WOO KWOK PING v. THE INCORPORATED MANAGEMENT COMMITTEE OF TSUEN WAN TRADE ASSOCIATION PRIMARY SCHOOL

HCA 1523/2013

[2020] HKCFI 688

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1523 OF 2013

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DECISION ON COSTS

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1.  By a decision dated 14 January 2020 (“the Decision”), I held that this court had jurisdiction over the claim. The appeal against the Master’s costs order was set aside. On a nisi basis I held that costs of the Striking-Out Application including the hearing before Master Yip be borne by the Defendant (IMC), summarily assessed at $120,000; costs of the appeal and the jurisdiction issue were summarily assessed at $65,000 to be borne by IMC.

2.  This is IMC’s application to vary the costs order nisi to one of no order as to costs.  The abbreviations in the Decision will be adopted here.

Legal principles

3.  In general, for interlocutory applications, the court may order costs to follow the event: Order 62, rule 3(2A), RHC.

4.  To begin with, the successful party (Plaintiff) is assisted by the rule of costs to follow the event.  The unsuccessful party (IMC) bears the evidential burden to show that some other order for costs is appropriate.  In the absence of evidence or convincing argument to the contrary, the successful party would also have discharged the legal burden.  Costs to follow the event would be the appropriate order to make. If the unsuccessful party succeeds in discharging the evidential burden, the legal burden will rest on the successful party to show that she is entitled to the costs order which she seeks.  In reality, having heard the interlocutory application, it would be quite obvious to the court what costs order would best serve the justice between the parties without relying on the burden of proof: Melvin Waxman v Li Fei Yu [2013] 6 HKC 424, §20, To J.

5.  The court is entitled to take into account all the circumstances of the case, including the parties’ conduct and the underlying objectives: Melvin Waxman, Hong Kong Civil Procedure 2020, Vol 1, §62/0/2.

Application of the legal principles

6.  I have read the written submissions on both sides and will not set out the arguments in detail here.  Suffice to say that, as pointed out by Mr Li SC and Mr Miao, counsel for IMC, the Strike-out Summons has taken an unfortunately tortuous route.  Neither party considered there to be a jurisdiction issue whereas Masters on their own volition looked at the substance of the claim to raise that issue.

7.  I will consider each party’s conduct respectively.

IMC’s conduct

8.  IMC did not actively seek to litigate the striking-out because:

(1)     At the 2^nd CMC, IMC had drawn to Master Ho’s attention that the Plaintiff was seeking reliefs of injunction and declaration.  Master Ho nonetheless directed the parties to argue the jurisdiction issue.  Master Ho further commented that, given that IMC had not voluntarily taken out a striking out application, IMC might not be entitled to recover costs for steps incurred hitherto in this case.

(2)     The Strike-out Summons was taken out only afterwards, to properly frame the issue for argument and for IMC to protect its own costs position.

Ms Wong, counsel for the Plaintiff, submits that it remains IMC’s own decision to take out the Strike-out Summons and so it has to bear the consequences when the striking-out fails.  It cannot shift the blame to the Master.  I am unable to agree.  The parties were obliged to argue the issue.  The Strike-out Summons was in the simplest of terms.  It would not have caused the Plaintiff to do more than she had to do in compliance with the Master’s direction to argue the jurisdiction issue.

(3)     Soon after it was served with the re-amended statement of claim (“rasoc”), IMC withdrew the Strike-out Summons.

(4)     In the Plaintiff’s appeal on costs before me, which depended on the view of the Court as to the jurisdiction issue, IMC properly informed this Court in its written submission that the claim in the rasoc might well fall within the Court’s jurisdiction: §§4(3) and 48 of IMC’s skeleton submission dated 26 November 2019.

9.  This was a case where IMC constantly reviewed its position and acted properly to address concerns of the Master.  It turned out that what IMC drew to Master Ho’s attention was accepted by this Court on the jurisdiction issue.

10.  Ms Wong submits that IMC could have taken a neutral stance.  With respect, IMC’s stance was more than reasonable in not resisting the rasoc and not wasting Master Yip’s time on a hearing based on the amended statement of claim (“asoc”).  Although IMC did not state that it was neutral, having disclosed the view that it might not be plain and obvious for striking-out, IMC should not be blamed for arguing the jurisdiction issue before me in compliance with the letter and spirit of Master Ho’s direction.

The Plaintiff’s conduct

11.  The Plaintiff had no reason to delay her preparation of the rasoc because:

(1)     She specifically represented to Master Ho that her claim fell within the jurisdiction of the High Court. 

(2)     The April Hearing was fixed for the Plaintiff to resist the Strike-out Summons on its asoc.

(3)     There had been no indication of re-amendment until after IMC has filed its skeleton submission for the April Hearing. 

(4)     There was no explanation at all for her substantial delay in seeking re-amendments.

(5)     It was the Plaintiff’s substantial delay which caused IMC to waste all the preparation work in relation to the Strike-out Summons. She should in principle bear the wasted costs of the April hearing.

12.  However, the Plaintiff was equally innocent in the sense that she was obliged to litigate on the jurisdiction and it turned out that her counsel’s initial advice on jurisdiction was correct.

13.  Ms Wong submits that IMC should bear costs for 2 reasons:

14.  Firstly, that no additional costs were incurred because of the unsuccessful party’s involvement was not a reason to spare him costs: Chan Chi Shing v The Revising Officer Mr Simon Wong, HCAL 132/2010, 24 June 2011, §10, Au J (as he then was).  In that case, the 100^th Interested Party applied to vary the costs order nisi on the ground that no additional costs were incurred because of his involvement since the hearing of the application would have to proceed in any event.  Au J rejected such argument and held that the 100^th Interested Party should be fully conscious of the potential consequences of an adverse costs order against him if he fails in an adversarial system.  It reflected the notion that a successful party should be compensated for the costs incurred in successfully pursuing or defending a claim.

15.  With respect, that was a case where the 100^th Interested Party “hotly opposed” the judicial review (§9 of the Decision) despite the fact that he was not a respondent.  IMC stood in a different position as it was the only defendant but it was never its intention to take the jurisdiction issue but for the Masters’ direction to seek an affirmative ruling.

16.  Secondly, a party could have taken a neutral stance or even assisted the court on the law: Mok Charles Peter v Tam Wai Ho & ors, FACV 8 of 2010, 24 February 2011.  Instead IMC took on the opportunity to strike-out the claim and even instructed senior counsel to argue for striking-out.

17.  In Mok’s case, the Court commented that instead of adopting a neutral stance, R1 argued against the petitioner on a constitutionality issue. This was despite the presence of the Secretary for Justice as intervener.  That was distinguishable from IMC’s stance as set out in paragraph 8 above. 

18.  IMC was a necessary party and had to address the concerns of the Masters.  Despite the Decision, it could not be said that the Masters were unreasonable in raising the issue because the Plaintiff had indicated to Chung J when she sought the injunction that she did not intend to seek reinstatement. Inclusion of her prayer for injunction squarely raised the issue of utility of the injunction and hence whether the claim should have been within the jurisdiction of the Tribunal in the first place.

Conclusion on the liability for costs

19.  Neither party was at fault in trying to address the concerns of the Masters.  It would be unfair to make no order as to costs. I am satisfied that the order nisi should be varied such that costs below should be costs in the cause of the action. 

20.  Should that be the order of the Master, the appeal on costs would have been spared but the jurisdiction issue would still have to be argued.  For the reasons given above, costs of the appeal should likewise be costs in the cause of the action.

Quantum on costs

21.  It is not necessary for me to decide the quantum now because costs would be taxed after trial if not agreed.  However, IMC takes issue with costs claimed by the Plaintiff.  I need to set the record straight to enable the taxing master to come to a fair decision on quantum. 

22.  At §38 of her skeleton submission on costs dated 19 July 2019 presented to Master Yip for the July hearing, Ms Wong represented that the Plaintiff was a retired principal with no income.  The Plaintiff’s counsel was acting on pro bono basis in the April hearing due to the Plaintiff’s impecuniosity.  The purpose of the representation was to ask the Court not to order her to pay costs forthwith.

23.  Upon being challenged by IMC in the present application to vary the order nisi, Ms Wong now informs the Court in §27 of her submission that in fact there had been 2 counsel who represented the Plaintiff at the April hearing.  It was Mr Erik Shum who acted on pro bono basis but not herself.  She has produced her brief for attendance at the April hearing to show that she was validly briefed.

24.  In my view, it was wholly improper to represent to the court that counsel was acting on pro bono basis to seek indulgence of the court and yet seek counsel’s fees when there was an order (though nisi) for costs in favour of the Plaintiff.  There was no explanation why Ms Wong overlooked (to say the least) her own fees for the April hearing.

25.  In any case, there was no order for certificates for 2 counsel before the Master.  Given the value of the claim and counterclaim, I only grant certificate for one counsel at both levels.  In the case of IMC, it would be one hypothetical junior counsel.

26.  Accordingly, in respect of counsel’s fees of the Plaintiff:

(1)     For the April hearing, based on Ms Wong’s representation in her written submission, the costs upon taxation shall not include counsel fees; and

(2)     For the July hearing, only $10,000 was charged by counsel to argue on costs.  I see no reason for reducing that.

27.  In respect of solicitors’ costs, given the impecuniosity of the Plaintiff, I doubt if she had ever agreed to pay her solicitors as much as $129,547.33 as stated in the costs statement for the April and July hearings.

28.  I therefore set aside the summarily assessed sum of $120,000. 

29.  For the hearing before me, I would only give certificate for one counsel as, without disrespect, I do not see any justification for engaging senior counsel to make a re-run of the arguments below when the value of the claim was not high:

(1)     For the Plaintiff, since Ms Wong has only charged the Plaintiff $30,000 (admittedly a charitable rate) for the April hearing, I see no justification for charging more than double for re-running the arguments (although with the rasoc) before me.  Again, I doubt if the impecunious Plaintiff had agreed to pay her solicitors $77,968 as stated in the costs statement dated 3 January 2020.

(2)     For IMC, it would be the costs of one hypothetical junior counsel.

I therefore also set aside the summary assessment of $65,000 for the appeal and jurisdiction issue heard before me.

30.  IMC is successful in varying the costs order nisi.  But for the impropriety of the Plaintiff as set out in paragraph 24 above, I would also have ordered costs in the cause.  I order instead that IMC’s costs of this variation application (with certificate for one junior counsel only) shall be in the cause.

31.  There will be legal aid taxation of the Plaintiff’s own costs for the period after 14 November 2019 (date of notice of commencement of legal aid certificate).

32.  I thank counsel for their assistance.

Written Submission of Ms Linda Wong, instructed by Ho Tse Wai & Partners, assigned by the Director of Legal Aid, for the plaintiff

Written Submission of Mr Laurence Li SC and Mr Harrison Miao, instructed by Zhong Lun Law Firm, for the defendant

HCA 1523/2013

[2020] HKCFI 186

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1523 OF 2013

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D E C I S I O N

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A. INTRODUCTION

1.  The Defendant (“IMC”) ran and still runs the subject aided primary school (“the School”) which received subvention from the government.  The Plaintiff was employed as a principal of the School until her dismissal.

2.  For about a year, IMC had issued reminders and warnings to the Plaintiff for misconduct until she was summarily dismissed on 27 July 2013.  But for the termination, the Plaintiff would have been due for retirement about a year later, ie on 31 August 2014.

3.  The Plaintiff took the view that IMC had failed to follow the statutory procedure for termination of a principal.  On 20 August 2013, the Plaintiff commenced this action. 

4.  The jurisdiction issue was first raised by a Master at the 1^st case management conference (“CMC”) on 3 October 2018.

5.  On 29 March 2019, IMC issued a striking-out application against the amended statement of claim for want of jurisdiction (“the Striking-Out Application”). One working day before the hearing, the Plaintiff sought leave to re-amend her statement of claim.  IMC withdrew the Striking-Out Application after considering the re-amendments.

6.  Master SP Yip awarded costs to IMC, summarily assessed at $172,000 to be paid to IMC forthwith, on the basis that the Striking-Out Application would have succeeded but was only withdrawn due to the late amendment (“the Costs Order”).

7.  At the 3^rd CMC on 29 July 2019, Master Ho disagreed with the outcome of the Striking-Out Application, and directed the parties to argue on the jurisdiction issue before the listing judge.

8.  On 5 August 2019, the Plaintiff issued a notice of appeal against the Costs Order.

9.  There are thus 2 matters before me:

(1) Whether this claim falls within the exclusive jurisdiction of the Labour Tribunal (“the jurisdiction issue”); and

(2) The Plaintiff’s appeal against the Costs Order.

B.     BACKGROUND FACTS

10.  The Plaintiff’s employment as a principal was pursuant to an employment contract (“the Contract”), which incorporated by reference the Education Ordinance (Cap 279) and its subsidiary regulations, 2 Codes and a Guide.

11.  On 20 August 2013, the Plaintiff commenced the present action for wrongful dismissal. The endorsement of claim was confined to the following causes:

(1) That IMC failed to comply with sections 55-57 of the Education Ordinance by dismissing her before the Permanent Secretary for Education (“the Permanent Secretary”) had withdrawn approval of the Plaintiff or given approval for another principal.  This amounted to breach of the Contract.

(2) That the Plaintiff’s misconduct did not satisfy the requisite standard of seriousness to warrant dismissal under the 2 Codes. IMC had also failed to follow the procedures prescribed under the 2 Codes in dismissing the Plaintiff.  These amounted to breaches of the Contract which incorporated the 2 Codes and breach of statutory duty.

(3) That the Plaintiff’s misconduct did not satisfy any of the grounds for dismissal under section 9 of the Employment Ordinance, Cap 57.  This amounted to breach of the Employment Ordinance.

12.  The Plaintiff prayed for:

(1) a declaration that the summary dismissal was unlawful and wrongful and of no effect (“1^st prayer”);

(2) an injunction to restrain IMC from purporting to dismiss her from the post of principal without having obtained the approval from the Permanent Secretary or from acting upon such dismissal (“2^nd prayer”);

(3) an injunction to compel IMC to exhaust the procedure under the 2 Codes before any purported action against the Plaintiff (“3^rd prayer”); and

(4) damages to be assessed including loss of salary and provident fund (“4^th prayer”).

13.  In the re-amended statement of claim dated 22 July 2019, the Plaintiff further labelled and pleaded her claims under sections 55-57 of the Education Ordinance as breach of statutory duty and breach of common duty of care.

14.  In the meantime, by an order dated 3 October 2013, Chung J granted an injunction to restrain IMC from acting on the dismissal before the Permanent Secretary had withdrawn his approval of the Plaintiff or approved another principal for the School.

15.  Subsequently, on 16 October 2013 and 28 January 2014 respectively, the Permanent Secretary approved 2 persons as acting principals.  On 29 December 2014, the Permanent Secretary also confirmed the appointment of one of them as principal.

16.  Accordingly, the injunctions sought under the 2^nd and 3^rd prayers had become otiose.  The entire claim is now monetary in nature.

C.     LEGAL PRINCIPLES GOVERNING JURISDICTION OF THE LABOUR TRIBUNAL

17.  The Labour Tribunal has exclusive jurisdiction over a claimfor a sum of money, whether liquidated or unliquidated arising from, amongst others, (a) the breach of a term of a contract of employment, and (b) the failure to comply with the provisions of the Employment Ordinance.

18.  Notwithstanding that, any claim 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 falls outside the Labour Tribunal’s jurisdiction: Labour Tribunal Ordinance, Cap 25 (“LTO”) sections 7(1)-(2); §§1 and 3 to the Schedule.

19.  In deciding the jurisdiction issue, the Court should look at both the pleaded causes of action and reliefs sought.

20.  Mixed claims founded both in employment contracts and torts are excluded from the Labour Tribunal: Uferahal Limited & anor v Hansen Larry Douglas [2015] 2 HKLRD 683 at §20, Au-Yeung J.

21.  Similarly, a mixed claim for monetary and non-monetary reliefs, even though based on breach of contract or of the Employment Ordinance, fall outside the jurisdiction of the Labour Tribunal: Gain Hill (Hong Kong) Ltd v Li Kin Yip [2006] 4 HKLRD 186, §§27-28, Sakhrani J.

22.  The proper approach of the Court is to look at the substance of the dispute and not the labels put on the pleadings.  The Court should assess whether the other claims brought by the plaintiff are merely for “window dressing”, such that the real claim left is one that falls within the Labour Tribunal’s exclusive jurisdiction: Ho Chee Sing James v Secretary for Justice [2015] 4 HKLRD 311, §§32-34, DHCJ Saunders.

23.  A distinction should be drawn between jurisdiction and forum for trial. Whether a claim falls within the jurisdiction of the Labour Tribunal is determined at the time the claim is filed.  On the other hand, the forum for trial is determined at the time the issues are crystallized or when there are changes in circumstances after filing of the writ.

D.    THE JURISDICTION ISSUE

D1.  Pleaded causes

24.  The writ relies on breach of employment contract (which of necessity includes breach of the Employment Ordinance and all breaches of the statutes incorporated into the Contract).

25.  However, an indispensable part of the Plaintiff’s case (which would increase the damages recoverable) turns on the applicability of sections 55-57 of the Education Ordinance.  Section 55 provides that principal of a school shall hold office until (of relevance) the Permanent Secretary withdraws his approval of the principal under section 56 or approves another teacher of the school as the principal under section 57(2).

26.  Section 56 provides that the Permanent Secretary may withdraw his approval of the principal of a school if it appears to the Permanent Secretary that the principal—

“(a) is no longer a fit and proper person to be the principal;

(aa) in the case of a school providing nursery or kindergarten education, is not appropriately qualified to be the principal;

(b) is not performing the duties of the principal satisfactorily;

(c) has ceased to perform the duties of the principal; or

(d) is no longer acceptable as such to the majority of the managers of the school.”

27.  Section 57 provides for approval of subsequent principals as follows:

“(1) If in the case of any school—

(a) the Permanent Secretary refuses under section 54 to approve a teacher who has been recommended to be the principal;

(b) the principal ceased under section 55 to hold office;

(c) the principal ceases to perform the duties of the principal; or

(d) the principal is no longer acceptable as such to the majority of the managers of the school,

the management committee or incorporated management committee (as may be appropriate) of the school shall within 1 month recommend for the approval of the Permanent Secretary another teacher of the school to be the principal.

(2) Subject to section 54, the Permanent Secretary shall approve as the principal of the school the teacher who is recommended under subsection (1).”

28.  The effect of these sections are that as long as a principal does not lose his or her approval, he or she is entitled to hold office until the Permanent Secretary decides otherwise. The incorporated management committee of any school simply does not have the independent power to remove a principal from office. Furthermore, the Permanent Secretary can only withdraw his or her approval for the principal on the limited grounds in section 56. 

29.  These arguments are plainly open to the Plaintiff.  Her cause of action is in breach of duty under an enactment, which is a tort claim.  Applying §3 to the Schedule to the LTO, this is a mixed claim excluded from the Labour Tribunal at the time the writ was filed (and even now on the state of the latest amendments to the statement of claim).

D2.  Reliefs sought

30.  The 1^st prayer seeks a declaration which is not really a relief but a finding of fact that the Court would have to make after trial.

31.  Ms Linda Wong, counsel for the Plaintiff, submits that the use of the word “unlawful” to describe the dismissal meant that IMC had failed to follow the statutory procedure for termination of the employment of a school principal. 

32.  With respect, all dismissals in breach of contract, in breach of the Employment Ordinance or other relevant statutes are unlawful.  Accordingly use of the word “unlawful” does not give the 1^st prayer the character of a relief that it never possesses.

33.  The 2^nd and 3^rd prayers seek injunctions.  At least 2 statutory reliefs were open to the Plaintiff upon failure to following the termination procedure under sections 55-57 of the Education Ordinance.  One was reinstatement of her position as principal under section 32N of the Employment Ordinance, with all the rights and responsibilities attached to that position until her expected retirement date or when the Permanent Secretary withdrew the approval of the Plaintiff.

34.  The other relief was, of course, damages, which is covered by the 4^th prayer. Whether one calls it a statutory claim or contract claim, the damages that the Plaintiff is likely to recover should be the same.

35.  The Labour Tribunal can grant reinstatement as a final relief but, unlike the High Court and District Court, it has no power to grant interim relief or injunctions: Gain Hill.

36.  It was thus clear that by virtue of at least the 2^nd and 3^rd prayers, this was a mixed claim for monetary and non-monetary reliefs at the time the writ was filed.

37.  The Plaintiff did obtain an interim injunction from Chung J along the lines of the 2^nd but not the 3^rd prayer.  Chung J considered that the Plaintiff did not have a frivolous or vexatious claim.  The rationale for his order was that damages would not be an adequate remedy for the deprivation of security of tenure afforded by section 55.  See §5 of his Reasons for Decision dated 16 October 2013.  This decision plainly showed that the 2^nd prayer was not window dressing.

38.  I hold that the Labour Tribunal did not have jurisdiction over this case. The Plaintiff’s confirmation (post-writ) to Chung J that she was not seeking reinstatement and the injunction was not intended to have that effect did not undermine the jurisdiction of the Court. Nor did the fact that the prayers for injunction became spent 4 months after the writ.

39.  Counsel have submitted other points but, in my view, the above analyses are sufficient to dispose of the jurisdiction issue in favour of the Plaintiff.

E.     THE APPEAL ON COSTS

40.  On an appeal against an order for costs made by a Master, the Judge will only allow the appeal where the Master has erred in law: Hong Kong Civil Procedure 2020, Vol 1, §58/1/6; but not where the decision involved the Master’s exercise of discretion.

41.  In this case, the Court of First Instance has had jurisdiction right from the day the writ was filed.  Contrary to Master SP Yip’s reasoning, IMC would have lost on the Striking-Out Application even without the re-amendments. Thus IMC should bear the costs of the Striking-Out Application before the Master. 

42.  As for the costs of this hearing, Mr Laurence Li SC rightly points out that the parties are here to comply with the directions of Master Ho when the parties have in fact resolved between themselves that there was no longer a jurisdiction issue.  However, the jurisdiction issue was inseparable from the appeal itself.  I hold that the costs of both matters should be to the Plaintiff. 

F.     THE WAY FORWARD FOR TRIAL

43.  Counsel for both parties confirm that the case is ready for trial. I have raised issue as to whether this case should be transferred away.

44.  By now, the only relief in the claim and counterclaim is monetary.  The estimated damages of each party is about HK$1,000,000.  The resultant payment under the Mandatory Provident Fund of about HK$2,000,000 to the Plaintiff if she succeeds at the trial is not an issue in this case.  There are multi-factual issues and novel points of law under the Education Ordinance that justify legal representation.

45.  Unless the parties can show cause otherwise, this case should be transferred to the District Court. 

46.  I wish to add 2 points.  Firstly, the core issues turn on breaches of contract and of the Education Ordinance.  Counsel should carefully consider if the additional cause of breach of common duty of care would bring any additional benefit to the Plaintiff.

47.  Secondly, it was shocking to learn that IMC had presented a costs statement for about $400,000 before Master Yip for the Striking-Out Application, although the Master only awarded $172,000.  Such costs claimed were entirely disproportionate to a procedural matter and much too heavy for either party.  In addition, the jurisdiction issue has taken a year to resolve.

48.  Where there is an issue on jurisdiction in the existing Court of First Instance (or District Court) action, if the claim/counterclaim is within limitation period and the factual matrix or legal issues justify trying in a court, the claimant or counterclaimant (as the case may be) should consider seeking a stay of proceedings of the court for a few weeks in order to launch a claim at the Labour Tribunal.  A concise and joint statement of the parties can be submitted to the Tribunal informing the Tribunal of the existing court case and seek transfer (if appropriate) of the claim or counterclaim to the court.

49.  If the Labour Tribunal takes up the claim, the claim or counterclaim in the court can be dismissed.  On the other hand, if the Labour Tribunal transfers the case, the stay of the existing action can be uplifted.  The transferred case can simply adopt the pleadings and other documents filed in the existing action; or, as a matter of case management, be tried together or consolidated with the existing claim in the court.

50.  Filing a claim at the Labour Tribunal would cost $50 for a claim of over $10,000 and the joint letter would cost a few thousand dollars.  The costs involved would be much less than going through striking out proceedings as in the present case.  Any costs arising out of the stay may be disposed of summarily or reserved to the trial judge.

G.    SUMMARY ASSESSMENT OF COSTS

51.  Costs before the Masters are summarily assessed and allowed at $120,000.  The arguments of the jurisdiction issue and appeal are but a re-run of those below.  I therefore assess those costs to be $65,000.  Both sets of costs are to be borne by the Defendant.

H.    CONCLUSION

52.  At the time the writ was filed, both the causes of action and reliefs sought show that this was a mixed claim for monetary and non-monetary reliefs. The Court, as opposed to the Labour Tribunal, had jurisdiction.  The Master had erred in principle and the Costs Order should be set aside. 

53.  The parties have no dispute over the directions to be made.  I therefore order as follows:

(1) With regard to the jurisdiction issue, the Court has jurisdiction over this claim;

(2) With regard to the appeal, the Costs Order be set aside. 

(3) On a nisi basis,

(a) costs of the Striking-Out Application including the hearing before Master Yip shall be borne by the Defendant; summarily assessed at $120,000;

(b) costs of the appeal and the jurisdiction issue are summarily assessed at $65,000, to be borne by the Defendant;

(4) Unless the parties can show cause in writing within 14 days, this case shall be transferred to the District Court for trial; this issue shall be disposed of by Au-Yeung J on the papers;

(5) There be leave to set down this action within 42 days from resolution of item (4) for trial before a single judge, with 10 days reserved;

(6) There be a pre-trial review at least 12 weeks before trial;

(7) The Plaintiff do lodge and serve the paginated trial bundles not later than 56 days before trial; each set of bundle marked A, B, C, etc shall start with page 1; a composite index for all bundles shall be placed in bundle A, whilst each of bundle B, C, etc shall have its own bundle index;

(8) The Plaintiff do lodge and serve her opening submission (with soft copies), authorities and a list of agreed issues, 14 days before trial;

(9) The parties shall be bound by the list of agreed issues;

(10) The Defendant do lodge and serve its opening submission (with soft copies) and authorities 7 days before trial;

(11) There be double-sided printing for all bundles, submissions and authorities;

(12) There be liberty to apply; and

(13) Regardless of the forum for trial, the directions in paragraphs (5) to (12) shall apply.

54.  I thank counsel for their assistance.

HCA 1523/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1523 OF 2013

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REASONS FOR DECISION

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Introduction

1.  This is the plaintiff’s application for an interlocutory injunction.  At the end of the inter partes hearing, I granted an injunction in the terms described in more details below.  The following are the reasons for the decision.

Background

2.  Since about 1986, the plaintiff has been teaching at the school managed by the defendant (but only since its incorporation in 2007) (“the defendant’s school”).  She became the principal of the defendant’s school in 2009. But for the incident in July 2013 (see below), the plaintiff would be due for retirement on 31 August 2014 (a period of about 11 months between the hearing and that date).

3.  During the period from August 2012 to 27 July 2013 (a period of just short of one year), quite a number of reminders/warnings were given by the defendant to the plaintiff.  In fact, on 27 July 2013, after sending 3 warning letters to the plaintiff, the defendant summarily dismissed her on the same day (although the dismissal letter has been included in the hearing bundles, no particular reference was made to its contents) (“the 27 Jul dismissal”).

4.  Feeling aggrieved, the plaintiff commenced this action in August 2013, and took out an inter partes summons at the same time seeking interlocutory injunctive relief (see below for details) (“the said summons”).

The relief sought

5.  By the time of the hearing of the said summons, the principal relief sought was to enjoin the defendant from acting upon the 27 Jul dismissal (described as the purported summary dismissal in the said summons) before the Permanent Secretary for Education (“the PS”) has withdrawn her approval (or has approved another principal) in accordance with s 55, Education Ordinance (Cap 279), its related regulations and/or the Code of Aid for Aided Schools (“the Code”).

6.  The reason why the relief was so worded will become apparent in the paragraphs below.

Issues raised in this application

7.  At least for the purpose of this application, the following are undisputed:

(a) the plaintiff was the principal of the defendant’s school immediately before the termination of her employment;

(b) the employment contract has its root in a written document dated 19 May 2007 (“the 2007 contract”).

Among the terms of the 2007 contract were:

(1) the terms set out therein could not contravene Cap 279 or its related regulations, the Code or the instructions given from time to time by the Secretary for Education/the PS (“Other Terms”);

(2) the plaintiff’s appointment date had to be confirmed according to the requirements of the Code (“Other Terms (1)”);

(3) the other terms had to accord with Cap 279 and the Employment Ordinance (Cap 57) (“Other Terms (2)”).

The parties also agreed that the Code formed part of the employment contract.

8.  As can be expected, one of the main disputes between the parties is whether the summary dismissal was justifiable (as the defendant contends) or wrongful (as the plaintiff contends).  Despite the parties’ respective contention that the merits of their own case overwhelm those of the other party, I do not consider that such a dispute can properly be determined in the context of this application.  To do so would entail, so far as the facts are concerned, an examination of the witnesses’ credibility, in the light of the numerous contemporaneous documents spanning over a period of about one year (August 2012 to July 2013).

9.  Further to the above, the plaintiff also contends that the defendant has not acted in accordance with s 55, Cap 279.  As will be explained below, this contention is relevant to the following issues:

(a) a serious question to be tried: Hong Kong Civil Procedure 2013, Vol 1, para 29/1/9 to 29/1/10 (citing American Cyanamid Co v Ethicon Ltd [1975] AC 396);

(b) adequacy of damages as a remedy;

(c) balance of convenience, or “balance of the risk of doing an injustice”: Hong Kong Civil Procedure 2013, Vol 1, para 29/1/13 (citing, among others, Music Advance Ltd v The Incorporated Owners of Argyle Centre Phase I [2010] 2 HKLRD 1041).

10.  As regards the merits of the plaintiff’s claim, in view of the matters set out in para 8 and 9 above and para 11 below, this is clearly not a frivolous or vexatious claim; in other words, the claim involves a serious question which needs to be tried.

11.  This is even more so when s 55, Cap 279 is also taken into account.  It provides that:

“The principal of a school shall hold office until—

(a) he ceases to be registered as a teacher, or to be permitted to teach as a permitted teacher in the school;

(b) he resigns;

(c) the Permanent Secretary withdraws his approval of the principal under section 56; or (Amended 3 of 2003 s.11)

(d) the Permanent Secretary approves another teacher of the school as the principal under section 57(2) (Amended 3 of 2003 s.11)” (emphasis supplied).

Because this application does not involve a cessation of registration or resignation, only paragraphs (c) and (d) of s 55 can be of relevance here.

12.  As stated above, the defendant does not dispute the applicable provisions of Cap 279 formed part of the plaintiff’s employment contract.  It also does not dispute:

(1) the need for the PS to act in accordance with s 55, Cap 279 before the plaintiff’s office as principal could be brought to an end lawfully;

(2) the PS has not so acted (nor has the defendant requested the PS to do so).

13.  In the context of this application, the issues set out in para 9(b) and (c) above are related.  Here the plaintiff relies on several English authorities:

(a) Robb v London Borough of Hammersmith & Fulham [1991] IRLR 72;

(b) Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust [2006] IRLR 100.

These cases have been summed up in Chitty on Contracts (2012) 31^st Ed:

“… An injunction to restrain dismissal can also be issued in respect of a period during which no services are to be rendered under the contract. Thus where an employee had been suspended on full pay while disciplinary proceedings against him were in progress, it was held that the employers could be restrained from dismissing him before the disciplinary proceedings had run their full course; and they could, a fortiori, be so restrained if they had purported to dismiss the employee without any recourse to the disciplinary procedure which governed the employment relationship” (para 27-023, text to nn 123 and 124).

14.  At the risk of over-simplifying the matter, both of the above authorities involved dismissals where the contract provided for a relative elaborate disciplinary procedure (such as the setting up of an independent investigating committee (the Robb decision), or an investigating panel (the Hinchingbrooke decision)).  One of the reasons for granting the injunction was to ensure the employee’s entitlement to such procedure.  Thus, the court said in the Robb decision:

“Although damages would be an adequate remedy for the defendant’s breach of contract in summarily dismissing the plaintiff and he would be entitled to damages representing not only loss of salary during the three-month notice and a time extended for the probable length of the [disciplinary] procedure to completion, damages would not be an adequate remedy for the manner of his unlawful dismissal and his deprivation of the [disciplinary]procedure” (emphasis supplied).

15.  No formal disciplinary procedure has been laid down in the present employment contract.  However, I agree with the plaintiff that, in view of s 55, Cap 279, it is appropriate to grant an injunction because, similar to the observation in the Robb decision, damages would not be an adequate remedy for the deprivation of the security of tenure apparently afforded by that provision.

16.  In so concluding, I have taken into account the following:

(1) the plaintiff expressly accepted she was not seeking reinstatement of her post (and the injunction is not intended to have that effect);

(2) the defendant has not informed the PS of the plaintiff’s summary dismissal (nor has it ascertained from the PS whether the PS would act in accordance with s 55, Cap 279);

(3) the defendant has not given an undertaking not to act upon the summary dismissal before the PS has acted in accordance with s 55, Cap 279;

(4) if an injunction order in the terms sought by the plaintiff is granted, it is unlikely substantial difficulties would be caused to the defendant regarding the daily administration and affairs of the defendant’s school.  For example, the plaintiff does not object to, and the defendant can (if necessary), appoint an acting principal in the meantime (the plaintiff herself has been an acting principal from 2007 to 2009).

Terms of the injunction

17.  It was for the above purpose that an injunction order was made in the following terms:

“An injunction until:

(1) judgment in the action;

(2) the Permanent Secretary for Education has acted in accordance with s 55 – s 57 of the Education Ordinance, Cap. 279;

(3) further order,

(whichever is the earliest) to restrain the Defendant, their servants or agents or otherwise from acting upon the purported dismissal of 27th July 2013 of the Plaintiff from the post of Principal before the Permanent Secretary for Education has withdrawn her approval (or has approved another Principal) in accordance with s.55 – s.57 of the Education Ordinance, Cap. 279”.

The order expressly states that neither the PS nor the defendant is restrained from otherwise acting in accordance with Cap 279 and/or the Code.

Other matters

18.  The parties’ closing submissions also mentioned various other points.  These have not been expressly set out or dealt with in the above headings and sub-headings.  This is so only because of the need to balance between the length of the reasons for decision and its comprehension. It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.