tribunal…Certainly the claim for the return of the allegedly wrongly claimed expenses is a matter which would be much more suitable for the Labour Tribunal to decide than the Court of First Instance.”

13. This was followed by DHCJ Lok (as he then was) in Deutsche Bank AG (HK Branch) v Daniel Mamadou-Blanco [2012] 3 HKC 176 at...

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2 firm's commentaries
  • Hong Kong Court Strikes Out Employment Claim For "Window Dressing"
    • Hong Kong
    • Mondaq Hong Kong
    • 27 August 2021
    ...News Media Ltd & Another v Chan Chun Wo & Another [2021] HKDC 903, the District Court (Court) struck out the employers' claim against former employees for overpaid wages and expenses on the ground that they should have been initiated in the Labour Tribunal. The Court reiterated that the foc......
  • Hong Kong Court Strikes Out Employment Claim For "Window Dressing"
    • Hong Kong
    • Mondaq Hong Kong
    • 27 August 2021
    ...News Media Ltd & Another v Chan Chun Wo & Another [2021] HKDC 903, the District Court (Court) struck out the employers' claim against former employees for overpaid wages and expenses on the ground that they should have been initiated in the Labour Tribunal. The Court reiterated that the foc......

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