A last-minute jurisdiction challenge that cost the employer more than it bargained for
An employer's eleventh-hour bid to strike out a wage claim failed, with enhanced costs ordered, Deputy District Judge Adrian Lai held on 26 May 2026.
The ruling came on the day the trial was due to begin in Hong Kong. A week earlier, the company had filed a summons asking the court to throw out the employee's counterclaim for outstanding wages, arguing the court had no power to hear it.
The employee worked for the food-and-beverage services company from March 2017 to May 2022. After the relationship ended, the employer sued, claiming damages for breach of various common law duties. The employee, in turn, counterclaimed for about HK$58,000 in outstanding wages covering June 2020 to May 2022, plus interest, and alternatively for HK$20,000 said to relate to a dishonoured cheque. Those claims have yet to be tried.
The dispute that reached the judge was narrower. Wage claims normally sit within the exclusive jurisdiction of Hong Kong's Labour Tribunal under the Labour Tribunal Ordinance. The employer seized on the procedural history, arguing the counterclaim had never been properly transferred from the tribunal and was defective for want of jurisdiction.
The wages claim had begun in the Labour Tribunal, which declined jurisdiction and sent it to the District Court, where it took a fresh case number. A registrar later gave the employee leave to discontinue that separate file after the same claim reappeared as the counterclaim, leaving one money claim instead of two running in parallel.
The judge disagreed. Drawing on older authority that separates a claim from a cause of action, he found the transferred wage claim and the counterclaim were one and the same, holding that "this Court still retains jurisdiction over the Wages Claim." The discontinuance, he reasoned, was a case-management step to stop one money claim running in two parallel actions, not a surrender of the court's power to decide it.
The employee had described the discontinuance as "a mere technicality that fails to perfect the Transfer cum consolidation Order." The employer, for its part, leaned on a High Court decision, Acumen Hong Kong Limited v Kwan Pak Kei Lawton, but the judge held it turned on different facts and did not apply here.
Having upheld jurisdiction, the judge dismissed the summons and turned to costs. The employee had also argued delay and estoppel, but the judge said he did not need to decide those points given his conclusion on jurisdiction.
The judge recorded that the summons had been taken out very late, that the employer offered no good explanation for not raising the jurisdiction point earlier or at the pre-trial review, and that the failed application had consumed half a day set aside for the trial. The employer accepted it had never raised any jurisdiction objection to the counterclaim before filing the summons. On that footing he held that "the circumstances of this case justify an indemnity costs order, and I so order," directing the company to pay the employee's costs on the indemnity basis, a higher scale than usual.
