AXA China Region Insurance Company Limited v. Lin Kwai Ying Katie

In brief:

AXA brought claims against their former employee who had been head of their “Swiss Privileges” services. It was alleged that she (i) had breached the non-solicitation clause of her employment contract; (ii) was in breach of her fiduciary obligations; and (iii) had committed the tort of causing loss by unlawful means. The defendant sought to strike out these claims on the basis that they fall within the exclusive jurisdiction of the Labour Tribunal and element (iii) of the claim was insufficiently pleaded to constitute a valid cause of action in causing loss by unlawful means. The Court of First Instance criticized AXA for failing to properly plead the material facts and struck out the statement of claim although it was stated that the action would not be dismissed if AXA served a re-amended statement of claim reformulating its case regarding the tort of causing loss by unlawful means within a certain timeframe. We will continue to follow this case with interest and report on any further developments.

Take away points:

There was a reference in the judgment to the difficulties which arise when parts of a claim fall under the jurisdiction of the Labour Tribunal but other components of it are founded in tort, which the Tribunal does not have the jurisdiction to hear. The judge noted that this issue has come up several times, most recently in the Deutsche Bank AG (Hong Kong Branch) case. The judge quoted from the Deutsche Bank AG decision that the rationale for these claims being heard by the court instead of the Labour Tribunal was due to the fact that the legislature intended the Labour Tribunal to be “an informal forum for employees [and employers] to pursue their claims … in a speedy manner” and claims based on tort, breach of common duties or statutory duties are likely to be too complicated for the Labour Tribunal to be able to deal with speedily. The judge held that he was prepared to accept jurisdiction in relation to the claim in tort on the basis of past decisions and because he did not consider that it was a litigation tactic and mere “window-dressing” with the agenda to have the claims fall outside the jurisdiction of the Labour Tribunal. As mentioned above,

AXA will have to reformulate its case in order to remedy the defects in its statement of claim, prior to the court accepting jurisdiction.

It seems likely that the Legislative Council will need to address the issue of what should properly fall within the exclusive jurisdiction of the Labour Tribunal in the near future, as there have now been several judgments where views have been expressed that the legislature could not have intended certain complex claims to be heard in the Labour Tribunal.