{
  "Date": "22 Nov, 2005",
  "Action No.": "DCCJ1586/2003",
  "Neutral Cit.": "[2005] HKDC 216",
  "case_title": "FONG CHI YUNG T/A LONG FAI BUS CO V. CHEUNG HOI YING",
  "page_title": "FONG CHI YUNG T/A LONG FAI BUS CO V. CHEUNG HOI YING | [2005] HKDC 216 | HKLII",
  "case_history": [
    {
      "name": "DCCJ1586/2003",
      "link": "https://www.hklii.hk/en/appealhistory/DCCJ/2003/1586"
    }
  ],
  "appeal_history": [],
  "case_url": "https://www.hklii.hk/en/cases/hkdc/2005/216",
  "neutral_cit": "[2005] HKDC 216",
  "court_code": "HKDC",
  "content": "DCCJ001586/2003 FONG CHI YUNG t/a LONG FAI BUS CO v. CHEUNG HOI YING\nDCCJ 1586/2003 & 2569/2003\n(Consolidated)\nIN THE DISTRICT COURT OF THE\nHONG KONG SPECIAL ADMINISTRATIVE REGION\nCIVIL ACTION NOS. 1409 OF 2003 AND 2569 OF 2003\n--------------------\nBETWEEN\nFONG CHI YUNG trading as\nLONG FAI BUS CO.\nPlaintiff\nand\nCHEUNG HOI YING\nDefendant\n--------------------\nCoram : Deputy District Judge J. Ko in Court\nDates of Hearing : 25\nth\n– 29\nth\nJuly 2005 & 10\nth\n– 11\nth\nAugust 2005\nDate of submission of Plaintiff’s written reply : 22\nnd\nAugust 2005\nDate of Handing Down Judgment : 22\nnd\nNovember 2005\nJ U D G M E N T\n1.\nThis case concerns with the termination of the employment relationship between the Plaintiff (“P”) as the employer and the Defendant (“D”) as the employee in September 2002.\n2.\nPrior to the first day of trial, it was P’s pleaded case that the employment relationship between of P and D had been terminated on 3\nrd\nJuly 2002 by mutual agreement and that D had, since 4\nth\nJuly 2002, been working for P as an independent contractor.  This has always been disputed by D (see Statement of Claim para.2 at Agreed Bundle p.1; Defence and Counterclaim para.5(4) at Agreed Bundle p.12; and Reply and Defence to Counterclaim para.4(6) at Agreed Bundle p.54).\n3.\nOn the first day of trial, Ms. Wong (counsel for P) informed the court that P would no longer take issue with the fact that the employment relationship between P and D had not been terminated in July 2002.  Leave was granted to P to amend her pleadings accordingly.\n4.\nAs a result of the above concession made by P, it is now common ground that D had been employed by P as a coach driver up to its termination in September 2002 (see Amended Statement of Claim para.2 at Agreed Bundle p.604).  How their employment relationship ended, however, is a matter in great dispute.\nOverview of the respective case of the parties\n5.\nIt is P’s case that D’s employment was terminated on 14\nth\nSeptember 2002 by mutual agreement.  However, D failed and refused to inform P the whereabouts of the coach then assigned to him bearing the registration no. KJ 4376 (“the Coach”) despite requests and demands after the date of termination (see Amended Statement of Claim para.7(1) at Agreed Bundle p.606).  In addition, D has also failed and refused to return to P the wireless transceiver installed on board the Coach (“the Transceiver”), the cover of the coolant reservoir, the cover of the lubricant chamber and the small engine cover of the Coach (“the 3 Covers”), as well as boarding tickets/coupons that D had collected from passengers (see Amended Statement of Claim para.7(3)-(4) at Agreed Bundle p.606).\n6.\nBy reason of the aforesaid, says P, D has breached the employment contract and committed the tort of conversion and P has suffered loss and damage as a result (see Amended Statement of Claim para.8-9 at Agreed Bundle pp.607-608).  Initially, P prayed for both an order for delivery up of the Transceiver and damages.  However, it has now become clear that the damages claimed by P includes the cost of replacement of the Transceiver.  In the end, P only asks for damages in the total sum of $124,570.\n7.\nD denies that his employment was terminated on 14\nth\nSeptember 2002 as alleged by P.  Instead, D says he was constructively dismissed on 16\nth\nSeptember 2002 when P withdrew the Coach and demanded the return of the keys to the Coach from him (see Defence and Counterclaim para.5(5) and 12 at Agreed Bundle pp.12-13 and 19-31).  D is counterclaiming against P in the total sum of $23,677.70 being wages in lieu of notice, annual leave pay and end of year payment.\n8.\nD denies that he has breached the employment contract or committed conversion.  It is D’s case that all along P knew where the Coach was parked.  He denies having taken the Transceiver.  He maintains that he had removed the 3 Covers from the Coach as a security measure to prevent the Coach from being stolen, which were handed to the police for P on 16\nth\nSeptember 2002.\nBackground\n9.\nDespite the vast difference between the parties, there is much common ground in the evidence.  Mr. Iu (solicitor for D) has helpfully summarized those facts which are not in dispute in his written closing submission.  They have been subjected to remarks made by Ms. Wong in her written reply.\n10.\nFor the purpose of this judgment, I have accepted the following facts to be common ground between the parties.  These facts provide the backbone for the ensuring discussion and their relevance will become apparent when one turns to the specific issues in dispute.\n11.\nP is the sole-proprietress of Long Fai Bus Company (“Long Fai”) and holds the title of deputy general manager of the company.  Mr. Man Tat Shing (“MAN”) is the general manager of Long Fai whereas Mr. Li Kwok Wing (“LI”) is Long Fai’s supervisor of coaches.\n12.\nLong Fai Bus Limited (“LF Limited”) was incorporated on 10\nth\nJune 2002.  MAN holds 99.99 % of the shareholding in LF Limited and P holds the remaining 0.01 % shareholding.  MAN and P are the only directors of LF Limited.\n13.\nAvonwin Holdings Tour Limited (“Avonwin”) was incorporated on 26\nth\nJune 2002.  MAN holds 98 % of the shareholding in Avonwin and P holds the remaining 2 % shareholding.  There are 4 directors of Avonwin including MAN and P.\n14.\nLong Fai, LF Limited and Avonwin share the same address as their offices.\n15.\nD’s employment contract was negotiated and agreed upon by MAN (for and on behalf of P or Long Fai) and D in November 2001.  P commenced working for Long Fai as a coach driver on 3\nrd\nDecember 2001.\n16.\nIn early January 2002, P purchased the Coach, which was then brand new, at $300,000 to $400,000.  The Coach has a seating capacity of 30 (including driver).   The Transceiver was installed on board the Coach for use by the driver for communication purposes.  The Transceiver had a detachable front panel cover (“the Panel”).  No anti-theft security measure was installed on the Coach.\n17.\nSoon after its purchase, the Coach was assigned to be driven exclusively by D.  D was given one set of keys to the Coach and a spare set was kept by Long Fai.\n18.\nGenerally, Long Fai’s coaches are parked at its designated car park in Hang Mei (坑尾) in Tin Shui Wai.  Shortly after the Coach was assigned to D, D obtained permission from P through MAN to park the Coach in the vicinity of D’s residence in Sung Ching San Tsuen (崇正新村) in Yuen Long.  At all material times, P (and MAN) knew where D resided.\n19.\nWhat happened between 6\nth\nand 16\nth\nSeptember 2002 is hotly contested.  Be that as it may, the following facts are not in dispute:\n(a)\nOn 6\nth\nSeptember 2002:\n(i)\nThere was a meeting at about 11 am, in San Yung Kee Restaurant between P, D and other Long Fai’s drivers including LI and Mr. Cheng Yee-yan.\n(ii)\nThere was another meeting at about 2 pm in Kar Shing Restaurant, which was attended by P, D, LI, Cheng Yee-yan and Mr. Yuen Kin Wing (“Yuen”). Yuen was also a driver of Long Fai.\n(b)\nOn 14\nth\nSeptember 2002 (Saturday), there was a meeting between P and D in Kar Shing Restaurant, which ended at about noon.\n(c)\nOn 16\nth\nSeptember 2002 (Monday):\n(i)\nIn the morning, D called MAN informing MAN that he was not well and asked for half day sick leave.\n(ii)\nAgain in the morning, MAN arranged the Coach, which was then parked at Yung Yuen Car Park (“YYCP”) in Yuen Long, to be towed away. The location of YYCP is about 15 minutes walking distance from D’s residence.\n(iii)\nIn the afternoon, MAN received the keys of the Coach from D at a police station.\n20.\nOn 4\nth\nNovember 2002, D filed a claim against P in the Labour Tribunal under LBTC 10532/2002 claiming for $12,000 being wages in lieu of notice, $5,600 being arrears of wages, $2,209.30 being annual leave pay, $9,468.40 being end of year pay and $220 being order fee, totaling $29,497.70 (see Form of Claim at Agreed Bundle pp.144-145).\n21.\nD, P and MAN gave evidence at the Labour Tribunal on 28\nth\nNovember 2002.\n22.\nOn 9\nth\nJanuary 2003, the Labour Tribunal made an Award in favour of D on P’s admission for $5,600 being arrears of wages and $220 being order fee, totaling $5,720.00, and adjourned D’s remaining claim for further consideration (see Award at Agreed Bundle p.186).\n23.\nOn 20\nth\nMarch 2003, P issued the Writ in this action against D.\n24.\nOn 23\nrd\nApril 2003, the Labour Tribunal ordered D’s remaining claim in LBTC 10532/2002 to be transferred to the District Court (see Order at Agreed Bundle p.190).  By an Order dated 23\nrd\nMay 2003, D’s remaining claim in LBTC 10532/2002 has been consolidated with P’s claim in this action and becomes the counterclaim herein.\nMain issues in dispute\n25.\nThe main issues in dispute can be summarized as follows:\n(a)\nWhat were the terms of the employment contract between P and D?\n(b)\nHow was the employment contract terminated? In particular:\n(i)\nWhether, as alleged by P, D’s employment contract was terminated by mutual agreement on 14\nth\nSeptember 2002?\n(ii)\nWhether, as alleged by D, D was constructively dismissed by P on 16\nth\nSeptember 2002?\n(c)\nWhether D was in breach of the employment contract and/or committed the tort of conversion as alleged by P? If so, whether P is entitled to the damages claimed?\n(d)\nIf D was constructively dismissed by P as alleged by D, whether D is entitled to his counterclaim? In particular, whether D was entitled to any end of year payment under his employment \n\t\t\t\tcontract?\n(e)\nWhether D’s employment contract is unenforceable by reason of illegality?\nWitnesses and evidence at trial\n26.\nP testified at trial.  She also called MAN and LI as her witnesses.\n27.\nD testified at trial.  He also called YUEN as a witness.\n28.\nIn addition, parties have adduced 2 agreed bundles of documentary evidence (“Agreed Bundle”).\nWhat were the terms of the employment contract between P and D?\n29.\nThe natural starting point for the discussion is on the terms of the employment contract between P and D.\n30.\nThe terms of the employment contract will be particularly relevant to the following issues discussed below, namely, whether D was in breach of the employment contract (as alleged by P), whether D was constructively dismissed by P (as alleged by D) and whether D is entitled to any end of year payment (as alleged by D).\n31.\nOn pleadings, both parties agree the following terms were terms of the employment contract (see Defence and Counterclaim para.5(3)(a)-(d) at Agreed Bundle pp.10-11; Re-Amended Reply and Defence to Counterclaim para.4(2) at Agreed Bundle p.612):\n(a)\nthe monthly basic salary of D was $12,000;\n(b)\neither party might terminate the employment contract by giving the other party 1 month’s advance notice;\n(c)\nD was entitled to 1 rest day in every period of 7 days; and\n(d)\nD was entitled to 7 days’ annual leave with pay every year.\n32.\nIn addition to the agreed terms, P has pleaded that D was required under the employment contract (see Amended Statement of Claim para.3 at Agreed Bundle pp.604-605):\n(a)\nto provide service as driver on such coach or coaches as P might in her absolute discretion assigned to him;\n(b)\nto ply such route or routes according to such time schedule as P might in her absolute discretion designate;\n(c)\nto park the coach D had driven at such place as might be designated by P and/or to inform P the whereabouts of the coach after D had completed his order so as to enable P to get it back herself or through other employee/contractor;\n(d)\nto keep in safe custody the door key(s), the engine ignition key(s) and the wireless transceiver mounted on the coach at the times when D was required to take control of a coach over a period of time and to deliver the same to P as and when required; and\n(e)\nto keep all boarding ticket(s)/coupons collected from passengers in safe custody in respect of particular journey(s) when boarding ticket(s)/coupons were used and to deliver the same to P as and when required.\n33.\nP is also relying on an implied term that D should not intentionally cause damage to the coach he was assigned to drive and/or to remove any part therefrom without the express authorization or consent from P (see Amended Statement of Claim para.4 at Agreed Bundle p.605).\n34.\nD has either denied or not admitted the above terms pleaded by P (see Defence and Counterclaim para.7 at Agreed Bundle p.13 and para.9 at Agreed Bundle p.19).  In addition to the abovementioned agreed terms, D pleads that he was entitled to end of year payment equivalent to 1 month’s basic salary under his employment contract (see Defence and Counterclaim para.5(3)(e) at Agreed Bundle p.11).\n35.\nI observe from the evidence at trial that the parties are in fact on common ground that D was required under the employment contract:\n(a)\nto provide service as driver on such coach or coaches as P might in her absolute discretion assigned to him;\n(b)\nto ply such route or routes according to such time schedule as P might in the absolute discretion designate;\n(c)\nto keep in safe custody the door key(s), the engine ignition key(s) and the wireless transceiver mounted on the coach at all times when D was required to take control of a coach over a period of time and to deliver the same to P as and when required; and\n(d)\nto keep all boarding ticket(s)/coupons collected from passengers in safe custody in respect of particular journey(s) when boarding ticket(s)/coupons were used and to deliver the same to P as and when required.\n36.\nInsofar as the parking of the coach assigned by P to D is concerned, the evidence at trial (which are again not disputed) is that soon after the Coach had been assigned to D, he obtained permission from P through MAN to park the Coach in the vicinity of D’s residence in Yuen Long instead of in Long Fai’s designated car park in Tin Shui Wai.\n37.\nInsofar as the implied term alleged by P is concerned, it must be looked at in 2 parts:\n(a)\nthat D should not intentionally cause damage to the coach he was assigned to drive; and/or\n(b)\nD should not remove any part from the coach he was assigned to drive without the expressed authorization or consent from P.\n38.\nWhilst D denies the first limb of the alleged implied term on pleading, Mr. Iu submits in his written closing submission that there was a bailment of the Coach by P to D.  Relying on\nGilchrist Watt & Sanderson Pty Ltd v. York Products Pty Ltd\n[1970] 3 All ER 825\n, he submits that D (as bailee) was under an obligation to take due care of the Coach.  Curiously, Ms. Wong submits in her written reply that there was no bailment and that\nGilchrist Watt & Sanderson Pty Ltd v. York Products Pty Ltd\nis not applicable but without giving any reason.\n39.\nIf, according to Mr. Iu, D was obligated to take due care of the Coach, D must be taken to be under an obligation not to intentionally cause damage to the Coach.  It therefore seems to me that both parties are in fact in agreement that at least D was under an obligation not to intentionally cause damage to the Coach.  Whether such obligation flows from the employment contract (as alleged by P) or from the law of bailment (as alleged by D) is perhaps academic in the circumstances of this case.\n40.\nAs to the second limb of the alleged implied term, it is clear from MAN’s testimony that Long Fai had not given instructions to its drivers that they had first to obtain Long Fai’s authorization or consent before they could remove anything from the coaches assigned to them.  In any event, P has adduced no evidence as to why this limb should be implied into the employment contract.\n41.\nIn the premises, I only find that it was an implied term of the employment contract that D was under an obligation not to intentionally cause damage to the Coach.\n42.\nAs to whether D should be entitled to end of year payment under the employment contract, the matter is much more complicated and will be discussed later in this judgment when I consider D’s counterclaim.\n43.\nLastly, it must be noted that parties are also in disagreement on pleading as to the term of the employment contract entitling D to any “order fee” for additional work not covered by his basic salary (see paragraphs 5(3)(f)-(g) of Defence and Counterclaim at Agreed Bundle 11-12; and paragraph 4(4)-(5) of the Re-Amended Reply and Defence to Counterclaim at Agreed Bundle pp.612-613).\n44.\nSince D’s claim for “order fee” has apparently been dealt with by the Labour Tribunal in the Award dated 9\nth\nJanuary 2003 and D is not claiming for any “order fee” in his counterclaim herein, it is not necessary for me to resolve this dispute and I shall say no more.\nHow was the employment contract terminated?\n45.\nThe main dispute in this case is how the employment relationship between P and D ended.\n46.\nTo recap, it is P’s case that D’s employment contract was terminated by mutual agreement on 14\nth\nSeptember 2002.  On the other hand, it is D’s case that D was constructively dismissed by P on 16\nth\nSeptember 2002.\n47.\nIn order for P to succeed, P must establish that she has given oral notice to D on 6\nth\nSeptember to terminate D’s employment on 14\nth\nSeptember.  The relevant conversation was between P and D in person.  MAN was not present at the meetings.  Although LI was present at both meetings and YUEN had attended the afternoon one, the discussion between P and each employee was apparently held individually at a separate table and so they do not know what was said between P and D.\n48.\nAccording to P:\n(a)\nShe met with D and other employees of Long Fai in the morning of 6\nth\nSeptember 2002 for the purpose of making arrangement to transfer the business of Long Fai to LF Limited. Insofar as D is concerned, she put 2 documents to him. The object of the first document was to confirm that D had been a self-employed independent contractor of Long Fai for the period from 3rd December 2001 to 2nd December 2002.  The object of the second document was to confirm that D would be a self-employed independent contractor of LF Limited from 3rd December 2002 to 2nd December 2003.  When the meeting concluded, D refused to sign both documents.\n(b)\nP met with D and other employees of Long Fai again in the afternoon of 6th September 2002.  At the conclusion of the meeting, D still refused to sign both documents.  P then told D that since D had refused to sign the documents, D’s employment would be up to 14th September 2002.  D replied it was fine to him and asked to calculate his outstanding wages.  P asked D to return on 14th September to do the calculation.\n49.\nHaving considered all the evidence before me, I am not satisfied that oral notice has been given on 6\nth\nSeptember.\n50.\nTo start with, P’s testimony in court is contradicted by MAN’s testimony at the Labour Tribunal.  On 28\nth\nNovember 2002, MAN has told the Labour Tribunal that after he had learnt from P that D had refused on 6\nth\nSeptember to change his working status, he instructed P on 7\nth\nSeptember 2002 to tell D that D’s employment would be terminated on 15\nth\nSeptember and D needed not report to work on 16\nth\nSeptember (see transcript at 26H-I, T-V and 27O-175G at Agreed Bundle pp.173-174).\n51.\nIn my view, P’s testimony is inconsistent with MAN’s testimony at the Tribunal in 2 material aspects.  First, Man said he only gave instructions to P to terminate D’s employment on 7\nth\nSeptember.  So, P could not have given oral notice to D on 6\nth\nSeptember.  Secondly, Man’s understanding of the effect of the notice is to terminate D’s employment with effect from 16\nth\nSeptember.  This, again, is different from P’s case that D’s employment was terminated on 14\nth\nSeptember.  When Man is cross-examined on the above inconsistencies, he simply says that P might not have followed his instructions and that he does not know what P has in fact told D on 6\nth\nSeptember.  Given MAN’s role in Long Fai as general manager and P’s admission that she relied on MAN for Long Fai’s administrative matters, the above inconsistencies are remarkable and Man’s excuses unsatisfactory.  Furthermore, if P had already given notice of termination to D, it would not be necessary for MAN to instruct P to do that again!\n52.\nSecondly, according to P’s pleaded case either party might terminate D’s employment by giving 1-month advance notice.  So, if P had given notice to terminate D’s employment on 6\nth\nSeptember, such termination should take effect on 5\nth\nOctober – i.e. 1 month from 6\nth\nSeptember!  However, it is P’s testimony that the termination would take effect on 14\nth\nSeptember.  How could this possible?\n53.\nP tries very hard to explain away in cross-examination by alleging that prior to 6\nth\nSeptember the parties had reached another agreement to amend the notice period from 1 month to 7 days.  When she was pressed hard on the timing of this alleged prior agreement, she first said that the agreement was made in early September 2002.  Later on, she alleged that it was made in the month of July 2002.  In any event, the alleged prior agreement, whether in early September or in July, has never been pleaded.\n54.\nThirdly, if P is correct that D’s employment ended on 14\nth\nSeptember and that she had asked D to return to calculate the outstanding wages, one would expect P to be prepared to calculate D’s outstanding wages on 14\nth\nSeptember.  It is noted that, in the past, D had received his basic salary of $12,000 by cheques or cash (see Agreed Bundle at pp.263-273).  However, it is clear from P’s testimony that she was not in a position to do so on that day.  She was admittedly not ready to calculate D’s outstanding wages and did not bring any cash or cheques for payment to D.  This leads one to doubt if P had really meant to terminate D’s employment and calculate D’s outstanding wages on 14\nth\nSeptember.\n55.\nOther than the above obvious discrepancies, I have also causes to doubt the genuineness of P’s case.\n56.\nOn pleadings, P has always denied that there was a second meeting on 6\nth\nSeptember (see Re-Amended Reply and Defence to Counterclaim para.7(5) at Agreed Bundle p.616; and Defence and Counterclaim para.12(5)-(6) at Agreed Bundle p.21).  The implication, insofar as P’s pleaded case is concerned, must be that the oral notice to terminate D’s employment was given in the morning meeting (see Re-Amended Reply and Defence to Counterclaim para.7(1) at Agreed Bundle p.615; Defence and Counterclaim para.12(1) at Agreed Bundle p.19).  Yet, P admits during cross-examination that there was a second meeting on 6\nth\nSeptember and further alleges in re-examination that the alleged oral notice was given in the afternoon meeting.  So, P’s testimony in court is not consistent with her pleadings.\n57.\nAgain on pleadings, P has always alleged that she had only showed D one document on 6\nth\nSeptember (see Re-Amended Reply and Defence to Counterclaim para.7(3) at Agreed Bundle p.616; Defence and Counterclaim para.12(3) at Agreed Bundle p.20).  P’s former solicitors have even supplied a copy of this alleged single document to D’s solicitors upon the latter’s request (see Agreed Bundle pp.281-283).  However, it is quite apparent from P’s testimony that the document supplied by P’s former solicitors is none of the 2 documents mentioned in her testimony.  The document supplied by P’s former solicitors is concerned with the period between 4\nth\nJuly 2002 and 3\nrd\nJuly 2003 (see Agreed Bundle p.283).  However, according to P’s testimony in court, the 2 documents put to D should relate to the periods of 3\nrd\nDecember 2001 to 2\nnd\nDecember 2002 and 3\nrd\nDecember 2002 and 2\nnd\nDecember 2003 respectively.\n58.\nP’s case that D had demanded for $29,000 on 14\nth\nSeptember is also suspicious.  The amount allegedly demanded by D (i.e. $29,000) matches the amount of D’s claim in the Labour Tribunal (i.e. $29,497.70, see Agreed Bundle p.144) closely.  According to D, he was only advised by the Labour Department on 16\nth\nOctober 2002 that his claim against P would be in the region of $29,000 odd and so he could not have made such demand on 14\nth\nSeptember.  Curiously, when D was interviewed by the police under caution on 16\nth\nSeptember 2002, no question was put to him about this alleged demand of $29,000 (see Agreed Bundle pp.289-292)!  This subject was only brought up during the interview on 1\nst\nNovember 2002 (see question and answer no. 8 in D’s cautioned statement at Agreed Bundle p.322).  If D had really demanded for $29,000 on 14\nth\nSeptember, would MAN have failed to mention it to the police when he reported the matter?  D’s solicitors have consistently requested for a copy of MAN’s statement to the police to confirm what had been said by MAN to the police but to no avail (see D’s solicitors’ letters at Agreed Bundle pp.542, 545, 548, 550, 555 and 558).  P has never disclosed MAN’s statement to the police to D or at trial.  When MAN is cross-examined, he initially said he did not recall whether he had mentioned D’s demand of $29,000 when he made his initial report to the police.  Upon further cross-examination by Mr. Iu, MAN then admits that he probably have only told the police well after 16\nth\nSeptember 2002 about the demand when he was requested by the police to give a further statement.  In my view, MAN’s testimony not only casts doubt on P’s testimony but supports D’s testimony that no demand for $29,000 was made on 14\nth\nSeptember.\n59.\nTurning to D’s case that there had not been any notice to terminate his employment, his case tends to be supported by the following evidence:\n(a)\nThe content of his cautioned statement given at 1835 hours on 16\nth\nSeptember 2002 (see Agreed Bundle pp.289-291) is consistent with D’s defence.  It is highly unlikely that D could have thought out his whole defence at this early stage!\n(b)\nAccording to D, he had queried the terms of the documents and refused to sign them on 6\nth\nSeptember 2002.  At the conclusion of the morning meeting, P said she would discuss the terms with MAN and revert to D and other employees.  At the afternoon meeting, P told D and the other employees that MAN had refused to alter the terms of the documents.  In the end, P said she would speak to MAN again and asked D to re-consider his stance and gave her an answer by 14\nth\nSeptember.  She further warned D that if he should refuse to sign the documents, he would be fired.  D then asked P to confirm if P had decided to fire him but there was no answer from P.  Curiously, P agrees under cross-examination that she has indeed told D in the afternoon meeting that D would have to resign if he still refused to sign the documents by 14\nth\nSeptember.\n(c)\nAccording to D, he called in sick in the morning on 16\nth\nSeptember and requested for half-day sick leave.  MAN confirms that he has received such call from D.  If D’s employment had already been terminated on 14\nth\nSeptember, why would D need to ask for sick leave from MAN?  What is even more surprising is MAN’s response over the same call.  He testifies in court that he had scolded D for not calling earlier and in any event it was not necessary for D to call as D had already been fired.  This is inconsistent with his evidence at the Labour Tribunal.  Man’s alleged scolding of D does not feature in his testimony in the Labour Tribunal on 28\nth\nNovember 2002.  Instead, Man is reported to have told the Labour Tribunal that his reply to D was simply, “Alright, can’t help it” (“好呀，冇辦法囉”) (see transcript at 31P at Agreed Bundle p.178).\n60.\nAccording to D, there was another meeting between MAN and D in the evening of 6\nth\nSeptember 2002.  At the conclusion of the meeting, D told MAN that P should follow the employment law if P wished to fire him.  MAN asked D to continue with his work.  Ms. Wong criticizes D in her written closing submission for not mentioning this meeting in D’s witness statement filed herein.  However, D has apparently mentioned such a meeting when he testified on 28\nth\nNovember 2002 at the Labour Tribunal (see transcript at 4A-E at Agreed Bundle p.151).\n61.\nMs. Wong, in her written closing submission, submits that the fact that P had indicated to D on 6\nth\nSeptember 2002 that the employment relationship would terminate on 14\nth\nSeptember 2002 and they would do the calculation on that day is reflected in D’s witness statement to the Labour Tribunal at Agreed Bundle p.523.  However, I cannot discern such an indication in D’s said witness statement.\n62.\nIn her written closing submission, Ms. Wong on the one hand criticizes D for going to the Labour Department (as opposed to the police or contacting P) on 16\nth\nSeptember 2002 when he found the Coach missing.  On the other hand, D was also criticized for going to P after his enquiry with the Labour Department.  I find these criticisms unjustified.  According to D, he immediately called MAN to enquire if MAN had repossessed the Coach when he discovered the Coach missing.  MAN did not give him a direct answer (“支吾以對”), which gave him the impression that P wanted to fire him.  That, together with the fact that he had been asked to sign the 2 documents on 6\nth\nSeptember, prompted him to seek advise from the Labour Department.  I find D’s action in seeking advise from the Labour Department as opposed to contacting P or the police reasonable.  It is also D’s evidence that he called P at about 4 pm after he had consulted the Labour Department to enquire if she had taken the Coach.  I find nothing remarkable in D calling P at that stage.  D had earlier called MAN and could not get a definite answer as to the whereabouts of the Coach.  He then went to the Labour Department and was advised to send letters to P to preserve his rights and to wait for 7 days.  I find it reasonable for him then to enquire with P to clarify his position in relation to the Coach.\n63.\nMs. Wong also submits that D’s and YUEN’s testimony are in complete contradiction insofar as the telephone conversation between them on 16\nth\nSeptember 2002 is concerned.  This is not supported by the evidence.  On the contrary, I find their evidence generally consistent with each other.  What is clear from their evidence is that D had learnt from YUEN that MAN had made accusation against him to the police.  And this has, according to D, prompted him to go to the police on 16\nth\nSeptember.\n64.\nAll in all, I find D’s case more believable.  I find that P has not given oral notice to D on 6\nth\nSeptember 2002 to terminate D’s employment on 14\nth\nSeptember 2002.\n65.\nThe next question is whether D was constructively dismissed by P in the circumstances of this case.\n66.\nThe starting point is the principle laid down in\nWestern Excavating (ECC) Ltd v. Sharp\n[1978] I.C.R. 221 at 227 that:\n“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed.”\n67.\nIn my view, the following facts are pertinent to the question of whether D was constructively dismissed:\n(a)\nOn 6\nth\nSeptember 2002, P put 2 documents to D with the view to change the nature of D’s engagement from an employee to an independent contractor.  D refused to sign any of these documents.  This much is admitted by P.\n(b)\nOn 15\nth\nSeptember 2002, MAN has apparently complained to the police against D for criminal damage of the Coach and theft of the 3 Covers.  This has caused the police to interview D under caution on 16\nth\nSeptember 2002 and these allegations were put toD in the interview (see record of interview at Agreed Bundle pp.289-293).\n(c)\nIn the morning of 16\nth\nSeptember, P recovered possession of the Coach through MAN.  In the afternoon, MAN demanded for the return of and eventually obtained the keys from D inside police station.\n68.\nWhen stripped of the purported context of having given due notice of termination, P’s action of withdrawing the keys and the Coach from D without assigning a replacement coach to him was without legal basis.  The very work D was employed to do according to the employment contract was to provide service as a coach driver of such coach assigned by P.  D was prevented from performing his duties as a coach driver without the Coach.  The withdrawal of the Coach without assigning a replacement coach must go to the root of the employment contract.  When one further takes into account the fact that P had unilaterally tried to alter the nature of D’s engagement earlier and P’s complaint to the police against D, P’s conduct on the whole, viewed objectively, show an intention no longer to be bound by the employment contract.\n69.\nOn the evidence, therefore, I find D was constructively dismissed by P on 16\nth\nSeptember 2002.\nWhether D was in breach of the employment contract and/or committed the tort of conversion as alleged by P?  If so, whether P is entitled to the damages claimed?\n70.\nP is claiming against D for the following loss and damage (see Amended Statement of Claim para.9 at Agreed Bundle pp.607-608):\n(1)\nReplacement of the Transceiver\n$4,000\n(2)\nTowing charges\n$470\n(3)\nChange of lubricant with service fee\n$1,000\n(4)\nLoss of hiring contracts\n$6,000\n(5)\nReplacement of car parts with service fee\n$1,100\n(6)\nHiring of replacement coach for completion of customers’ contracts\n$9,000\n(7)\nDamages paid to customers in respect of disruption of contracts\n$100,000\n(8)\nAdditional wages paid to staff\n$3,000\nTOTAL\n$124,570\n71.\nItem (1) relates to the Transceiver.  The remaining items concern with the Coach and/or the 3 Covers.  I shall now examine each item of P’s claim more closely.\n(a) The Transceiver\n72.\nIt is common ground that the Transceiver installed on board the Coach has a detachable front panel cover (“the Panel”).\n73.\nIt is P’s pleaded case that D has failed and refused to return the Transceiver to P after D’s employment was terminated.  MAN describes in his witness statement filed herein how he discovered on 15\nth\nSeptember 2002 the Transceiver to be missing (at Agreed Bundle p.107):\n“Having carried with me spare keys to the Coach, I open the door and went up for an inspection.  It was found that the Kenwood brand wireless transceiver was missing from the metal mount near the dashboard of the Coach.”\nThus it is clear that what P has been alleging to be missing is the Transceiver, as opposed to the Panel.\n74.\nHowever, when P and MAN testify in court they both say that it was the Panel but not the Transceiver that was found missing.  This seems to be inconsistent with what has been pleaded and what is described in MAN’s statement.\n75.\nFurther, MAN has apparently omitted to mention the loss of either the Transceiver or the Panel to the police and when he testified before the Labour Tribunal.  He agrees during cross-examination that he did not mention the loss of the Transceiver or the Panel when he gave his statement to the police.  He has similarly omitted to mention it when he testified before the Labour Tribunal on 28\nth\nNovember 2002 (see transcript at 29S at Agreed Bundle p.176).\n76.\nCuriously, P has also made the same omission repeatedly.  She mentioned only the loss of the 3 Covers but failed to mention the loss of either the Transceiver or the Panel:\n(a)\nin her statement filed with the Labour Tribunal (at Agreed Bundle p.531);\n(b)\nwhen she testified before the Labour Tribunal on 28\nth\nNovember 2002 (see the transcript at 12Q at Agreed Bundle p.159); and\n(c)\nin paragraph 6 of her supplemental witness statement dated 25th July 2005 filed herein (at Agreed Bundle 581).\n77.\nDuring cross-examination, P explains that she did not regard the Panel as lost because she had seen it inside the plastic bag D was carring on 14\nth\nSeptember and she thought D would return it to her.  Hence, she did not state in her statement filed with the Labour Tribunal that the Panel was also lost.  However, it is noted that she has also stated in the same statement that she had demanded D for the return of the 3 Covers on 15\nth\nSeptember.  If she had then considered the 3 Covers (which she knew were kept by D) lost, why did she not consider the Panel as lost?  P’s explanation is clearly untenable.\n78.\nIt has always been D’s case that he has not taken the Transceiver or the Panel away.  He consistently maintains that he has put the Panel inside the drawer in the driver’s compartment of the Coach after detaching it from the Transceiver when he last got off work.\n79.\nIn view of the glaring omission on the part of P and MAN highlighted above and my doubt on the invoice produced (see below), I consider D’s version more believable.  I therefore find that the Panel has not been lost.\n80.\nGiven my above finding, there can be no question of breach of the employment contract or conversion in relation to the Panel.\n(b) Item (1): $4,000 being\nthe cost of replacement of the Transceiver\n81.\nIn any event, I have grave doubt about P’s claim of $4,000 to replace the Transceiver.\n82.\nIt is true that P has produced an invoice (at Agreed Bundle p.591) to support her claim for $4,000.  However, I find P’s case in this respect far from satisfactory.\n83.\nIt is P’s case that without the Panel, the whole Transceiver would have to be replaced.  P’s testimony is that she asked MAN and LI to purchase a replacement transceiver for the Coach.  After the purchase, the new transceiver was installed in the Coach and she was given the said invoice.  However, when it is pointed out to her during cross-examination that the said invoice is apparently dated 10\nth\nDecember 2001 (i.e. long before 15\nth\nSeptember 2002 when MAN allegedly discovered the Panel missing), she replies that the said invoice is only produced for reference purpose.\n84.\nMAN’s initial testimony in court is already quite different from that of P.  He says that the invoice at Agreed Bundle p.591 was the invoice for the Transceiver (i.e. the one that was lost).  He further alleged that the Transceiver was installed on the Coach about 1-2 days after purchase.  However, when he is confronted with the fact that the said invoice (dated 10\nth\nDecember 2001) pre-dated the purchase of the Coach (i.e. January 2002, see the certificate of particulars of the Coach at Agreed Bundle p.192), he simply agrees without offering any explanation!\n85.\nIf P has indeed purchased a replacement transceiver, one would expect some documentary evidence such as invoice or receipt to evidence the purchase.  This is all the more so as P should be very astute in retaining relevant evidence given the events that P said had happened in September 2002.  I consider it most unsatisfactory that P is unable to produce any documentary evidence.  Worse still, neither P nor MAN can offer any consistent and satisfactory account on the absence of an invoice/receipt.\n86.\nAll in all, I find P has not discharged her burden of proving Item (1) of her claim.\n(c) The Coach\n87.\nIt is P’s case that D has unlawfully failed and/or refused to inform P the whereabouts of the Coach despite repeated requests and demands after the date of termination of the employment contract.\n88.\nTo succeed in this regard, P must establish that neither she nor MAN knew where the Coach was at the material time.  If they had all along known where the Coach was parked, there could be no question of D failing or refusing to inform them.\n89.\nIt is common ground that Long Fai’s coaches are generally parked at its designated car park in Tin Shui Wai.  According to P, Long Fai’s coaches may not be parked anywhere else without first obtaining permission.  MAN is principally responsible to know the whereabouts of Long Fai’s coaches and she does not need to know and it is enough to obtain MAN’s permission to park somewhere else.  At the material time, although she knew the Coach was not parked at Long Fai’s designated car park, she did not know where D had parked the Coach.\n90.\nMAN confirms that he had given permission to D to park the Coach in the vicinity of D’s residence.  He, however, denies he had been informed where exactly D was parking the Coach.  On 14\nth\nSeptember 2002, he spent half an hour driving around the vicinity of D’s residence but failed to locate the Coach.  On the next day, he managed to find the Coach inside YYCP after another half-hour search.  He confirms that YYCP is within walking distance from where D resided.\n91.\nIt is D’s testimony that he had obtained permission from MAN to park the Coach nearer his residence in order to save traveling time.  He rented a car parking space at YYCP, which is within walking distance from his residence, and had been parking the Coach there.  He has produced the receipts from YYCP evidencing the fact that he had been parking there (see Agreed Bundle at pp.275-276).  He has informed MAN that he was parking the Coach at YYCP and MAN had even been to YYCP to inspect the location.\n92.\nBoth P and MAN deny knowledge that the Coach was parked at YYCP.  They both testify that they were in fact not concerned where the Coach was parked.  I find their laxity most surprising.  First, it is inconsistent with the strict policy of Long Fai to have all coaches parked at the designated car park.  Secondly, it is common ground that Long Fai kept a set of spare keys to the Coach in case the Coach was urgently required.  What was the point in keeping the spare keys if no one in Long Fai (other than D) knew where the Coach was?\n93.\nOn the other hand, the fact that the Coach was eventually “found” inside YYCP is consistent with D’s case that he did not fail or refuse to inform P of the whereabouts of the Coach.  First, D had been permitted to park the Coach in the vicinity of his residence and it is common ground that YYCP is within walking distance from D’s residence.  Secondly, if he had wanted to keep P from knowing the whereabouts of the Coach, would he have parked it at YYCP – something that he had been permitted to do?  Thirdly, D’s witness, YUEN, also says that MAN had made it his business to know the whereabouts of YUEN’s coach, which had also been permitted to park away from the designated car park.  This tends to confirm D’s case that MAN should know the whereabouts of the Coach.\n94.\nIn her written closing submission, Ms. Wong criticizes D for referring to YYCP in 3 different ways.  In fact, D might only have referred to YYCP by 2 names at most, namely, “榕苑停車場” (see answer no.8 of D’s cautioned statement at Agreed Bundle p.291) and “容記停車場” (see transcript at 12R at Agreed Bundle p.453).  The remaining description, namely, “元朗大棠路榕苑士多對面停車場” was in fact used by a police officer (see Agreed Bundle p.321).  In any event, I find the 2 names used by D reasonably close to each other.\n95.\nIn the premises, I do not accept that P did not know that the Coach was parked at YYCP at all material times.\n96.\nBased on the above finding of fact, there can be no question of D breaching the employment contract.  D had been permitted to park the Coach in the vicinity of his residence and that was exactly what he did.\n97.\nThere cannot be a claim on conversion in those circumstances either.  According to\nClerk & Lindsell on Torts\n,\n18\nth\nEdition (2000)\nat para.14-09:\n“... conversion is an act of deliberate dealing with a chattel in a manner inconsistent with another's right whereby that other is deprived of the use and possession of it. To be liable the defendant need not intend to question or deny the claimant's right; it is enough that his conduct is inconsistent with those rights.”\n98.\nThere is simply no evidence of any deliberate dealing with the Coach inconsistent with P’s right.\n99.\nGiven my above finding that the Plaintiff has not given any notice of termination on 6\nth\nSeptember 2002, any alleged requests and demands (whether by P personally or through LI) for the return of the Coach must be viewed with suspicion.  In any event, LI’s testimony is that he demanded D on 14\nth\nSeptember 2002 to return the Coach by 2 pm on the same day.  There is no evidence of P demandingfor the return of the Coach after the date of termination of the employment contract (i.e. after 14\nth\nSeptember 2002) as pleaded.\n(d) The 3 Covers\n100.\nTo recap, it is common ground that the 3 Covers were found missing from the Coach when MAN “found” the Coach on 15\nth\nSeptember 2002.  It is P’s case that by removing the 3 Covers, D has breached the employment contract and/or committed the tort of conversion.  D admits to have removed the 3 Covers.\n101.\nAccording to P, it is quite rare for the type of coach same as the Coach to be stolen.  It would suffice if drivers simply lock up after work and Long Fai would not hold its drivers responsible for theft from or of the coaches assigned to them.\n102.\nMAN also gives similar evidence.  At one stage, he claimed that Long Fai was not concerned that its coaches might be stolen because it had bought comprehensive insurance for all its coaches.  However, upon further cross-examination, he retracted from this and alleges that it is only common sense that no one would be interested to steal a coach manufactured by Mitsubishi or Isuzu!   It is noted that the make of the Coach is Mitsubishi.  However, it is also his testimony that he felt it necessary to file a report with the police before actually recovering the Coach on 15\nth\nSeptember because he was afraid that he might be mistaken as a thief and got beaten up!  If it were indeed common sense that no thief would be interested in the Coach, why did MAN hesitate in recovering the Coach on 15\nth\nSeptember before going to the police?  After all, he did have the spare keys to the Coach, did he not?\n103.\nWhilst D admits that he removed the 3 Covers, he maintains that they were removed as a security measure to prevent the Coach from being stolen.  In any event, he has returned the 3 Covers to P through the police since 16\nth\nSeptember 2002.\n104.\nThe question here is whether D’s assertion of removing the 3 Covers as a security measure can be accepted.\n105.\nMs. Wong has attempted to demonstrate in her examination of witnesses that the Coach without the 3 Covers might still be driven for a short while or distance and that was good enough for a thief.  In my view, that is quite beside the point.\n106.\nAlthough P, MAN and LI all insist that they have not heard of removing the 3 Covers as a security measure before, it is clear from MAN’s evidence that he was unable to drive away the Coach in the evening of 15\nth\nSeptember and had to await someone to tow it away on the following day.\n107.\nIt is MAN’s evidence that he noticed a strange noise the moment he ignited the engine on 15\nth\nSeptember.  He then noticed that the big cover inside the driver’s compartment which covered the engine had been displaced.  When he opened the big cover, he noticed the 3 Covers missing.  During re-examination, he explains that if he had tried to drive the Coach away without the 3 Covers, hot coolant and lubricant would burst out from the uncovered tanks and might cause injury to him at the driver seat.  In addition, the engine would eventually overheat and burn without sufficient coolant and lubricant.\n108.\nIn my view, the effectiveness of D’s alleged means of securing the Coach has been confirmed by the testimony of MAN.\n109.\nD’s act must also be viewed in its proper context.  It is common ground that the Coach was brand new when it was assigned to D and no anti-theft security measure was installed.  Although it has been suggested that the more usual anti-theft measures adopted by other coach drivers would be by means of steering wheel lock or brake lock, none had been supplied to D.\n110.\nMs. Wong has criticized D in her written closing submission for only employing such security measure over the weekends but not on weekdays.  D has explained that he would normally stayed across the border if he knew he had no order over the weekend.  So he would remove the 3 Covers to secure the Coach over such longer period.  I find D’s explanation reasonable.\n111.\nIn the circumstances, I accept D’s explanation and find that he had removed the 3 Covers as a security measure to prevent the Coach from being stolen.\n112.\nD’s act in securing the Coach is consistent with his obligation under the employment contract.  All employees are deemed to have a discretion to act for the protection of the employer’s property (see Clerk and Lindsell on Torts, 18\nth\nEdition (2000), para.5-34).  This is all the more so as it is remembered that P had not instructed her employees to seek permission before removing parts from their coaches.  As such, there cannot be any breach of the employment contract.\n113.\nThere cannot be any conversion either as I have found what D did to be consistent with the right of P as owner of the Coach.\n(e) Item (8): $3,000 being additional wages paid to staff\n114.\nP has adduced 2 receipts to support P’s claim in this regard (at Agreed Bundle pp.596-597).  However, the sum total of these 2 receipts, which is $3,755, does not support her claim of $3,000.  P has apparently noted this inconsistency in court and volunteers to limit her claim to $3,000 only.\n115.\nBe that as it may, I am still not satisfied with the genuineness of these receipts.  These 2 receipts have been purportedly issued to evidence payments to MAN and LI for their extra work on 15\nth\nand 16\nth\nSeptember.  Both MAN and LI say they have already received payment and it is handwritten on each receipt the date of 30\nth\nSeptember 2002.  If P has already paid them as early as 30\nth\nSeptember 2002 and such payments have all along been evidenced by these receipts, I find it strange that P would claim for $3,000 (but not $3,755) in her Statement of Claim dated 16\nth\nJune 2003.\n(f) Item (2): $470 being towing charges\n116.\nGiven my above finding that D was constructively dismissed by P, there is no basis for D to be responsible for any towing charges.  In any event, the receipt produced by P (at Agreed Bundle p.593), which shows an amount of $400, does not tally with P’s claim of $470!\n(g) Item (3): $1,000 being change of lubricant with service fee\n117.\nP has not satisfied me that this item is anything other than for general maintenance of the Coach to which P as owner should be responsible.\n(h) Item (5): $1,100 being replacement for car parts with service fee\n118.\nP has failed to produce any documentary evidence to support this item of claim.\n119.\nP has not satisfied me as to the circumstances of incurring this $1,100.  According to both P and MAN on the one hand, this sum of $1,100 is for the parts to replace the 3 Covers and was paid to the same garage which had changed the lubricant oil and serviced the Coach (i.e. 建新車房).  P even claims that she has received a receipt from the garage but has since misplaced it.  However, it is LI’s evidence on the other hand that he himself bought the 3 Covers from Mitsubishi service centre and paid for them.  He passed the invoice to Long Fai and has been reimbursed.\n120.\nIn any event, MAN agrees that he has always knownthat the 3 Covers are being kept by the police and he could have obtained them from the police.  I am not satisfied that it was necessary to get replacement for the 3 Covers.\n(i) Item (4): $6,000 being loss of hiring contracts\n121.\nThe basis of P’s claim here is that the Coach was under repair for 5 days.  But for the repair, P would have received hiring charges in the sum of $6,000 from Avonwin (i.e. at $1,200 per day).  P’s claim therefore is premised upon the fact that it has taken 5 days to repair the Coach.\n122.\nAccording to MAN, it required 5 days to repair the Coach because there was no available parts to replace the 3 Covers.  This is contradicted by LI who says that he managed to purchase the lubricant cover and the water-coolant cover from Mitsubishi service centre for the Coach (although he cannot quite remember exactly when he did that).  However, the small engine cover was out of stock and had to be ordered in from Japan which would take 6 weeks.  In the meantime, the garage had used a wooden plank to act as a makeshift cover for the small engine cover and the Coach was useable.\n123.\nCurious enough, LI’s evidence is consistent with MAN’s witness statement filed herein (see paragraph 29 of MAN’s witness statement at Agreed Bundle p.109) which stated that:\n“Because the Coach was required to be repaired, it was left with the service company Kin Sang Garage for 1 day.”\n124.\nAll in all, I am not satisfied with this item of claim.\n(j) Item (6): $9,000 being loss of hiring contracts\n125.\nIt is P’s case that the Coach was hired to Avonwin at the material time.  As the Coach was repaired for 5 days, Avonwin hired a replacement coach at $1,800 per day for 5 days.  Hence, Long Fai paid $9,000 to Avonwin for this additional cost.\n126.\nTo start with, this item is also premised upon the taking of 5 days to repair the Coach and I have already found against P in this regard.  Secondly, no invoice or receipt is produced to evidence this payment of $9,000 to Avonwin and the payment is not reflected in the accounting records of Avonwin either (see Agreed Bundle pp.561-567).  Thirdly, given P’s case that Avonwin is paying P $1,200 a day for the hiring of the Coach, the extra cost incurred by Avonwin (if any) in hiring the replacement coach for 5 days could only have been $3,000 (i.e. ($1,800 – $1,200) x 5).  MAN has failed to provide any explanation on this discrepancy under cross-examination.  Instead, he merely insists on the claim for $9,000.\n(j) Item (7): $100,000 being damages paid to customers in respect of disruption of contracts\n127.\nThis is perhaps the single most important item in P’s claim by reason of the amount claimed.\n128.\nAccording to P and MAN, the non-availability of the Coach to run Avonwin’s orders has caused business loss to Avonwin.  Eventually, P and Avonwin have agreed that P should pay $100,000 to Avonwin as compensation.  This agreement, according to P’s case, has been reduced in writing (see Agreed Bundle p.595).\n129.\nTo start with, I find this alleged agreement highly suspicious in view of the intricate relationship between Long Fai and Avonwin.  P says that she instructed MAN to negotiate with Avonwin and MAN says he negotiated with the other directors of Avonwin.  However, MAN himself holds 98 % of the shareholding in Avonwin and the remainder is held by P.  The other directors of Avonwin (i.e. other than P and MAN) do not have any beneficial interest in Avonwin!  Secondly, the written agreement produced at trial is apparently unsigned!\n130.\nMost suspicious of all, it is P’s case that the basis of the agreement on the amount of compensation of $100,000 is 10 % of the turnover of Avonwin for the months of July, August and September 2002 totaling $1,000,000.  P has even adduced the accounting records of Avonwin (at Agreed Bundle pp.561-567) purportedly to show that:\n(a)\nthe monthly turnover of Avonwin for the months of July, August and September 2002 is in the region of $300,000 odd; and\n(b)\nthere has been a significant drop in the turnover of Avonwin in the month of December 2002 to $254,400 (at Agreed Bundle p.564).\nP and MAN both testify that it took about 3 months for Avonwin’s loss due to the non-availability of the Coach in September 2002 to be reflected in the accounts.\n131.\nMr. Iu has been most meticulous in scrutinizing Avonwin’s accounting records.  The result, which has been admitted by MAN in cross-examination, is that Avonwin has in fact made more profit in the month of December 2002 (at $4,400) than the months of July, August and September 2002 (averaging at about $4,000 per month)!  So, what P is really claiming under this item is in fact about 25 times of the average monthly profit of Avonwin!\n132.\nAs the accounting record of Avonwin does not support P’s allegation that Avonwin has suffered a loss in business in December due to the non-availability of the Coach back in September, there is simply no basis to claim for any compensation!\n(k) Conclusion on P’s claim\n133.\nBy reason of the above, I am not satisfied that D has breached the employment contract or committed the tort of conversion.  Even if I am wrong, I am not satisfied that P has discharged her burden in proving any of the items of loss and damages claimed.\nWhether D is entitled to his counterclaim in the sum of $23,677.70?\n134.\nI now turn to the counterclaim.  D is counterclaiming against P for the following items (at Agreed Bundle p.35):\n(1)\nWages in lieu of notice\n$12,000.00\n(2)\nAnnual leave pay\n$2,209.30\n(3)\nEnd of year pay\n$9,468.40\nTOTAL\n23,677.70\n135.\nI have already noted above that:\n(a)\nD’s employment with P as a coach driver commenced on 3\nrd\nDecember 2001.\n(b)\nD was entitled to basic salary of $12,000 per month.\n(c)\nD was entitled to 7 days’ annual leave with pay every year.\n(d)\nEither P or D might give the other party one-month advance notice to terminate the employment agreement.\n(a) Item (1): $12,000 being wages in lieu of notice\n136.\nGiven my above finding that D has been constructively dismissed by P on 16\nth\nSeptember 2002, P should be entitled to wages in lieu of notice.  This should be calculated on the basis of 1 month’s basic salary at $12,000.\n(b) Item (2): $2,209.30 being annual leave pay\n137.\nThere is no evidence that D has taken any annual leave between 3\nrd\nDecember 2001 (i.e. when he commenced working for P) and 16\nth\nSeptember 2002 (when D was constructively dismissed).  It is common ground that D was entitled to 7 days’ annual leave with pay every year under the employment contract.\n138.\nD should therefore be entitled to $2,209.30 (i.e. $12,000 ¸ 30 x 7 x 288/365).\n(c) Item (3): $9,468.40 being end of year pay\n139.\nDespite the concession made by P at the beginning of the trial that D was still an employee of Long Fai up to September 2002, the parties are still in dispute as to whether D was entitled to any end of year payment under his employment agreement.\n140.\nIt is common ground that the employment contract was concluded between MAN and D during the interview conducted in November 2001.\n141.\nAccording to MAN, he did not offer any end of year payment as part of the employment package to D.  He says that D could do nothing if Long Fai was unwilling to offer such benefit and D eventually accepted the situation (i.e. without entitlement to end of year payment) by reporting to work.  It is also MAN’s evidence that Long Fai has only offered end of year payment to one employee, namely, LI because LI is a supervisor.\n142.\nTo start with, MAN’s testimony that Long Fai has only offered end of year payment to LI is contradicted by his own evidence in the Labour Tribunal.  On 28\nth\nNovember 2002, MAN has apparently told the Tribunal that many employees of Long Fai have received such benefit before (see the transcript at 24K at Agreed Bundle p.171).\n143.\nMore significantly, MAN’s evidence that he did not offer end of year payment to D is contradicted by his own statement filed with the Labour Tribunal.  In his statement to the Tribunal signed on 16\nth\nDecember 2002 (at Agreed Bundle pp.534-535), it is stated that D would be entitled to double pay upon completion of 12 months’ work.  When he is confronted with his own statement during cross-examination, he agrees that he did tell D that D would be entitled to end of year payment.\n144.\nMAN tries to salvage the situation by then insisting that D’s entitlement to end of year payment should be conditional upon D completing a year’s service and that such payment should be calculated on the basis of basic salary of $4,500 per month.  This last twist in MAN’s testimony is particularly amazing.  First, that has never been P’s pleaded case.  Secondly, P has clearly admitted on pleading that D’s monthly basic salary should be $12,000.  MAN has failed to elaborate why D’s end of year payment should be calculated on the basis of $4,500 per month but not the monthly salary of $12,000.\n145.\nAlthough P was not present during the interview when the employment contract was concluded, her testimony may shred some light on this issue.  After all, she is the sole-proprietress of Long Fai.  According to P, all drivers of Long Fai employed on monthly basis should be entitled to end of year payment.  She, however, maintains that D is not entitled to such payment because D was employed on “daily basis”!  P has never alleged in her pleadings that P was employed on “daily basis”!  That much is admitted by Ms. Wong.\n146.\nInsofar as D is concerned, he has consistently maintained that one of the terms of his employment agreement was that he was entitled to end of year payment.  He, however, agrees during cross-examination that he would be paid oncompletion a year’s work.\n147.\nGiven the different versions advanced by MAN at different times and the inconsistency between his testimony and that of P, I find D’s case more believable.\n148.\nIt has been noted above that it is also D’s evidence that he is entitled to such payment upon completion of a year’s work.  Would this affect his entitlement to end of year payment?\n149.\n“End of year payment” is governed by Part IIA of the\nEmployment Ordinance\n,\nCap.57\n(“the Ordinance”).  Section 11B(1) of the Ordinance provides that:\n“Subject to any agreement to the contrary … [Part IIA of the Ordinance] shall apply to an employee employed under a\ncontinuous contract\nif an\nend of year payment\nis payable by the employer to that employee by virtue of a term or condition (whether written or oral, express or implied) of the contract of employment.” (my emphasis)\n150.\n“End of year payment” is defined in s.11A of the Ordinance as:\n“any annual payment (whether described as \"thirteenth month payment\", \"fourteenth month payment\", \"double pay\", \"end of year bonus\" or otherwise) or annual bonus of a contractual nature,\nbut does not include any annual payment or any annual bonus, or any proportion thereof, which is of a gratuitous nature or which is payable only at the discretion of the employer\n” (my emphasis)\n151.\nThere is no evidence in this case that the “end of year payment” to which D is entitled under his employment contract is of a gratuitous nature or which is payable only at the discretion of P.  In any event, s.11AA(1) of the Ordinance presumed that an end of year payment is not of a gratuitous nature and is not payable only at the discretion of the employer unless there is a written term or condition in the contract of employment to the contrary.  It is noted that D’s employment contract is entirely oral and there can be no question of any written term or condition to that effect.\n152.\nGiven P’s present pleadings, it is clear that D was employed under a continuous contract.  So the conditions set out in s.11B(1) is satisfied and Part IIA of the Ordinance applies to D.\n153.\nBut what about D’s evidence that he would be paid his end of year payment upon completion of a year’s work?\n154.\nTo start with, although the parties might have agreed that D would be paid end of year payment upon completion of a year’s work, there is no term disentitling D from payment of a proportion of his end of year payment if he does not complete a year’s work.\n155.\nIn any event, s.11B(2) provides that:\n“In the case of an employee to whom this Part [i.e. Part II] applies, any term or condition of the contract of employment which purports to prevent the payment under section 11F of a proportion of the end of year payment shall be void.”\n156.\nSection 11F(1) in Part IIA of the Ordinance prescribes proportioning of end of year payment.  It provides as follows:\n“\nSubject to subsections (1A) and (1B) [which are not applicable to this case], where, in the case of an employee to whom this Part [i.e. Part II] applies who has not been employed by the same employer for the whole of a payment period but has been so employed for a period of not less than 3 months in the payment period-\n(a)\nthe contract of employment is terminated-\n(i)\nat any time during the payment period; or\n(ii)\non the expiry of the payment period; or\n(b)\nthe employee continues to be employed by the employer after the expiry of the payment period,\nthe employee shall be paid a proportion, calculated in accordance with subsection (2), of the end of year payment that would have been payable under this Part if he had been employed by the same employer for the whole of the payment period.”\n157.\nSection 11F(2) of the Ordinance then provides the following calculation:\n“\nThe proportion of the end of year payment payable under subsection (1) shall be-\n(a)\nthe proportion specified in that behalf in the contract of employment; or\n(b)\nif a proportion is not so specified, the sum which bears the same proportion to a full month's wages of the employee as his period of service under the contract of employment in the payment period bears to that payment period.”\n158.\nIt is clear that D’s employment contract does not provide for payment of a proportion of the end of year payment.  Section 11F(2)(b) is therefore applicable and D should be entitled to end of payment proportioned in accordance with s.11F(2).\n159.\nUnder Section 11F(2)(b), the end of payment to which D is entitled would be $9,468.40 (i.e. $12,000 x 288/365).\n(d) Conclusion on D’s counterclaim\n160.\nFor the above reasons, I am satisfied that D has proved his counterclaim in the sum of $23,677.70.\nWhether D’s employment contract is unenforceable by reason of illegality?\n161.\nAs a last ditch attempt to refute D’s counterclaim, P has alleged that D’s employment contract is contrary to public policy and unenforceable (see Re-Amended Reply and Defence to Counterclaim para.14 at Agreed Bundle p.621).  P’s allegation is said to be based on D’s own pleading that as far as D knew the routes operated by Long Fai designated to D were illegal (see Defence and Counterclaim para.8(11) at Agreed Bundle pp.17).\n162.\nTo start with, there is a presumption of legality.  According to Chitty on Contracts, 29\nth\nEdition (2004), para.16-193:\n“The party alleging the illegality of the contract bears the legal burden of proving this fact; therefore if the contract be reasonably susceptible of two meanings or two modes of performance, one legal and the other not the legal burden of proving its illegality is undischarged and that interpretation is to be put upon the contract which will support it and give it operation.  If the contract on the face of it shows an illegal intention, an evidential burden lies upon the party supporting the contract to bring evidence reasonably capable of showing the legality of the intention.”\n163.\nThere is nothing illegal on the face of what I found to be the terms of the employment contract.  So the burden is on P (as the party alleging illegality) to prove that fact.  However, P has denied on pleadings that the routes are illegal (see Re-Amended Reply and Defence to Counterclaim para.6(9) at Agreed Bundle p.614).  So the running of this most desperate allegation on the part of P is inconsistent with her pleaded case!\n164.\nBe that as it may, the evidence at trial in this regard is that:\n(a)\nAccording to MAN, Avonwin hired coaches with driver from Long Fai to run Avonwin’s routes.  So, D had been assigned by Long Fai to ply routes designated by Avonwin.  At all material times, Avonwin did not have the requisite licence from Transport Department to run those routes.\n(b)\nAccording to D, he was informed by the police that the routes that he plied for Long Fai were illegal.\n165.\nGiven MAN’s role in Avonwin, he would be in a position to know whether the routes ran by Avonwin and designated to D were illegal.  However, MAN’s testimony at trial is contradicted by his evidence at the Labour Tribunal.  On 28\nth\nNovember 2002, he has apparently told the Tribunal that those routes were legal (see transcript at 16F-K at Agreed Bundle p.367).   I therefore find MAN’s testimony in court to be suspicious.\n166.\nThat leaves D’s testimony.  However, D’s understanding was apparently based on what he learnt from the police.  D was last interviewed by the police on 1\nst\nNovember 2002 (see Agreed Bundle p.321) and he has apparently complained to the Transport Department in November/December 2002 (see Agreed Bundle p.201).  So the timing of D’s complaint supports D’s case that only learnt of such information from the police!\n167.\nIn the end, it is not at all clear whet the alleged illegality is.  Which route(s) is/are alleged to be illegal?  How is the running of such route illegal?  What is/are the relevant legislative provision(s)?  What is/are the contravention(s) alleged?  All these are neither covered by evidence nor dealt with in P’s submission.\n168.\nAll in all, I am not satisfied with the evidence before me that the routes assigned to D by P were illegal.\n169.\nWhat P has tried very hard to say in this case is that the employment contract may be invalidated on the grounds of public policy so much so that D may not found his counterclaim on his employment contract.  In this regard, Le Pichon JA in\nYip Alice v. Wong Shun (No.2)\n[2003] 2 HKC 528\nat 537 has observed that:\n“\nOne important element of public policy is that stated by Lord Wright in\nVita Food Poroducts Inc v. Unus Shipping Co Ltd\n[1939] AC 277\nat 293:\n‘\nNor must it be forgotten that the rule by which contracts not expressly forbidden by statute or declared to be void are in proper cases nullified for disobedience to a statute is a rule of public policy only, and public policy understood in a wider sense may at times be better served by refusing to nullify a bargain save on serious and sufficient grounds’”\n170.\nIn the present case, the only person who stands to reap a windfall from the allegation of illegality would be P.  She would then be able to profit from running such “illegal” routes for Avonwin but, at the same time, avoid paying D under D’s employment contract.  It is difficult to see how the general public may benefit from depriving D of his contractual rights against P under the employment contract!\nConclusion and Judgment\n171.\nBy reason of the above, I dismiss P’s claim and enter judgment in favour of D on the counterclaim.  P is adjudged to pay D the sum of $23,677.70 with interest thereon at judgment rate from 4\nth\nNovember 2002 (i.e. the date when D filed his claim with the Labour Tribunal) until payment.\n172.\nLastly, I make an order nisi that P do pay D’s costs of defence and counterclaim including all reserved costs, to be taxed if not agreed.  D’s own costs to be taxed in accordance with\nLegal Aid Regulations\n.  Unless an application has been made to vary such order, such order shall become absolute 14 days after this written decision is handed down.\n( J. Ko )\nDeputy District Judge\nMiss Catherine K. K. Wong instructed by Messrs. Yeung & Tsang for Plaintiff.\nMr. Iu Ting Pong, Wallace of Messrs. A. M. Mui & Kwan, assigned by D.L.A., for Defendant.",
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