Case Detail

HCA 2372/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2372 OF 2002

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BETWEEN

	DIAS SANDRA MARY ELIZABETH	Plaintiff
	and
	CATHAY PACIFIC AIRWAYS LIMITED	Defendant

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Coram: Master Ko in Chambers

Date of Hearing: 25 September 2008

Date of Judgment: 21 November 2008

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D E C I S I O N

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1. This is the Plaintiff’s application under O.38, r.2A for leave to adduce her supplemental witness statement. The application is opposed by the Defendant.

2. At the hearing, Mr. Carolan (counsel for the Plaintiff) informs the court that, in light of the Defendant’s opposition, the Plaintiff has volunteered some revision to her supplemental witness statement attached to the summons. The revised version (“the Statement”) can be found at pages 297-364 of the hearing bundle and it is this version that the Plaintiff will now seek to adduce.

3. Notwithstanding previous communication and despite the Plaintiff’s revision, Ms. Lam (solicitor for the Defendant) informs the court that the Defendant still objects to paragraphs 4, 5, 6, 7, 8, 9, 10, 14, 15, 23, 26, 27, 28, 29, 30, 34, 35, 36, 37, 46, 48, 49, 51, 52, 53, 58, 72, 73, 74, 75, 76, 77, 78, 79, 80, 91, 94, 97, 128, 129, 130, 131, 132, 133, 134, 135 and 136 of the Statement. The Defendant is not otherwise opposing the application.

Preliminary argument

4. As a prelude to the main argument, Mr. Carolan mounts a preliminary attack on the Defendant’s opposition. He submits that the stance taken by the Defendant is a waste of time and costs because:

(a)  There can be no valid objection to the Statement which is a response to the supplemental witness statement of Mr. Tsang Kin Chun (“Tsang II”) and the witness statement of Ms. Zara Chiu Ahmad Mustaffa (“Chiu I”) filed by the Defendant in June 2005.
He refers me back in time to the order dated 29^th August 2005 made by consent, whereby the Defendant was granted leave to adduce Tsang II and Chiu I and the Plaintiff was granted leave to adduce a supplemental witness statement consequentially. He explains that the Plaintiff did not adduce her supplemental witness statement back then because the Defendant then took out an application to re-amend its defence and to adduce a witness statement of Ms. May Tang. The application was opposed by the Plaintiff and was only disposed of by Deputy Judge Muttrie in November 2005. There then followed some more interlocutory matters and the action fell dormant in 2007.
In those circumstances, says Mr. Carolan, the Defendant’s opposition to the administrative act of filing the Statement is an obtrusive tactic.
(b)  Any legitimate concern the Defendant may have on the supplemental witness statement attached to the summons should have been addressed by the revision volunteered by the Plaintiff.
(c)  The proper way for the Defendant to object to any part of the Statement is to apply to strike them out at trial. He relies on the following observation from Hong Kong Civil Procedure 2008:
“… any argument that the statement of a witness contains any inadmissible evidence or other objectionable material should be left to be heard after the witness has produced it at the trial, rather than dealt with by way of a prior application to compel the statement to be amended.”[1]

5. Mr. Carolan submits that the task of evaluating whether certain part of the Statement is admissible or not should be left to the trial judge. He cites the decision of Sakhrani J. dated 25^th January 2007 in Kralik James Christopher v Vtech Holdings Limited, HCA 2894/2004 as an example of the trial judge dealing with objections to witness statements.

6. He observes that the witness statements already filed by the parties also contain inadmissible evidence. This is because the statements were put in before Deputy Judge Muttrie disallowed the Defendant’s application to add to its defence the averment about the alleged theft by the Plaintiff of a bottle of champagne belonging to the Defendant. Moreover, both parties have amended their pleadings after filing of the statements. He says that the Plaintiff will in due course apply to the trial judge to tidy-up the statements and expunge inadmissible parts and it would be better to leave a full picture to the trial judge.

7. Mr. Carolan warns that any part(s) of the Statement expunged at an interlocutory stage may still be admitted by the trial judge. He cites the following judgment inAllington Investments Corp v First Pacific Bancshares Holdings Ltd [1995] 2 HKC 567 at 569H-570B in support:

“It is important to bear in mind though the reason for expunging a witness statement or a part thereof may often be the inadmissibility of such evidence, it is not impossible for the matter to be decided on other grounds. In the premises, it is not inevitable that an order expunging a witness statement or a part thereof would render the evidence wholly inadmissible for all purposes at the trial. It is still open in some circumstances for the trial judge to exercise his discretion to allow the evidence, whether for a limited purpose or otherwise, notwithstanding that it is not contained in a witness statement. When the trial judge’s attention is drawn to the order expunging that part of the evidence from the witness statement, it is almost inconceivable that he would not grant leave under O.28, r.2A(7) if the evidence should otherwise be admitted. It can hardly be reasonable for an opposing party to object to such evidence on the ground that there had been non-compliance with r.2A if such a failure to comply was a result of that opposing party’s doing.”

8. He further warns that the Plaintiff may lodge an appeal if I rule out any part(s) of the Statement.

9. In the end, Mr. Carolan suggests that if I find any substance in the Defendant’s opposition, I should simply refer the application to the trial judge under O.32, r.12 and give suitable direction for the listing master to set the application down before the trial judge. He relies on the following obiter dicta in Hong Kong Polytechnic University v. Next Magazine Publishing Limited [1996] 2 HKLR 260 at 266B-C in support:

“In those cases where an appeal is likely to be lodged whatever the decision of the master, costs would be saved in the long run if use was made of RSC O.32, r.12 for the master to refer to a judge any matter which he thinks should properly be decided by the judge.”

10. In response, Ms. Lam relies on the following judgment in Allington to justify raising the objections now:

“Witness statements are exchanged pursuant to O.38 r.2A of the Rules of the Supreme Court. The reasons for giving such a direction are clearly set out in para.38/2A/2 at p.649 of Vol.1 of the 1995 Supreme Court Practice. In general, such process serves to facilitate cost-effective and fair disposal of the proceedings. It is a step in the preparation for trial, and would become evidence in the trial only if the court makes an order that such statement stands as the evidence in chief of the witness, or if the other side puts it in for cross-examination of the witness. Disclosure of contents of the evidence of a witness in his witness statement is thus of interlocutory nature similar to the disclosure of documents in a list of documents. The propriety of the contents of such documents, be it a witness statement or a list of documents, is a matter that can be dealt with as an interlocutory matter prior to trial. The contents of a list of documents, i.e. the extent of discovery, must be dealt with as an interlocutory matter. However, as the contents of a witness statement can become evidence in the trial, it is, in this respect, to be distinguished from a list of documents. In the premises, it is open to the party to deal with disputes over the propriety of a witness statement or parts thereof either as an interlocutory matter before trial, or as a matter of evidence for the trial judge's discretion at the trial. There can be no hard and fast rule when should be the proper time to deal with such a dispute. It would depend on a variety of circumstances, including how far down the line the case has progressed, how close is it to the trial, whether it is necessary to have the dispute resolved in sufficient time before trial to avoid any unnecessary adjournment of trial, whether it is fair and just to have an early resolution of such dispute? If the dispute arose only shortly before trial, it may be that there is little justification for not leaving it to be resolved by the trial judge, as little can be gained from a slightly earlier resolution of the dispute. However, if the dispute relates to an important part of the case, an early resolution of the dispute might be necessary to enable the objecting party to know what evidence he will have to face, and to call in reply at the trial.”

11. She says that the objections are taken from a case management point of view. The Statement contains far more material than is necessary for the fair and expeditious disposal of the case. For example,

(a)  it refers to unpleaded and irrelevant documents (e.g. the Defendant’s operations manuals);
(b)  it makes reference to on-going court proceedings involving other flight attendants which are irrelevant;
(c)  it contains irrelevant and prejudicial material (e.g. alleged questionable behaviour of the Defendant’s witnesses); and
(d)  it contains speculation, opinion and legal submission.

12. She says that the Defendant needs to know what case it will have to meet at trial and to prepare for it. If the Statement is admitted in its present form, the Defendant will have to widen its investigation, interview other potential witnesses and go through many more documents. The costs of preparing the defence for trial will escalate disproportionately. All these can be avoided if the Defendant’s concerns can be addressed now.

Correct approach

13. Both parties cited Allington as an example of the court dealing with objections to witness statements before trial.

14. Mr. Carolan, however, advises caution in relying on that case. He says that the court there struck out parts of the witness statements containing hearsay evidence for which no hearsay notice had been given. He observes that the law on the use of hearsay evidence in civil proceedings has since changed and the result would be different if the case were to be decided today.

15. Although Mr. Carolan expresses reservation over Allington, he does not dispute the court’s jurisdiction to entertain objections to witness statements at the interlocutory stage. In my view, the passage in Allington relied on by Ms. Lam (quoted above) is still good law and is particularly pertinent to the present application.

16. The Plaintiff has lost her right to adduce a supplemental witness statement when she failed (for whatever reasons) to comply with the order dated 29^th August 2005. O.38, r.2A(10) clearly provides that where a party fails to comply with a direction for the exchange of witness statements, he shall not be entitled to adduce evidence to which the direction related without the leave of the court. The parties may not even extend by consent the period specified by the court for the exchange of witness statements[2]. That was why the listing master directed the Plaintiff to take out the present application.

17. In my view, the concerns raised by the Defendant, if sustained, are legitimate. For example, parties will need to know if they need to extend the scope of discovery to cover documents such as the Defendant’s operations manuals or documents pertaining to Ms. Chong’s case and Ms. Ms. Camaclang’s case. They will also need to know if they need to adduce evidence to deal with allegations concerning the behaviour of the Defendant’s witnesses. I have no doubt that an early determination of these concerns will promote certainty and assist parties to focus on the real issues in dispute. This will hopefully help to save some time and costs.

18. Although this case was commenced in the Labour Tribunal and transferred to the Court of First Instance way back in 2002, it is far from being ready for trial. The checklist hearing has been adjourned with no return date. Leave to set this case down for trial is yet to be granted and no trial judge has been nominated.

19. In those circumstances, I consider that the Defendant is quite justified in raising its objections to the Statement now as opposed to leaving it until trial.

20. Had the Plaintiff (or indeed any party) been serious about inviting the trial judge to deal with the application (and the objections), she should have raised it earlier. It was apparently not raised before the listing master when the Plaintiff was directed to take out this application. It was also not raised at the call-over hearing of this application, resulting in the application being set down for argument before a master with one whole day reserved. Parties have lodged in bundles, submissions and authorities before the hearing and are apparently fully prepared for the substantive argument. By the time both parties finished their preliminary argument, the better part of the day was gone. It is, in my view, certainly not conducive to good case management that applications to refer the substantive argument to a judge or the trial judge should be left until the substantive hearing before the master.

Relevant law on witness statements

21. The Plaintiff’s application is made under O.38, r.2A. O.38, r.2A(1) provides that the court’s power under that rule should be exercised for the purpose of disposing fairly and expeditiously of the cause or matter before it, and saving costs, having regard to all the circumstances of the case including (but not limited to):

(a)  the extent to which the facts are in dispute or have been admitted;
(b)  the extent to which the issues of fact are defined by the pleadings; and
(c)  the extent to which information has been or is likely to be provided by further and better particulars, answers to interrogatories or otherwise.

22. Parties have referred me to Hong Kong Civil Procedure 2008 on the relevant law on witness statements.

23. This includes the following observation on supplementary statements of witnesses:

“Although there is no express provisions to this effect, the court has power, if it thinks fit to do so, to direct that a further written statement of a witness be served supplementary to that already served. The better practice is that the evidence dealing with or contradicting any statements made by witnesses of the opposite party should be given orally rather than be dealt with by way of a supplementary statement … A supplementary statement may be allowed to be served to give the witness of a party the chance to fill in gaps in his own statement or to answer the statement of the opposite party.”[3]

24. The following observation on contents of witnesses’ statements is also instructive:

“The overriding features of the written statements of the witness which may be served pursuant to the direction of the court … are:-
(1) that they are intended for use at the trial itself; and
(2) that they relate to issues of fact to be adduced at the trial.
Accordingly, the written statement of such a witness must contain only such material facts as the witness is able to prove of his own knowledge (cf. O.41, r.5(1) as to the content of an affidavit). The written statement of witness is the equivalent of the oral evidence which that witness will give if called, in his evidence in chief at the trial…
Again, like the oral evidence of the trial witness, his written statement must not contain any inadmissible evidence … It must not contain any statement of information or belief even if the grounds and reasons thereof are given …
Like the oral evidence of the trial witness, a written statement must not contain any expressions of opinion, but be confined to matters of fact.” [4]

Present state of pleadings

25. I shall begin the discussion by considering the extent to which the facts are in dispute or have been admitted and the extent to which the issues of fact are defined by the pleadings.

26. Both parties have changed their case since the proceedings began. There were several rounds of extensive amendments to the pleadings. Probably due to the fact that the amendments were settled by different drafter at different times, the end product seems a bit convoluted.

27. The pleadings now before the court consist of:

(a) the Plaintiff’s Amended Statement of Claim (“ASOC”), further and better particulars thereof, and the Re-Re-Amended Reply (“RRAR”); and
(b) the Defendant’s Re-Re-Amended Defence (“RRAD”), and further and better particulars of the Amended Defence.

28. It is common ground that the Plaintiff had been employed by the Defendant as a flight attendant. She was dismissed by the Defendant with effect from 27^th February 2001 with payment of one month’s salary in lieu of notice. [5]

29. It is the Plaintiff’s case that the express terms of her employment contract were contained in 3 documents: conditions of service cabin crew (1.1.86 version) (“COS”), staff benefits handbook (cabin attendant) (Revised 1.1.86 and subsequently as “Issued July 91”) (“Handbook”) and the offer letter dated 10^th September 1990[6]. The Defendant denies that the Handbook formed part of the contractual documents[7].

30. The Plaintiff’s present claim comprises 5 aspects:

(a)  loss of use of the payment in lieu of notice received;
(b)  loss of use of the retirement grant received;
(c)  damages for non-compliance of the disciplinary and grievance policy (“DGP”);
(d)  loss of retirement grant (“RG”); and
(e)  loss of retirement travel benefit (“RTB”).

31. I am told at the hearing that the parties are about to conclude a settlement on part of the action, which will dispose of the first two aspects. Both Mr. Carolan and Ms. Lam agree that those two aspects are irrelevant to the present application.

(a) Damages for non-compliance of DGP

32. Both parties agree that DGP applied to the Plaintiff as part of her employment contract.[8]

33. It is the Plaintiff’s case that[9]:

(a)  The Plaintiff’s employment could only be terminated by the Defendant by retirement upon the Plaintiff reaching the retirement age or by dismissal for disciplinary reasons.
(b)  According to DGP:
(i)  She was entitled to verbal/written/final warning, an interview and an opportunity to provide written explanation prior to any disciplinary action.
(ii)  A decision to terminate her employment with payment in lieu of notice could only be made “in the event of a cabin crew member engaging in misconduct which amounts to a serious breach of the … member’s terms of service or for repetition of misconduct of a less serious nature” (DGP 8.1).
(iii)  She was entitled to submit a notice of appeal within 14 days after the date of written notification of a disciplinary decision. The appeal would have taken 3 separate stages and she was entitled to adequate opportunity to make representations and submissions relating to the appeal.
(c)  The Defendant failed to follow the procedure set out in DGP in terminating her employment and was thus in breach of her employment contract.
(d)  The proper disciplinary procedure would have taken at least one month to complete. Hence, the Defendant is liable for one month’s salary and allowances or damages to be assessed.

34. The primary defence is that the Defendant was entitled to terminate the Plaintiff’s employment:

(a) with notice or payment in lieu of notice, as a matter of contract under COS 25(A) and by statute under s.7 of the Employment Ordinance[10]; or
(b) without notice, as a matter of contract under COS 27 and by statute under s.9 of the Employment Ordinance [11],

and DGP expressly provides that its provisions do not restrict or limit the Defendant’s right to terminate the employment of a flight attendant[12].

35. The Defendant says it terminated the Plaintiff’s employment by payment of one month’s salary in lieu of notice[13]. Furthermore, the Defendant would have justified terminating the Plaintiff’s employment without notice by reason of the Plaintiff’s poor performance, misconduct, and/or dishonesty as particularised in paragraph 14G of RRAD [14].

36. The Defendant further says that:

(a) on a proper construction of DGP, the Plaintiff was not entitled to a warning before termination[15], there was no right of appeal against a decision to terminate or that the Defendant was not obliged to follow the appeal procedure in DGP[16], and the Defendant was not required to maintain or reinstate the Plaintiff pending the outcome of an appeal even if there was a right of appeal[17]; and
(b) the Defendant has fully complied with DGP to the extent required of it and to the extent which the Plaintiff availed herself of DGP[18].

37. For the above defences, the Defendant denies the Plaintiff’s claim for damages for failing to comply with DGP.

38. In reply, the Plaintiff avers that:

(a)  on a true and proper construction, COS 25(A) did not provide the Defendant with a right to terminate the Plaintiff’s employment. Furthermore, the clause was void for illegality being contrary to ss.12, 15, 15A and 70 of the Employment Ordinance[19];
(b)  the only contractual right of the Defendant to terminate her employment was provided in COS 27 and DGP 8.1 which would have required disciplinary action[20]; and
(c)  of the poor performance, misconduct and dishonesty alleged in paragraph 14G of RRAD, only the incident mentioned in paragraph 14G(d)(ii) was referred to by the Defendant at the time of termination[21].

(b) Loss of RG

39. This claim is based on the terms of COS. The Plaintiff says she should be entitled to RG calculated at 180% of her final monthly basic salary for each completed year of service. However, she was only paid an amount calculated at 100%. Hence, she claims for the balance.[22]

40. The Defendant’s defence is three-fold:

(a)  The Plaintiff gave up her rights to RG under COS when she opted to join the Swire Group Retirement Benefits Scheme (“SGRBS”) with effect from 1^st November 1993. Upon her termination, the Plaintiff has already received benefits from SGRBS. In the premises, the Plaintiff is estopped from claiming RG under COS.[23]
(b)  Under the terms of SGRBS and COS, the Plaintiff was not entitled to benefits calculated at 180%, as she did not leave employment on her “Normal Retirement Date”.[24]
(c)  The Plaintiff had no entitlement to RG under the terms of COS, DGP and SGRBS by reason of the fact that the Defendant would have been justified in terminating the Plaintiff’s employment without notice due to her poor performance, misconduct and/or dishonesty as particularized under paragraph 14G of RRAD.[25]

41. The Plaintiff claims that she is contractually entitled to RTB according to the provisions in the Handbook, and she calculated her entitlement to be $7,560,000.[26]

42. Again, the defence is three-fold:

(a)  The Defendant denies that the Handbook formed part of the employment contract. It is the Defendant’s primary case that RTB is discretionary and subject to the Defendant’s policy published from time to time.[27]
(b)  If the Handbook formed part of the employment contract, the Plaintiff’s entitlement to RTB was forfeited upon termination, in accordance with the provisions in the Handbook, COS and DGP, by reason her poor performance, misconduct and/or dishonesty as particularized under paragraph 14G of RRAD.[28]
(c)  The Defendant also disputes the Plaintiff’s calculation.[29]

43. Having set the scene for the discussion, I shall now turn to the disputed paragraphs in the Statement.

Discussion on the specific objections

44. The disputed paragraphs can be grouped together for discussion based on their content and the nature of the objection.

(a) Objections to para.4-10, 14, 15 and 23 of the Statement

45. These disputed paragraphs are included in the section entitled “Suspension and Termination”. Put very simply, the Plaintiff considers her suspension and subsequent termination to be personal. She offers her own interpretation of the events leading to her termination in these paragraphs. For example:

(a)  In paragraph 4, she contrasts Mr. Tsang’s account in his first witness statement as to how an investigation should be carried out with the fact that she received the first suspension letter on the same day as Ms. May Tang’s reports and prior to any investigation.
(b)  In paragraph 5, she says that her prime accuser Ms. Tang was interviewed by Mr. Tsang without the presence of any witness. She complains that Mr. Tsang has failed to give an account of Ms. Tang’s interview. She was not given an opportunity to review any statement received from other witnesses and to challenge her accusers.
(c)  In paragraph 6, she refers to s.11(1) of the Employment Ordinance and argues that suspension without pay and benefits should be reserved for serious cases. She complains that her case did not fall into that category and the Defendant’s initial stance in suspending her without pay and benefits was in breach of the normal rules.
(d)  In paragraph 7, she complains that the timeline of the Bombay incident and her suspension shows that the Team Office and Ms. Tang were using the incident as an excuse to terminate her employment. She says that although Ms. Tang had the authority to suspend her on the spot in Bombay, she did not do so. Ms. Tang waited until after the crew had arrived back in Hong Kong before so doing and she expects Ms. Tang to have discussed with the Team Office before filing the reports against her. She also complains that although Ms. Abreo was interviewed on the day when Ms. Tang submitted her reports, Ms. Abreo was only subsequently asked to write a report.
(e)  In paragraph 8, she forensically examines the two reports submitted by Ms. Tang and concludes that the first one appears to have been “completely whited out and rewritten”. She says she believes that the first report must have been not convincing enough to justify her termination and so Ms. Tang was given help to rewrite it.
(f)  In paragraph 9, she says that Flight Attendants Union has received many complaints from crew members about Mr. Tsang, and his team had been “routinely flouting company policy while management looked the other way”. She further complains that Ms. Linda Chong, Ms. Zara Chiu, Ms. Shirley Au-Yeung and Ms. Quince Chong have all indulged in “highly questionable behaviors leading up to and after [her] termination”. She goes on to complain:
(i)  that the most trivial of incidents were highlighted and placed on record against her;
(ii)  about two bullying incidents by Ms. Linda Chong and that she was “led to believe by someone who worked with [Ms. Chong] that she was going to use her influence in the Team Office to terminate her employment”. Her request to Mr. Tsang to remove Ms. Chong from her case was denied and “it came as no surprise that what was supposed to be a discussion of just three outstanding incidents, none of them violations, suddenly turned into a serious disciplinary interview…”;
(iii)  that Ms. Abreo was “pressured to present the picture required of her”. The Plaintiff describes Ms. Abreo as “a nervous junior crew who supported an ailing father in Bombay and could not afford to lose her job”. She says that Ms. Abreo was first interviewed on their return from Bombay at which time “she could not support [Ms. Tang’s] allegations and no report was filed by her”. Later on, Ms. Abreo was interviewed again. She was shown the Plaintiff’s performance profile by Ms. Chong and was encouraged to “add a few things to her statement”. Given the fact that Ms. Abreo did not take contemporaneous notes at the time of the Bombay incident and that the report was only filed a week later, she does not believe Ms. Abreo’s account and quotes to be entirely correct; and
(iv)  The case concerning her sick leave in Paris was wrong in that the Defendant had failed to check if it was authorized by a doctor.
(g)  In paragraph 10, she complains that the Defendant has changed its line(s) of defence in this case over the years.
(h)  In paragraph 14, she complains that she was singled out by Mr. Tsang and his team (especially Ms. Linda Chong and Ms. Zara Chiu). She says her termination seems to be a foregone conclusion as soon as she complained about Ms. Chong’s bullying tactics in June 2000.
(i)  In paragraph 15, she complains that Ms. Lam was neither interviewed nor issued a warning for her misconduct.
(j)  In paragraph 23, she complains that no action was taken against Ms. Tang for her misconduct.

46. Ms. Lam says that the Plaintiff has already given an account of the facts surrounding her suspension and termination in her first statement already filed. What the Plaintiff is trying to do here is to question the motive behind the decision to terminate her employment and to challenge the character of the Defendant’s witnesses.

47. Ms Lam observes it is the Plaintiff’s pleaded case that her employment was terminated by payment of one month’s salary in lieu of notice[30]. As such, it will be futile for her to question the underlying motive in dismissing her. She relies on Reda v Flag Ltd [2002] UKPC 38 at para.42-43 and submits that a power to dismiss without cause is a power to dismiss for any cause or none.

48. Ms. Lam further observes that the Plaintiff is not claiming any relief arising from the manner of her dismissal. Relying on Johnson v Unisys Ltd [2001] 2 All ER 801, she submits that the Plaintiff has no right at common law anyway to claim for financial losses arising from the unfair manner of her dismissal.

49. Commenting specifically on the disputed paragraphs, she says that:

(a)  Since the Plaintiff has already dealt with her suspension and the letters in her first statement, paragraph 4 serves no purpose.
(b)  The Defendant is not required to take on the role of the court in its investigation and the Plaintiff is not entitled to an account of Ms. Tang’s interview or to review the documents as contended in paragraph 5.
(c)  Paragraph 6 is in the nature of legal submission and the correctness of the decision to suspend the Plaintiff has no relevance as she is not seeking any relief in that regard.
(d)  Paragraph 7 is pure speculation on the part of the Plaintiff and contains statement of belief or opinion as opposed to statement of fact.
(e)  The Plaintiff assumed the role of a handwriting expert and gives an opinion on the reports in paragraph 8.
(f)  The Plaintiff attempts to attack the character of the Defendant’s witnesses in paragraph 9. The allegations, which are speculation and hearsay, are not probative to the issues in dispute. It is also oppressive and unfair for the Plaintiff to mount general attack on their character, as the Defendant will be unable to deal with such general allegation.
(g)  Paragraph 10 contains conjectures and postulation of the Defendant’s strategy in defending itself, which is irrelevant.
(h)  Paragraph 14 contains the Plaintiff’s own opinion as to the existence of a conspiracy against her as opposed to any statement of fact and is irrelevant.
(i)  The Plaintiff is not privy to Ms. Lam’s circumstances and what she alleges in paragraph 15 can only be speculation without probative value.
(j)  The alleged misconduct of Ms. Tang in paragraph 23 has not been pleaded and is irrelevant to the issues in dispute.

50. I am in general agreement with Ms. Lam. The Plaintiff has already given an account of the facts surrounding her suspension and termination in her first statement. It is not her pleaded case that she has been unfairly dismissed and she is not claiming any relief based on that ground.

51. The Plaintiff is clearly attempting to smear the character of the Defendant’s witnesses and to suggest a conspiracy against her. In my view, all these are irrelevant given the Defendant’s own pleaded case and the issues in dispute. The Plaintiff should take guidance from Hong Kong Civil Procedure 2008 in drafting her statement. It should relate to the issues in dispute and be confined to matters of fact, and should not contain expressions of opinion.

52. Paragraph 9(d), however, should be looked at in a different light. When it is read together with paragraph 34 of the Statement, it is clear that the Plaintiff is attempting to answer the allegation pleaded in paragraph 14G(a)(iii) of RRAD. As such, it relates to an issue in dispute and should be allowed.

53. Hence, all these disputed paragraphs except paragraph 9(d) should be expunged.

(b) Objections to para.26-30, 58 and 133-136 of the Statement

54. The Plaintiff says that other dismissed flight attendants had received RTB after their dismissal. In these disputed paragraphs, she gives detailed account of the case of Ms. Courtney Chong and the case of Ms. Annie Camaclang. She complains that she has not been given discovery in this action of documents pertaining to these 2 cases.

55. The Plaintiff’s claim on RTB is based on the terms of the Handbook. At trial, the primary question will be whether the Handbook formed part of the Plaintiff’s employment contract. If not, then the court will consider whether according to the Defendant’s published policy the Plaintiff should be entitled to such benefits as a matter of discretion. If the court finds that the Handbook formed part of the employment contract, it will then decide if the Plaintiff’s entitlement has been forfeited as contended by the Defendant. If it finds in the Plaintiff’s favour, then the court will consider the question of quantum.

56. Therefore, whether or not other retired flight attendants might have received RTB after their employment with the Defendant had been terminated is neither here nor there. Ms. Lam further relies on the following judgment in Kelly v Cathay Pacific Airways Ltd [2007] 4 HKLRD 881 at 887, which involved another flight attendant of the Defendant claiming for RTB, to bring home the point that the court in construing the Plaintiff’s employment contract will not be assisted by the evidence of other users:

“Mr. Simon Lui [i.e. the flight attendant’s counsel] referred to The Interpretation of Contracts by Kim Lewison QC, to show that the evidence of acts of user is admissible as an aid to the construction of the contract of employment. We do not believe this is of assistance. As we have mentioned, the dispute between the parties is over whether the RTB was contractual or discretionary. So evidence of user would not help. But, as is clear from The Interpretation of Contracts at para.11.05, the authorities cited therein related to the interpretation of parcels clauses. As Megarry J (as he then was) in St Edmundsbury & Ipswich Diocesan Board of Finance & Another v Clark (No 2) [1973] 1 WLR 1572, and quoted by Lewison, said:
‘… One may accept to the full that it (this doctrine) does not apply to commercial contracts or, for that matter, to any language of obligation, whatever the document.’”

57. In any event, according to the Plaintiff, although Ms. Chong and Ms. Camaclang had once been granted RTB after their termination, their entitlement has since been withdrawn by the Defendant. Their claims against the Defendant for reinstatement of RTB are still ongoing. So, the cases of Ms. Chong and Ms. Camaclang do not in fact advance the Plaintiff’s cause. I do not see how the trial judge in this case can be asked to determine also whether Ms. Chong and Ms. Camaclang should be entitled to RTB under their respective employment contract. Providing discovery on those 2 cases in such circumstances is, in my view, not justified.

58. These paragraphs should therefore be expunged.

59. The Plaintiff attempts to respond to paragraphs 29-35 of Mr. Tsang’s first statement in these disputed paragraphs.

60. The Defendant objects to them because the Plaintiff merely seeks to contradict Mr. Tsang’s evidence by repeatedly accusing him of getting his facts wrong but without providing any substantive answer.

61. I will allow these paragraphs. The Plaintiff is responding to some of the allegations made by Mr. Tsang on her alleged poor performance, misconduct and dishonesty. The Plaintiff has elaborated on why she considers Mr. Tsang to be wrong in these paragraphs. Whether the Plaintiff’s explanation should be accepted should be left to the trial judge.

(d) Objections to para.46, 48 and 49 of the Statement

62. Mr. Tsang dealt with the events leading to the Plaintiff’s dismissal in paragraphs 31-44 of his first statement. In paragraph 36(iii), he mentioned about the Plaintiff’s letter reciting an accident involving Ms. Tang on board a flight from Hong Kong to Bombay. Mr. Tsang then stated that “Ms. Tang, the alleged ‘victim’ in the accident, never filed a Cabin Safety Report, which she would have had an obligation to do as an ISM, if she, like the Plaintiff, had considered the accident of such gravity as warranting ISD’s attention.”

63. In paragraph 3 of Tsang II, Mr. Tsang clarified that “Upon further enquiry with the Inflight Safety and Standards Section in ISD, however, it was discovered that Ms. Tang had filed such a report…”.

64. In these disputed paragraphs:

(a)  The Plaintiff claims that she had consulted Mr. Pinto, Assistant Manger Safety Training, before sending out her letter, which was copied to Mr. Pinto.
(b)  She says she fails to understand why Mr. Tsang did not check carefully before claiming in his first statement that Ms. Tang had not filed a corresponding report.
(c)  She suspects that Ms. Tang’s report was never in fact filed, as there is no date stamped on it.
(d)  She claims to have checked with Mr. Ian Williams, Technical Training Manager, about one month after the accident and was told that no Cabin Safety Report had been filed. She then makes the point that “Mr. Tsang has ‘found’ a copy of it in the ISD Safety Training Department, when it was not there when I checked in March 2001.”

65. To start with, the subject accident has not been pleaded. In any event, Mr. Tsang has already accepted his mistake on the existence of Ms. Tang’s report (which corroborates the Plaintiff’s allegation). I fail to see how an investigation into these allegations can contribute to the fair and expeditious disposal of this case. These paragraphs should therefore be expunged.

(e) Objections to para.51-53 of the Statement

66. These disputed paragraphs contain the Plaintiff’s response to paragraph 4 of Tsang II.

67. Ms. Lam is not contending that these paragraphs are irrelevant. Rather, she finds them objectionable because, according to her, the Plaintiff has only stated her disagreement without providing any substantive answer.

68. Although paragraph 38/2A/10 of Hong Kong Civil Procedure 2008 states that the better practice is for a witness to deal with or contradict the witness statements of the opposite party orally at the trial, this is merely a suggestion. In any event, the Plaintiff has stated more than her disagreement in these paragraphs. Even if I were to exclude them now, the Plaintiff will no doubt reiterate them again orally at trial when dealing with Mr. Tsang’s evidence. In the exercise of my discretion, I shall allow these paragraphs.

(f) Objections to para.72-76 of the Statement

69. These disputed paragraphs are supposed to contain the Plaintiff’s response to paragraphs 21-24 of Tsang II entitled “The Plaintiff’s Records of Meetings”.

(a)  In paragraph 72, the Plaintiff says that after the interview on 21^st February 2001, she was informed that she had been suspended without pay or benefits until further notice and was asked to handover her company identity cards without which she could not access the Defendant’s premises or obtain medical benefits. She says she was asked to prepare a report on the spot. She complains that the rapid and extreme response indicates her dismissal to be predetermined.
(b)  In paragraphs 73-74, the Plaintiff mentions about an incident in which Mr. Tsang allegedly took out a “rectangular box-like object wrapped in a paper bag” and claimed that to be a camera which contained photographs taken at the Bombay hotel of the content of her crew bag. She says Mr. Tsang attempted to use that to obtain an admission from her but to no avail. She complains that Mr. Tsang’s behaviour confirmed her belief that he was planning to dismiss her without serious investigation.
(c)  In paragraphs 75-76, the Plaintiff first complains that she had not been informed that the interview on 26^th February 2001 was a termination interview. She says she did not take notes at the interview as she had not been advised to do so and so she only prepared her record subsequently at home. She also says that section 5 of DGP would have given her the right to have an observer present at the interview. Secondly, she says she has since been led to believe that the Defendant might have electronically recorded the interviews although she did not see any recording device at the time. She says the fact that Ms. Zara Chiu has produced contemporaneous notes for the first interview but did not take notes consistently at the interview confirms her belief. Thirdly, she points out that there is no audio recording or “contemporaneous notes” to confirm wither her version or Ms. Chiu’s version.

70. In my view, paragraphs 72-74 do not in fact relate to Tsang II. They seek to challenge Ms. Tsang’s character and go to the motive behind the decision to terminate the Plaintiff’s employment. As I have endeavoured to explain above, these are irrelevant to the issues in dispute.

71. In objecting to paragraphs 75-76, Ms. Lam says that the Plaintiff’s belief that the interview might have been recorded is irrelevant and that the allegations contained in these paragraphs are not statements of fact but mere conjectures on the part of the Plaintiff. I agree. In addition, the Plaintiff has not pleaded any breach of section 5 of DGP in her claim based on alleged non-compliance with DGP.

72. I therefore expunge paragraphs 72-76.

(g) Objections to para.77-80 of the Statement

73. In Chiu I, Ms. Zara Chiu briefly states her employment history with the Defendant, her appointment as a Performance Development Executive (“PDE”) between 1990 and 2005, the work nature of a PDE, and her involvement with the Plaintiff as a PDE including issuing the written warning dated 21^st June 2000 and attending the interviews held on 21^st and 26^th February 2001.

74. These disputed paragraphs are put under the title “Zara Chiu Ahmed Mustaffa’s witness statement dated 17^th June 2005” in the Statement. It is clear that the Plaintiff seeks to generally attack the character of Ms. Chiu as well as her other colleagues in these paragraphs. For example, she says that:

(a)  PDE used to be called “coordinator”, which was regarded by some to be a bad word. Despite the change of title, many PDEs remain the same. No particular skills or requirements were necessary to become a PDE, just a bit of seniority and a friend who is already a coordinator.
(b)  The Defendant was a relatively small airline in the 1970s and employed a much smaller crew. So, the crews from that time naturally established a good rapport. She says that Mr. Tsang and the older sister of Ms. May Tang both joined the Defendant in the 1970s, while Ms. May Tang and her other sister, Ms. Zara Chiu and Ms. Linda Chong all joined in about 1983-4. Hence, they would have got to know each other very well over the years.
(c)  Her accusers did not file a complaint immediately whilst the airplane was still airborne. Instead, they visited the Team Office after their flight to discuss with colleagues there including Ms. Zara Chiu and Ms. Linda Chong to confirm that their grievances would be accepted by the Team Office before filing their complaints. In paragraphs 80(a)-(d), she implicates Ms. Steele, Ms. Lim, Ms. Zara Chiu and Ms. May Tang who have all filed a report against her.

75. Ms. Lam challenges these paragraphs because the Plaintiff merely seeks to discredit the Defendant’s witnesses which is not probative. In reply, Mr. Carolan says that the Plaintiff should be entitled to respond to Chiu I.

76. I agree with Ms. Lam that the disputed paragraphs have no probative value. Ms. Chiu merely sets out her employment history and her appointment as PDE as background to her involvement with the Plaintiff. The qualification for PDEs and what others might once have considered about the title “coordinator” are, in my view, irrelevant. The suggestion that since the Defendant’s witnesses joined the Defendant at or about the same time and so they must have teamed up against the Plaintiff is another facet of the conspiracy theory which is irrelevant. What will be of relevance at trial is whether the poor performance, misconduct and dishonesty alleged against the Plaintiff could be established by evidence. The Plaintiff has already provided her explanation in her first statement. What she now seeks to do in paragraphs 80(a)-(d) is not to fill in gaps but to smear her accusers. As I have explained above, this should not be allowed.

77. Furthermore, I accept Ms. Lam’s submission that if these paragraphs were allowed, the Defendant would have to interview all those persons named which would mean more time and costs.

78. I will disallow these paragraphs.

(h) Objections to para.91, 94, 97 and 128-132 of the Statement

79. In paragraphs 15 and 16 of Mr. Nipperess’s statement, he stated that the long standing policy and the nature of RTB are reflected in documents such as COS, the Handbook, Staff Benefits Handbooks issued in 1992 and 1993, an explanatory memo dated 11^th February 1993 and a Concessional Travel Policy dated 1997. Such benefit is described as “concessions” and “privileges” in these documents which connotes a discretion on the part of the Defendant.

80. In paragraph 91, the Plaintiff refers to the section of COS relating to “Rebated Travel” and observes that the word “discretionary” is not used there. In paragraph 94, she details the documents which supplemented COS over the years. These documents include the Defendant’s newsletters, operations manuals, Concessional Travel Policy dated 1995, medical booklets dated 1997 and 1998 and related annual statements, various letters and circulars. In paragraph 97, she recounts how her entitlement to medical benefits under COS and the Handbook has been changed.

81. Furthermore in paragraphs 128-132, the Plaintiff:

(a)  disputes that the use of “concessions” and “privileges” means such benefits are non-contractual;
(b)  cites the definition of “benefit”, “privilege”, “concession”, “grant” and “discretion” in Chambers Everyday Dictionary;
(c)  argues, with illustrations, that the Defendant has used the terms “benefit”, “privilege”, “concession” interchangeable in some documents to describe a right; and
(d)  states that there is no blanket discretionary clause in either COS or any version of the Handbook.

82. Ms. Lam objects to the above paragraphs because:

(a)  paragraph 91 is legal submission;
(b)  paragraph 94 is contrary to the pleaded case of the Plaintiff that the express terms of her employment contract were contained in the three documents pleaded and the Plaintiff is attempting to allege other contractual documents;
(c)  the Plaintiff’s medical benefits is not in issue; and
(d)  the Plaintiff has put forward legal arguments in paragraphs 128-132 as opposed to statements of fact.

83. In reply, Mr. Carolan says that the Plaintiff is merely attempting to comment on the language used in the relevant documents. He says he needs more time to study the documents mentioned in paragraph 94 before he can point out how they are relevant. He says from his own experience that witnesses usually like to comment on documents and trial judges will ignore their comments if they are irrelevant. He questions why the Defendant does not object to other paragraphs in the same vein.

84. It is the Defendant’s case that RTB is discretionary and is subject to the Defendant’s policy published from time to time[31]. Mr. Nipperess has enumerated the documents in which the Defendant’s policy was published. In my view, the Plaintiff is quite entitled to name the document(s) which she says contained the Defendant’s policy. The identification of these documents is a statement of fact.

85. Although these paragraphs may have the effect of expanding the scope of discovery, this seems inevitable given the Defendant’s express reliance on its policy on RTB as published from time to time. Mr. Nipperess has certainly gone beyond the Handbook to illustrate the Defendant’s policy.

86. My reading of paragraph 94 is that the Plaintiff is merely giving an account of how COS is supplemented or updated by various documents over the years. It does not necessarily mean that all the documents mentioned therein are relevant. Even the Plaintiff’s counsel cannot justify their relevancy at the hearing. The scope of discovery should be judged by relevancy of the documents to the matters in question in the action. I shall leave it to the good sense of the parties’ legal advisers to advise them on the relevancy of those documents and whether they need to be disclosed.

87. In short, I will allow these paragraphs except paragraph 97. Paragraph 97 should be expunged for the reason advanced by Ms. Lam.

Conclusion

88. For the above reasons, I grant leave to the Plaintiff to file and serve the Statement save that paragraphs 4-8, 9-9(c), 10, 14-15, 23, 26-30, 46, 48-49, 58, 72-80, 97 and 133-136 should be expunged.

89. On costs, I am of the preliminary view that the Plaintiff’s application is occasioned by the course of litigation and the Defendant has substantiated its objections. In those circumstances, I make a costs order nisi that:

(a) the costs of and occasioned by the Plaintiff’s application (including the costs of the call-over hearing) be in the cause; and
(b) the costs of the hearing before me be paid by the Plaintiff to the Defendant in any event to be taxed if not agreed.

	(J. Ko)
	Master of the High Court

Mr Paul Carolan, instructed by Messrs Oldham, Li & Nie, for the Plaintiff

Ms Anita Lam of Messrs Johnson, Stokes & Master, for the Defendant

[1] At para.38/2A/9.

[2] See O.38, r.2A(2).

[3] See Hong Kong Civil Procedure 2008, para.38/2A/10.

[4] See Hong Kong Civil Procedure 2008, para.38/2A/6.

[5] See para.1-2 & 9 of ASOC; para.2-3 & 9 of RRAD.

[6] See para.1 of ASOC.

[7] See para.2, 5 & 15 of RRAD.

[8] See para.9A(e) of ASOC; para.14E & 14M of RRAD.

[9] See para.7, 9A-9C of ASOC.

[10] See para.8-8B of RRAD.

[11] See para.9A & 8A of RRAD.

[12] See para.14F of RRAD.

[13] See para.9 of RRAD.

[14] See para.9A of RRAD.

[15] See para.14J(a) of RRAD.

[16] See para.14J(b) of RRAD.

[17] See para.14K of RRAD.

[18] See para.14E, 14H, 14I & 14L of RRAD.

[19] See para.4 of RRAR.

[20] See para.5 of RRAR.

[21] See para.6 of RRAR.

[22] See para.3-4 & 9(ii)-(iii) of ASOC.

[23] See para.4A-4C of RRAD.

[24] See para.13F-14C of RRAD.

[25] See para.14D of RRAD.

[26] See para.5 & 10-11 of ASOC.

[27] See para.6 & 15 of RRAD.

[28] See para.16 of RRAD.

[29] See para.16A-18 of RRAD.

[30] See para.9 of ASOC.

[31] See para.6 & 15 of RRAD.

HCA2372/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.2372 OF 2002

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

BETWEEN

	DIAS SANDRA MARY ELIZABETH	Plaintiff
	and
	CATHAY PACIFIC AIRWAYS LIMITED	Defendant

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

Before : Deputy High Court Judge Muttrie in Chambers

Date of Hearing : 3 November 2005

Date of Ruling : 18 November 2005

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

R U L I N G

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

1. This is an employment case. The plaintiff, Ms Dias, was employed by the defendant, Cathay, as a flight attendant. Cathay terminated her contract by payment in lieu of notice. She now claims primarily for damages and/or a declaration of right in respect of retirement travel benefits (“RTB”) which she says are provided under her contract of employment, but denied to her following her termination. There are other claims but I need not go into them for the purposes of this ruling.

2. Cathay now applies to re-amend its Amended Defence. It seeks to add to existing averments of misconduct new averments relating to the alleged theft by Ms Dias of a bottle of champagne belonging to Cathay. It also seeks leave to file and serve the witness statement of one Tang Yoke May (“Ms Tang”).

3. Ms Dias takes objection to these amendments, and to the filing of the witness statement. In brief, she says that this is a new case, which should have been pleaded much earlier, and was in effect abandoned. She will be prejudiced if Cathay is allowed to advance it now. Therefore the court should, in its discretion, refuse to allow the amendments.

Background

4. Ms Dias was employed as a flight attendant by Cathay from 12 November 1990 to 27 February 2001. Her contract was terminated by payment of one month’s wages in lieu of notice following an inquiry into her conduct during flight duty between 15 and 18 February 2001, between Hong Kong and Mumbai.

5. She instituted proceedings in the Labour Tribunal on 11 February 2002, and on 3 June 2002 the proceedings were transferred to the High Court. The pleadings now before this court consist of an Amended Statement of Claim dated 5 July 2003, an Amended Defence dated 26 July 2003, Further and Better Particulars of the Amended Defence and an Amended Reply dated 25 November 2003.

The existing pleadings

6. Both parties’ cases have changed since the proceedings began. Ms Dias originally claimed that the terms of her contract of employment were set out in a Staff Benefits Handbook which provided for RTB on reaching retirement age, which in her case is 40 years. In breach of the terms of her employment, Cathay informed her that she would not be entitled to such travel benefits. Even if her employment was lawfully terminated, she was still entitled to RTB from age 40 onwards. At that stage, Cathay’s defence was that the terms of the Handbook were not terms of the employment and further that as a matter of construction, Ms Dias was not entitled to RTB because she had not retired but had been dismissed.

7. In the Amended Statement of Claim Ms Dias pleaded that her terms of employment were contained in Cathay’s conditions of cabin crew (“COS”) as well as the Handbook earlier pleaded. There was also a Disciplinary and Grievance Policy (“DGP”) which was part of the terms of her employment. Her employment was not terminated in accordance with the DGP and Cathay was in breach of contract in failing to follow it.

8. In its Amended Defence, Cathay maintained that Ms Dias’ employment was terminated and that she did not retire, and that in the premises, any terms of employment relating to retirement were irrelevant. In addition, it pleaded that the COS gave it the right to dismiss her without notice or benefit for neglect or failure to perform her duties to its satisfaction. As to the DGP, Cathay pleaded that its terms were not terms of Ms Dias’ employment, but if they were, it provided that, in the event of termination, in circumstances involving misconduct amounting to a serious breach of the terms of employment, or the repetition of misconduct of a less serious nature, privileges such as RTB could be removed at Cathay’s discretion. In the alternative, it pleaded that if the DGP applied, it was entitled to terminate Ms Dias’ employment as a consequence of her misconduct.

9. Such misconduct was, in the Amended Defence, particularised as :

(a) poor performance in the exercise of her duty;

(b) failure to report for duty and reporting late for duty;

(c) failure to comply with the Defendant’s internal procedures;

(d) dishonesty; and

(e) failure to comply with overseas customs regulations.

10. The relevant provisions of the DGP, or at any rate those assumed to be relevant, for I am told they come from an edition published after the date of termination, are as follows :

“8. Termination of Employment

8.1 A Cabin Crew member’s employment may be terminated, with notice or payment in lieu of notice, in the event of a Cabin Crew member engaging in misconduct which amounts to a serious breach of the terms of service or for the repetition of misconduct of a less serious nature.

…

8.6 In the event of a employment being terminated in such circumstances, privileges such as retiree travel will be removed at the company’s sole discretion.”

11. Non-exclusive examples of misconduct are given at paragraph 8.2 of the DGP. These include breach of trust or confidence and misconduct prejudicial or likely to cause harm to the reputation of the Company. Paragraph 9 makes provision for misconduct which gives the Company the right to summary dismissal. The non-exclusive examples given include fraud or dishonesty such as taking company property.

12. Ms Dias requested further and better particulars of misconduct and these were provided on 18 December 2003. The particulars in Answers (a) to (d) do not concern me here, because they are repeated in the proposed amended pleadings and no objection is taken to them.

13. In respect of dishonesty, it was alleged in Answer (e)(i) that on or before 24 March 1998 she forged the signature of a colleague on an application form for mutual exchange of flight duties and submitted the false application form to Cathay as a valid and genuine application. In other words, what is pleaded is forgery and uttering.

14. In respect of failure to comply with overseas customs regulations it was alleged in Answer (e)(ii) that on 15 February 2001, while on duty and having arrived in Mumbai on flight CX750 Ms Dias failed to comply with the regulations in that she was carrying a mobile telephone and a bottle of wine in respect of which she did not or did not properly declare.

The disputed amendments

15. These appear in paragraph (d)(ii) of the particulars of the proposed paragraph 14G, which alleges misconduct. The most important one reads :

“(d) Dishonesty and other serious misconduct

(ii) Unauthorised removal of Defendant’s property from its aircraft

On or about 15 February 2001, during an inspection undertaken by the Customs Department at … Mumbai, and subsequently upon a search of her bag at the crew hotel on the same day, the Plaintiff was found to have been carrying in her luggage a bottle of champagne wine named “Krug” that had been taken from the Defendant’s aircraft without authorisation from the Defendant.”

16. Sub-paragraphs (i) and (iii) plead respectively the forgery and uttering, and the failure to comply with customs regulations already pleaded and no objection is taken to them.

17. Sub-paragraphs (iv) to (v) plead dereliction of duty, mainly on the subsequent return flight to Hong Kong, when it is said that Ms Dias attempted to persuade Ms Tang, who was the Inflight Services Manager, i.e. her superior officer, not to report the incidents at Mumbai, and further she attempted to persuade other crew members to assist her in this attempt. No objection is taken to these pleadings insofar as they relate to the alleged breach of customs regulations, but counsel agree that if sub-paragraph (ii) is not allowed as part of the amendments, references to it in the subsequent sub-paragraphs will also have to be edited out.

18. Sub-paragraph (vi) relates to an alleged admission by Ms Dias to Ms Tang that the bottle of wine not declared to customs was the bottle of champagne, and a later admission that she had stolen the champagne; an interview and a written statement in which Ms Dias denied taking anything, or having any alcohol in her bag when she passed through customs; and a further interview in which she admitted that she was carrying a bottle of wine when she passed through customs. In the event that I disallow sub-paragraph (ii), it is agreed that of sub-paragraph (vi) should be edited to leave in averments which relate to the customs matter but there is some dispute as to what that entails.

19. In effect, therefore, Cathay seeks to add averments of theft and related matters such as admissions, denials and attempts to persuade others not to report it, to the existing averments of misconduct relating to the incident at Mumbai on 15 February 2001. It also seeks to file the statement of May Tang in support of these allegations.

Evidence of the Mumbai incident

20. Cathay has filed witness statements of Tsang Kin Chung, its Cabin Crew Line Manager, and Zara Chu Ahmad Mustaffa, a Performance Development Executive, both of whom were involved in interviews with Ms Dias in February 2001 after the Mumbai incident and before the termination of her employment.

21. There is no direct evidence on Cathay’s side of what happened at Mumbai and on the return flight. Mr Tsang collected statements of Ms Dias herself and four other cabin crew members, namely Ms Chuah, Ms Lakdawalla, Ms Abreo and Ms Nazareth and flight reports submitted by Ms Tang. The substance what these ladies say is that the customs officer gave a verbal warning to Ms Dias for declaring the wrong mobile phone and not declaring a dutiable item which the officer referred to as a bottle. Ms Dias, whose home was in Mumbai, got off the crew bus to go home and the others went to their hotel. She mistakenly took Ms Lakdawalla’s bag and left her own on the bus. At the hotel, Ms Tang, in the presence of the others, opened the bag to find out whose it was. They found inside it a bottle; Ms Chuah said it was Krug champagne and Ms Tang said it was Krug champagne in a Cathay shopping bag. Ms Tang telephoned Ms Dias who admitted that she had taken the champagne for her friends in Mumbai and asked Ms Tang not to report it. On the return flight to Hong Kong, Ms Dias spent most of her time trying to persuade Ms Tang and the others not to report the incident; meanwhile, others had to do her work for her. In Hong Kong, Ms Dias telephoned Ms Nazareth asking if it was necessary to report that she had alcohol in her bag; what she had was home-made medicine. She further telephoned Ms Lakdawalla and also told her that the bottle in the bag was home-made medicine.

22. Mr Tsang says that in her own statement Ms Dias blamed Ms Tang for causing the customs officer to spot-check the crew, because she did not hand over the customs declaration forms when she should have done. There was nothing dutiable in the bag but the officer made a rude comment about the mobile phone. There was a bottle but it was home-made medicine. Ms Tang was trying to take revenge for an earlier incident for which she blamed Ms Dias, and it was hinted that Ms Chuah agreed to corroborate the story of the champagne in order for Ms Tang to cover up misconduct on Ms Chuah’s part.

23. In her own witness statement, Ms Dias says that the customs officer at Mumbai was irritated because most of the flight crew had gone through customs without handing over their declaration forms as they were supposed to. So their bags were checked. She was found to have written down her mobile phone model number as 8210 instead of 3210. She apologised and he let her through without paying duty. There were no dutiable items in the bag. If there had been any, it would have been confiscated because the Indian customs authorities are strict. She did indeed take home the wrong bag. Later, she heard of the allegation that a bottle of champagne had been found in her own bag. Ms Tang reported her for it, and she was suspended from duty. But she had not taken any champagne. She had in her bag a dark plastic water bottle containing medicinal water for stomach trouble. She does not say anything about what happened on the return flight or later.

24. In a supplemental witness statement Mr Tsang says, inter alia, that he and his colleagues had no doubt that Ms Dias had stolen the champagne from the aircraft, because Cathay serves Krug champagne, because when challenged Ms Tang admitted it, because Ms Tang’s report was supported by the other crew members and none of them had any reason to make false reports, and because Ms Dias’ subsequent denials contradicted her earlier admission. Mr Carolan, who appears for Ms Dias, says that this is scandalous, and he will apply to have it struck out at trial under Order 41, rule 6. I do not quite know why; the rule deals with scandalous or irrelevant matter in an affidavit, not a statement. But no doubt, if there is no pleading of theft, any evidence of theft or admission of theft will be irrelevant; and the witness’s belief will also be irrelevant.

25. I do not think it is necessary for the purposes of this ruling to go into what the other flight attendants wrote, or into the details of the interviews. But it is common ground that the allegation of taking a bottle of champagne was made at the interviews. Mr Tsang says that she first denied it, but later admitted carrying a bottle of white wine which was detected by the Bombay customs through X-ray. In fact both he and Ms Chu produce records they say they made at the interviews, and from these it appears that Ms Dias first admitted carrying her own bottle of wine but not taking champagne, but later denied everything. In her statement, Ms Dias says that, at the first interview, Cathay staff tried to get her to co-operate by admitting having taken the champagne. She was told to write a letter stating her position, which she did. At the second interview, when she did not co-operate, they told her that she was terminated.

26. This letter in fact went missing for some time in Cathay’s offices but it has now come to light. It contains no admission, and an explanation that there was a bottle of home-made medicine in the bag.

27. It appears that Ms Dias applied, through her trade union to the Indian customs authority and got a confirmation from it that nothing untoward had happened; but this is useless because, for whatever reason, the date given by the union to the authority, and mentioned in the authority’s reply is 26 February and not 15 February 2001.

Evidence on the application to amend

28. In her affidavit in opposition to the application to amend, Ms Dias says that because of the lateness of the proposed amendments, she is prejudiced in her ability to refute them. She refers to the fact that when her solicitors requested particulars of the original paragraph 18 of Cathay’s defence which pleaded that on termination an employee’s RTB were forfeit, Cathay’s solicitors replied that there was no need for particulars because Ms Dias’ conduct of her duties was not an issue which was relevant for the purposes of the trial of the action. Only after she herself amended was any kind of misconduct pleaded.

29. She says that cannot now contact other flight attendants, in particular Ms Lakdawalla and Ms Nazareth, who she believes would be able to give evidence supporting her version of events. Nor can she contact other crew members, namely Ms Chuah and Ms Abreo, who may be able to give evidence which would assist her. She believed that there was no need to pursue a correct report from the Indian customs authority because, in the beginning, Cathay was not going to rely on her misconduct; and now that it has become necessary because of the new allegations that also is too late. If she had known in the beginning that Cathay would rely on theft she would have sought to get statements from the witnesses and a correct report from the Indian customs.

30. Cathay’s solicitor, Ms Iu, has filed an affidavit in reply in which she produces all the statements of the flight crew members, which she says were earlier discovered. She refers to the fact that Ms Dias in her statement refutes the allegations against her, including that of theft of champagne. She says that Ms Dias is not prejudiced by being unable to contact other witnesses, and has in any event never asked Cathay for their details.

31. I have not seen any affidavit in support of the application to amend; only Ms Iu’s reply to Ms Dias’ affidavit in opposition. What is conspicuously lacking is any evidence from Cathay as to why, having elected not to plead the theft allegations as part of the misconduct, it now wishes to plead them at this stage.

Principles

32. Generally amendment will be allowed if it can be made without injustice to the other side. There is no injustice if the other side can be compensated by costs. The general principles are set out at paragraph 20/8/6, and the principles on late amendment at paragraph 20/8/10 of the Hong Kong Civil Procedure 2004. The proposed amendments are late; they come two years after the Defence was amended in July 2003.

33. Leave to amend late is readily granted, on payment of costs, unless the opponent will be placed in a worse position than he would have been if the amended pleading had been served in the first instance. But there may be difficulty if there is ground for believing that the application is not made in good faith. Thus, if either party seeks to amend by introducing for the first time allegations of fraud, misrepresentation or other such serious allegation, the court will ask why this was not pleaded originally, and may require to be satisfied as to the truth and substantiality of the proposed amendment. See Lawrance v. Norreys (1890) 39 Ch D 213.

34. Mr Carolan, who appears for Ms Dias, says that in effect the case on theft has been abandoned. He says that the circumstances are similar, by analogy, to those in the case of Cellular Clothing Co. Ltd v. G White & Co. Ltd [1952] 70 RPC 2. In that case, the plaintiff claimed relief for infringement of trademark in its writ, but in its statement of claim pleaded passing off but not infringement. It was held to have abandoned the infringement claim, and refused leave to amend so as to bring it in later. Mr McLeish, who appears for Cathay, has referred me to the case of Woomera Co. Ltd & Anor v. Provident Centre Development Ltd [1985] HKLR 263 (CA) in which the Court of Appeal, having considered Cellular Clothing, held that it could not interfere with the discretion of the judge below, who had allowed amendments which pleaded a claim earlier abandoned.

35. References have also been made to cases involving the question of waiver by an employer who chooses to terminate an employee’s contract by notice, knowing that he has grounds for summary dismissal. In fact, Cathay wishes to include an amendment to the effect that it could have dismissed Ms Dias without notice, but that amendment relates to Ms Dias case for late payment of salary in lieu of notice, and not to the RTB claim. These cases were not referred to in the skeleton arguments and I do not think they assist much on the pleading point concerned here. Really all that the cases above cited tell us is that amendment is a matter of discretion. Harman J exercised it one way, and Liu J exercised it the other way. The discretion is wide; see the comments of Lord Griffiths in Ketteman v. Hansel Properties Ltd [1987] AC 187 at 220 :

“Whether an amendment should be granted is a matter for the discretion of the trial judge and he should be guided in the exercise of the discretion by his assessment of where justice lies. Many and diverse factors will bear upon the exercise of this discretion. I do not think it possible to enumerate them all or wise to attempt to do so. But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes, and the legitimate expectation that the trial will determine the issues one way or the other.”

36. That case was one in which the amendments came very late indeed; but these general comments apply in every case.

37. What is in issue is whether the amendments would subject Ms Dias to injustice which could not be compensated by costs.

Injustice

38. The question is whether, if the amendment is allowed, Ms Dias will be worse off than if the new matter had been pleaded in the Amended Defence in July 2003?

39. The amendments do not represent Cathay’s primary case. Cathay says that Ms Dias is not entitled to RTB in any event; and further that the DGP do not apply. Only if it be found that the first limb of the defence is wrong, and that the DGP do apply will it be necessary for Cathay to prove “misconduct which amounts to a serious breach of the terms of service or for the repetition of misconduct of a less serious nature”.

40. There is no dispute about the pleadings of repetitive breach although I have to wonder whether the matters complained of are particularly serious. But that is a matter for trial. As to serious misconduct, what we have is a three-year-old instance of dishonesty (the forgery) and the Mumbai incident, which is currently pleaded as only a customs violation.

41. Ms Dias explains the alleged forgery thus. There was a practice for crew members to agree to swap flights. Cathay required both their signatures on a swap form. Because it was difficult for them to meet in order for both of them to sign the form, crew solved the problem by one member giving her ICAO number to the other and telling her to put it on the form and sign the form for her. If that is right, of course, there was no dishonesty. That is a matter for trial but the incident happened in March 1998 and one wonders why, if Cathay really saw this as an offence of dishonesty, it took no action at that time.

42. As to the customs violation, again one wonders how seriously it can be regarded if the customs officer took no action in respect of the mobile phone or the wine, if indeed there was wine in the bag. Writing down a wrong serial number is no great matter. No doubt Ms Dias would know that there was no duty free allowance for liquor — that appears in a crew information form appended to one of Ms Tang’s reports — but equally that fact would mean that if she had liquor, it would most probably have been confiscated. If it was not confiscated, that would imply that the matter was so trifling that the customs officer had the discretion to enforce the rule or not.

43. In my view, there is not much substance in the averments of “misconduct which amounts to a serious breach of the terms of service”. If the averments are proved it will be open to the court to say that Cathay itself cannot have seen the first incident as serious, and should not have seen the second as serious if the Indian customs did not. Now, however, Cathay seeks to plead theft, even though that term is not used. Theft is invariably a serious matter and theft by an employee is aggravated by the element of breach of trust. Leaving aside any question of how good Cathay’s case on theft is, if Cathay can bring it home it has a much stronger case on misconduct than before.

44. I do not think Ms Dias will be much worse off in finding evidence to defend the case against her, than if theft had been averred two years ago. She would have had problems then in getting statements out of the other cabin crew (which she never tried to do anyway) or information out of the Indian customs. However, she will inevitably be somewhat worse off than she would have been two years ago when it comes to finding evidence, simply because of the further delay; and she will certainly be worse off in that the case of misconduct will, if theft is proved, be that much stronger.

45. The lack of any real explanation for why Cathay, having elected not to rely on theft either at the outset, when it was apparently not relying on misconduct at all, or when it first amended its Defence, should want to bring it in now is also a relevant factor. Mr McLeish says that it is necessary to bring the pleadings into line with the evidence. It is right that Mr Tsang’s evidence deals with theft, albeit as hearsay. It is also true that Ms Dias has known all along that Cathay was saying that she had stolen its champagne. But another possible explanation is that Cathay has taken a hard look at its case on serious misconduct and decided that it needs some fortification. That may be so. Nevertheless Cathay has up to now, to use the words of Harman J in Cellular Clothing, announced to the world and the plaintiff that the only particulars of misconduct on which it was going to rely did not include theft. It has not explained why, two years after it first pleaded misconduct on one basis, it wants to plead the misconduct on a more serious basis which was well known to it at the time.

46. I realise that it will be difficult, if not impossible, to exclude evidence tending to show that Ms Dias stole the champagne. However, if theft is not pleaded, it cannot be relied on as misconduct and the trial judge will not be required to make a finding as to whether theft was committed.

47. It seems to me that in the circumstances the disputed amendments cannot be made without injustice to Ms Dias. Accordingly, I will refuse the disputed amendments.

The statement of Ms Tang

48. Mr Carolan says that that this should be excluded because absent a pleaded allegation of theft, none of her proposed statement would be relevant, and thereby admissible. Mr McLeish says that it goes far beyond theft.

49. The statement contains some not very helpful evidence of what happened at the Indian customs. Ms Tang says she heard the officer shouting at Ms Dias about having done two things she was not supposed to do; but that is as far as it goes. This goes to the averments of misconduct relating to the customs declaration. Then we have evidence about the finding of the Krug champagne in a Cathay shopping bag, inside Ms Dias’ luggage and a telephone conversation. This goes to theft. After that she says that on the flight to Hong Kong, Ms Dias continually pestered her not to report the theft; so that goes to theft. There is also some hearsay of what Ms Lakdawalla and Captain Beselt said, but again the thrust of this is that it concerned attempts by Ms Dias to avoid being reported for theft. Finally there is evidence of an earlier incident which goes to rebutting what Ms Dias says about a false allegation motivated by a grudge.

50. Ms Tang wishes to confirm and adopt her earlier reports but again, these go primarily to theft; there is only a minor mention of what the customs officer said.

51. As I have indicated, it will be difficult, if not impossible, to exclude evidence of theft. But this statement is primarily about theft and the evidence will be irrelevant in the absence of the pleading of theft. One must start somewhere. It therefore seems to me that leave to file the statement must be refused.

Disposition

52. I will, therefore, order that Cathay have leave to amend the Amended Defence in the manner as set forth in green ink in the copy attached to the Summons, subject to the following amendments to the Particulars in paragraph 14G thereof :

(1) sub-paragraph (d)(ii) be deleted;

(2) sub-paragraphs (d)(iv), (v) and (vi) be amended by deleting “subparagraphs (d)(ii) and/or (d)(iii)” where they appear and substituting therefor “sub-paragraph (d)(iii)”;

(3) In sub-paragraph (d)(vi) :

Item A be amended by deleting “as referred to in sub-paragraph (d)(ii) above”;

Item B be deleted entirely;

Item C be amended by deleting “taking anything from the Defendant’s aircraft without authority or”.

53. I dismiss paragraph 2 of the Summons and allow paragraph 3 with the necessary amendment to remove the reference to the excluded witness statement.

54. As to costs, counsel have asked to be heard in the event that I rule in the plaintiff’s favour, as I have done. I accordingly reserve costs to a further hearing on a date to be fixed.

(G.P. Muttrie)
Deputy High Court Judge

Mr Paul Carolan, instructed by Messrs Oldham, Li & Nie, for the Plaintiff

Mr Mcleish, instructed by Messrs Johnson, Stokes & Master, for the Defendant

DIAS SANDRA MARY ELIZABETH v. CATHAY PACIFIC AIRWAYS LTD

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