HUNG FAT ENGINEERING CO (A FIRM) v. RHK DESIGN LTD

DCCJ 667/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 667 OF 2005

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BETWEEN

  HUNG FAT ENGINEERING CO. (a firm) Plaintiff
  and  
  RHK DESIGN LIMITED Defendant

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Coram: Deputy District Judge W.C. Li in Chambers (Open to Public)

Date of Hearing : 27th October 2006

Date of Decision : 27th October 2006

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DECISION

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1. I have heard the parties on this Order 14 Summary Judgment Application. I have made my feelings clear to both parties. I did nothide my view on the same. This is an obvious case, as I have stated, where the Defendant has a good defence and a good counterclaim.

2. An employee is under a fiduciary duty to disclose his interests to his employer and not to make secret profits by taking or enteringinto contract with his employer. If he does so without consent and without making disclosure in good faith, he is, as most of usare aware, not entitled to take any profit from it and is also liable to account for all secret profits he derived therefrom.

3. The Plaintiff’s position as a project manager, an employee of the Defendant, was also in a position of making decision and enteringinto contract on behalf of his employer. He awarded the contract to himself. The Plaintiff argument that he signed in his capacityas an employee on one hand and his capacity as a third party contracting with the employer on the other hand, being two separatelegal entities, has no legal sense indeed at all, it just cannot be sustained. And this is basically or fundamentally the Plaintiff’scase.

4. We could obviously see the weakness in his argument. The sheer bulk of the papers submitted by the Plaintiff and the sheer lengthof the argument put forward and the debates raised by the Plaintiff in his own papers submitted – albeit most of it are not relevantto this Order 14 hearing, those are matters for trial and it goes to show that the live issue is there that needed to be tried. The live issue is, I might be repeating myself, did the Plaintiff disclose his identity to his employer and obtain his employer’sconsent to enter into contract with the employer to do those project works. The Plaintiff’s application for summary judgment mustfail.

5. I therefore dismiss the Plaintiff’s application and order that the Plaintiff is to pay the Defendant’s costs of this hearingto be taxed if not agreed.

  (W. C. Li)
Deputy District Judge

Representation:

Miss Wong Yin Yee of Messrs. Eli K.K. Tsui & Co. for the Plaintiff

Miss Li Chung Nam of Messrs. Robertsons for the Defendant