Yiu Shui Kwong v. Legend World Asia Group Ltd

DCEO 8/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EQUAL OPPORTUNITIES ACTION NO 8 OF 2015

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ASSESSMENT OF DAMAGES

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1.The claimant complains that he was charged more in terms of entrance fee on the ground of his sex for accessing the respondent’s club.

2.With the legal assistance of the Equal Opportunities Commission (“the Commission”), the claimant commenced this action to claim for a declaration that the respondent was in breach of the Sex Discrimination Ordinance, Cap 480 (“SDO”) and an order that the respondent amends its pricing policy and for damages. 

3.The respondent did not enter an appearance and interlocutory judgment was entered against it for damages to be assessed upon the claimant abandoning his other claims.

4.This is the assessment of the damages due to the claimant.

The judgment

5.According to the Notice of Claim:

(a) The Legends Club is operated by the respondent.

(b) On 28 July 2014, the claimant paid $300 to gain access to the club to obtain the facilities and services therein. However, the respondent only charged its female customers $120 in terms of entrance fee for the same facilities and services.

(c) He later discovered from the respondent’s website that the respondent habitually charges its male customers a higher entrance fee as follows:

	21:30 – 02:00
	Male entrance fee (HK$)	Female entrance fee (HK$)
Sunday to Friday	300	120
Saturday and General Holiday	350	220
	02:00 – 04:30
	Male entrance fee (HK$)	Female entrance fee (HK$)
Sunday to Friday	180	70
Saturday and General Holiday	210	130

6.It is the claimant’s case that he was treated less favourably by the respondent on the ground of his sex by reason of the disparity in the amount of the entrance fee charged. 

7.The claimant’s claim is premised on sections 5, 6 and 28 of the SDO.

8.Section 28 (in Part 4 of the ordinance) is in these terms: 

“(1) It is unlawful for any person concerned with the provision (for payment or not) of goods, facilities or services to the public or a section of the public to discriminate against a woman who seeks to obtain or use those goods, facilities or services –

(a) by refusing or deliberating omitting to provide her with any of them; or

(b) by refusing or deliberately omitting her with goods, facilities or services of the like quality, in the like manner and on the like terms as are normal in his case in relation to male members of the public or (where she belongs to a section of the pubic) to male members of that section.

(2) The following are examples of the facilities and services referred to in subsection (1) –

...

(e) facilities for entertainment, recreation or refreshment;

...”

9.Section 5(1) defines “discrimination” as:

“A person discriminates against a woman in any circumstances relevant for the purposes of any provision of this Ordinance if –

(a) on the ground of her sex he treats her less favourably than he treats or would treat a man; or

(b) he applies to her a requirement or condition which he applies or would apply equally to a man but –

(i) which is such that the proportion of women who can comply with it is considerably smaller than the proportion of men who can comply with it;

(ii) which he cannot show to be justifiable irrespective of the sex of the person to whom it is applied; and

(iii) which is to her detriment because she cannot comply with it.”

10.And section 6(1) requires that section 5 and the provisions in Parts 3 and 4 of the SDO relating to sex discrimination against women be read as applying equally to the treatment of men with the necessary modifications.

11.The claimant’s complaint is one of direct discrimination (see section 5(1)(a)).  Unlike indirect discrimination under section 5(1)(b), direct discrimination cannot be justified.

12.There is no suggestion that the respondent can avail itself of any of the exceptions provided in the SDO.

13.Upon the respondent’s default in filing a response, interlocutory judgment was entered in this action in pursuance of rule 13 of the District Court Equal Opportunities Rules, Cap 336G.

The assessment

14.According to the written opening of Mr Kam Cheung (representing the claimant), the claimant is entitled to the following damages:

(a) $180, being the difference between what the claimant paid and what the respondent had charges its female patrons;

(b) damages for injury to feelings; and

(c) exemplary damages.

15.I point out to Mr Cheung that the claimant did not mention any claim for special damages in his Notice of Claim.  Mr Cheung replies that such a claim flows from the facts stated in the Notice of Claim.  In my view, it would be unfair to allow the claimant to mount a new claim in the course of the assessment.

16.Turning to the claim for damages for injury to feelings, it must be appreciated that such an award is not automatic once it is established that there has been unlawful discrimination.  As May LJ explained in the English case of Alexander v Home Office [1988] ICR 685 at p 694:

“Whilst I agree that in the substantial majority of discrimination cases the unlawful conduct will cause personal hurt, in the sense of injury to feelings, ... I do not think that this must ‘inevitably’ follow. A proper inference to draw in a case such as this may be that the discrimination will cause a plaintiff hurt of a particular kind. But unless the court can and feels it right to draw that inference, then the mere fact that a defendant is guilty of racial discrimination is not in my opinion in itself a factor affecting damages.”

17.In Vento v Chief Constable of West Yorkshire Police (No 2) [2003] IRLR 102, the English Court of Appeal gave the following guidance on the assessment process:

“[50]  It is self-evident that the assessment of compensation for an injury or loss, which is neither physical nor financial, presents special problems for the judicial process, which aims to produce results objectively justified by evidence, reason and precedent. Subjective feelings of upset, frustration, worry, anxiety, mental distress, fear, grief, anguish, humiliation, unhappiness, stress, depression and so on and the degree of their intensity are incapable of objective proof or of measurement in monetary terms. Translating hurt feelings into hard currency is bound to be an artificial exercise. As Dickson J said in Andrews v Grand & Toy Alberta Ltd (1978) 83 DLR (3d) 452 at 475-476, (cited by this court in Heil v Rankin [2000] IRLR 334 at 337, paragraph 16) there is no medium of exchange or market for non-pecuniary losses and their monetary evaluation:

‘...  is a philosophical and policy exercise more than a legal or logical one. The award must be fair and reasonable, fairness being gauged by earlier decisions; but the award must also of necessity be arbitrary or conventional. No money can provide true restitution.’

[51]  Although they are incapable of objective proof or measurement in monetary terms, hurt feelings are none the less real in human terms. The courts and tribunals have to do the best they can on the available material to make a sensible assessment, accepting that it is impossible to justify or explain a particular sum with the same kind of solid evidential foundation and persuasive practical reasoning available in the calculation of financial loss or compensation for bodily injury...

[53]  In HM Prison Service v Johnson, Smith J reviewed the authorities on compensation for non-pecuniary loss and made a valuable summary of the general principles gathered from them. We would gratefully adopt that summary. Employment tribunals should have it in mind when carrying out this challenging exercise. In her judgment on behalf of the Appeal Tribunal, Smith J said at p 165:

‘(i) Awards for injury to feelings are compensatory. They should be just to both parties. They should compensate fully without punishing the tortfeaser. Feelings of indignation at the tortfeaser’s conduct should not be allowed to inflate the award.

(ii) Awards should not be too low, as that would diminish respect for the policy of the anti-discrimination legislation. Society has condemned discrimination and awards must ensure that it is seen to be wrong. On the other hand, awards should be restrained, as excessive awards could, to use the phrase of Sir Thomas Bingham MR, be seen as the way to “untaxed riches”.

(iii) Awards should bear some broad general similarity to the range of awards in personal injury cases. We do not think that this should be done by reference to any particular type of personal injury award, rather to the whole range of such awards.

(iv) In exercising their discretion in assessing a sum, tribunals should remind themselves of the value in everyday life of the sum they have in mind. This may be done by reference to purchasing power or by reference to earnings.

(v) Finally, tribunals should bear in mind Sir Thomas Bingham’s reference to the need for public respect for the level of awards made.’”

18.In the present case, it is the claimant’s evidence that after paying the entrance fee, he spent about four hours inside the respondent’s club consuming free beverages, singing karaoke, dancing and throwing darts.  Although he enjoyed the facilities and services at the time (“享受於 Legends Club 消遣”), he feels disappointed and aggrieved (“失望和不滿”), angry and helpless (“憤怒和無奈”) and disappointed and distressed (“失望及困擾”) afterwards because:

(a) He was being treated unfairly by the respondent.

(b) The respondent has clearly breached the SDO and committed an unlawful act.

(c) In its correspondence with the Commission, the respondent denied discrimination and claimed that its pricing policy is a form of marketing strategy (“營銷策略”) which is common in the industry.

(d) The respondent refused conciliation offered by the Commission.

(e) Notwithstanding the media coverage of this case, the respondent has still refused to change its pricing policy.

19.Mr Cheung suggests an award of $50,000, citing the Court of Appeal decision in Yuen Wai Han v South Elderly Affairs Ltd [2005] 2 HKLRD 277.

20.I accept that hurt feelings are subjective in nature and incapable of objective proof. Nonetheless, I have to make a determination on the basis of the evidence as to whether the claimant has suffered any injury to his feelings as a result of the respondent’s discrimination (and, if so, the intensity thereof) for the purposes of this assessment. 

21.In its correspondence with the Commission, the respondent made the point that its pricing policy was openly displayed at the entrance of the club and its staff would invariably explain it to its patrons and that the claimant had paid the entrance fee knowing the price difference.  This is confirmed by the claimant.  He explains in his evidence that he began to feel hurt subsequently when he realised from the respondent’s website that the respondent is habitually charging males more than females. 

22.So on his evidence, the claimant did not suffer any injury to his feelings as a result of the “less favourable treatment” (ie the price difference) he received from the respondent.  He did not mind the price difference at the time and elected to patronize the respondent’s club nonetheless and had in fact enjoyed the facilities and services provided therein. 

23.The hurt feelings alleged by the claimant flow from the regularity (or frequency) of the respondent’s discriminatory act towards males which has nothing to do with the treatment he received on 28 July 2014.

24.Yuen Wai Han was concerned with pregnancy discrimination.  There, the Court of Appeal said (at [46]) that discrimination against a pregnant woman in whatever manner was extremely serious and the court would award substantial damages for injury to feelings (which should normally be no less than $50,000) in order to reinforce the court’s determination to protect pregnant women.  I do not think one can legitimately applies that judgment here.

25.As stated in the Commission’s letter dated 26 August 2014 to the respondent, participation in the conciliation process was on a voluntary basis.  According to the respondent (as stated in its correspondence with the Commission), the Commission arranged a conciliation meeting on 12 September 2014.  The respondent’s representative turned up but the claimant called in before the appointed time to say that he was unable to attend.  Thereafter, the claimant indicated to the respondent that he was too busy to meet.

26.The claimant explains at the hearing that he decided not to attend the meeting because there was no better offer from the respondent.  So as a matter of fact, it was the claimant himself who has called off the conciliation. 

27.That leads me to the claim for exemplary damages.  In his written submissions, Mr Cheung invites me to make an award to mark the court’s disapproval of the respondent’s conduct and to deter repetition of the discriminatory act.  He argues that although the claimant may not have suffered substantial injury, willful neglect of a legal obligation and continuation of an unlawful act is a serious matter and the court should mark its disapproval.

28.In Hong Kong, we have always followed the landmark decision of Rookes v Barnard [1964] AC 1129 on the law on exemplary damages: per Andrew Cheung J (as the CJHC then was) in A v Director of Immigration (False Imprisonment: Damages) [2009] 3 HKLRD 44 at [53(10)].

29.In Rookes v Barnard, Lord Devlin (with whom the other Law Lords agreed) said at p 1228 that:

“... the judge should not allow [a case for exemplary damages] to be left to the jury unless he is satisfied that it can brought within the categories I have specified.”

30.Pausing here for a moment, one of those specified categories is where “exemplary damages are expressly authorised by statute” (at p 1227).  Section 76(3A) of the SDO empowers the District Court to award “punitive or exemplary damages” when dealing with a claim of unlawful discrimination under Part 3 of 4 of the ordinance.

31.And Lord Devlin continued:

“In a case in which exemplary damages are appropriate, a jury should be directed that if, but only if, the sum which they have in mind to award as compensation (which may, of course, be a sum aggravated by the way in which the defendant has behaved to the plaintiff) is inadequate to punish him for his outrageous conduct, to mark their disapproval of such conduct and to deter him from repeating it, then it can award some larger sum.”

32.Recently, our Court of Appeal has taken stock of the subsequent authorities and reiterated the following “matters of principle” in Allan v Ng & Co (a firm) [2012] 2 HKLRD 160:

“[52]  The rationale for exemplary damages is not to compensate, but to punish. They are additional to an award which is intended to compensate a plaintiff fully for the loss he has suffered, both pecuniary and non-pecuniary. See, for example: A v Bottrill, supra at para 29 per Lord Nicholls; Kuddus, supra at para 51 per Lord Nicholls, para 95 per Lord Scott. This extract from Lord Nicholls’ judgment in A v Bottrill at para 20 would suffice:

‘The starting point for any discussion of the limits of the court's jurisdiction to award exemplary damages is to identify the rationale of the jurisdiction. This is not in doubt, although different forms of words have been used, each with its own shades of meaning. For present purposes the essence of the rationale can be sufficiently encapsulated as follows. In the ordinary course the appropriate response of a court to the commission of a tort is to require the wrongdoer to make good the wronged person's loss, so far as a payment of money can achieve this. In appropriate circumstances this may include aggravated damages. Exceptionally, a defendant's conduct in committing a civil wrong is so outrageous that an order for payment of compensation is not an adequate response. Something more is needed from the court, to demonstrate that such conduct is altogether unacceptable to society. Then the wrongdoer may be ordered to make a further payment, by way of condemnation and punishment.’

[53]  It is therefore important to distinguish the different roles of compensatory and exemplary damages. It may be easy to lose sight of this distinction if the court is to make a ‘combined award’ of compensatory and exemplary damages.

[54]  The second important thing, which follows from the rationale, is that exemplary damages are a remedy of last resort. This is the “if, but only if” test mentioned by Lord Devlin in Rookes v Barnard, supra at 1228...

[55]  The importance of this principle was emphasised by the House of Lords in Broome v Cassell & Co, supra at 1060A to D, 1082A to B, 1089D to E, 1104D to E, 1116C, 1121G to 1122A, 1126C to D. Applying the ‘if, but only if’ test, the question the court should ask is whether the remedies available to it are inadequate to punish and deter the defendant. It is only if the available remedies are inadequate to punish and deter the defendant for his conduct that exemplary damages should be considered.

[56]  Thirdly, awards of exemplary damages are governed by a principle of moderation and restraint, see Lord Devlin in Rookes v Barnard, supra at 1227 to 1228. Exemplary damages are ‘analogous to a criminal penalty’, so ‘principle requires that an award of exemplary damages should never exceed the minimum sum necessary to meet the public purpose underlying such damages, that of punishing the defendant, showing that tort does not pay and deterring others.’ (John v MGN Ltd [1997] QB 586 at 619F to G)”

33.Thus, the discretionary jurisdiction of the court is engaged where the defendant’s conduct is “outrageous” and I have to consider if the remedies available are inadequate to punish and deter the defendant from such conduct.

34.As to what amounts to “outrageous” conduct, Lord Nicholls gave the following elaboration in A v Bottrill at [23]:

“... in the nature of things, cases satisfying the test of outrageousness will usually involve intentional wrongdoing with, additionally, an element of flagrancy or cynicism or oppression or the like: something additional, rendering the wrongdoing or the manner or circumstances in which the defendant’s conduct outrageous.”

35.Taking the claimant’s case to its highest, the respondent has ignored these proceedings and the publicity this case has generated and continued with its discriminatory policy.  In my view, the respondent’s conduct must be viewed in the context that this is the first case in Hong Kong confirming that door discrimination is unlawful under the SDO.  Indeed, Mr Cheung (and the Commission instructing him) has been unable to adduce any authority discussing the legality of gender-based price disparity from other jurisdictions that have similar anti-discrimination laws.[1]

36.From the materials supplied by the respondent to the Commission (which has been placed before me), it is quite a norm for bars and clubs in Hong Kong to offer special discounts to its female customers.  The respondent claimed that at one stage, it had suggested to offer similar discounts to males but the offer was not taken up by the claimant.

37.One of the statutory functions of the Commission is to work towards the elimination of discrimination in Hong Kong (s 64(1) of the SDO).  And the Commission may undertake educational activities for the performance of its functions as it thinks fit (s 65(1)).  According to Mr Cheung, the Commission is in dialogue with representatives of the industry.  Nothing has been done to educate the industry and to give impetus for reform.

38.Furthermore, the Commission has the power to make recommendations under s 73 for the purposes of promoting equality and to issue enforcement notices under s 77 when it is satisfied that a person or an entity has committed any unlawful discriminatory act.  The respondent has not been slapped with (so to speak) any statutory recommendation or enforcement notice.  It would be difficult for the claimant to argue that the conduct of the respondent is “outrageous” in such circumstances.

39.The claimant has so far recovered nothing because:

(a) he has abandoned his claim for a declaration that the respondent was in breach of the SDO and for an order that the respondent changes its pricing policy;

(b) he has omitted to claim for the price difference; and

(c) he has failed to prove any injury to feelings.

It is not the case that the available remedies are inadequate to punish or deter the respondent.

40.Upon taking instruction, Mr Cheung has elected to abandon the claim for exemplary damages.

41.In my view, there is one more reason why an award of exemplary damages is inappropriate in the circumstances of this case.

42.Lord Devlin has emphasised in Rookes v Barnard at p 1227 that:

“I wish now to express three considerations which I think should always be borne in mind when awards of exemplary damages are being borne in mind when awards of exemplary damages are being considered. First, the plaintiff cannot recover exemplary damages unless he is the victim of the punishable behavior. The anomaly inherent in exemplary damages would become an absurdity if a plaintiff totally unaffected by some oppressive conduct which the jury wished to punish obtained a windfall in consequence.”

43.I do not regard the claimant as a true “victim” of the respondent’s discrimination.  He obtained what he had bargained for in terms of the enjoyment he derived from the facilities and services provided in the respondent’s club.  The injury to feelings he now claims to have suffered does not relate to the treatment he received on 28 July 2014.  In my view, the claimant would obtain a windfall if exemplary damages were ordered to punish the respondent and that would be absurd (to borrow Lord Devlin’s sentiment).

Disposition

44.For the above reasons, the claimant has failed to prove any damages notwithstanding the interlocutory judgment entered in his favour.

45.Mr Cheung asks for costs nonetheless.  He argues that the failure on the part of the respondent to take part in these proceedings and the fact that this litigation is funded by public fund constitute “special circumstances” for ordering costs against it.  I do not agree.

46.As provided in section 73B(3) of the District Court Ordinance, Cap 336, the general rule is that each party should bear its own costs unless the proceedings were brought maliciously or frivolously or that there are “special circumstances which warrant an award of costs”.  In my view, none of the arguments advanced by Mr Cheung amounts to “special circumstances” justifying a departure from the norm.  This is all the more so as the claimant has recovered nothing in terms of damages.

47.I shall order the claimant is to bear his own costs of the assessment. 

Mr Kam Cheung instructed by Equal Opportunities Commission for the claimant.

The respondent in person did not appear.