Yum Siu Wah v. Auto Italia Ltd

HCLA 14/2018

[2020] HKCFI 2965

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

LABOUR TRIBUNAL APPEAL NO 14 OF 2018

(ON APPEAL FROM LABOUR TRIBUNAL CLAIM NO 191 OF 2017)

________________

________________

Before:  Deputy High Court Judge Leung in Court

Date of Hearing:  12 February 2019

Date of Judgment:  27 November 2020

____________________

JUDGMENT

____________________

1.This is the claimant’s appeal against the adjudication of the Labour Tribunal in respect of his claim for compensation for rest days and commission after the termination of his employment with the defendant.

Background

2.The defendant was the authorized dealer of Maserati and Ferrari[1]. Both are luxury brands of cars.  In January 2012, the claimant joined the defendant as a sales executive.  A written contract of employment dated 6 January 2012 was signed by the parties (“the Employment Contract”).  Amongst other terms, the basic monthly salary of the claimant was HK$3,000, but there would be commission payments in accordance with the prevailing company policies.  The monthly salary was increased to HK$3,424 in 2016.  There was no dispute that the bulk of the claimant’s income from his employment was the commission[2]. The employment was terminated by the defendant by notice dated 12 July 2016.

3.The claimant filed his claim with the Labour Tribunal against the defendant for contractual payments in arrears and termination payments (Case No LBTC 191/2017).  The items of claim that eventually went to trial consisted of (i) commission; and (ii) rest day pay.

4.The claim was heard on various dates between early August 2017 and late May 2018.  On 25 May 2018, the Presiding Officer delivered her adjudication awarding the claimant part of his claim for commission and dismissing his claim for rest day pay.  Costs of the proceedings were awarded to the claimant.

5.Aggrieved by the adjudication, the claimant applied to this court ex parte for leave to appeal. The Presiding Officer provided her written reasons for adjudication on 28 August 2018 (“the Reasons”).

6.At the hearing on 5 September 2018, this court gave leave to appeal to the claimant on the grounds set out below.  Pursuant to that, the claimant filed his notice of appeal on 12 September 2019.

7.The appeal was heard on 12 February 2019.  Due to the dispute between the parties in respect of the status of an undated handwritten calculation sheet signed by the parties, and now labelled as the “agreed compensation in relation to the rest day claim” (“Calculation Sheet”)[3], this court directed the parties to adduce after the hearing the transcript of the relevant part of the proceedings before the Tribunal which would show how and on what basis the Calculation Sheet came to be adduced before the Tribunal. Leave was also given for any further submission in this respect to be lodged.

8.The relevant parts of the transcript were subsequently produced, yet not without argument between the parties.  That included the defendant’s summons filed on 15 March 2019.  Hence the hearing on 30 April 2020.  Further submissions were also lodged.

The principles

9.Section 32 of the Labour Tribunal Ordinance, Cap 25 (“LTO”) provides that an appeal against the decision of the Tribunal must either be on point of law or jurisdiction. Insofar as appeal on findings of fact is concerned, it is trite that the scope is limited.  Unless the appellant demonstrates palpable errors in such findings in the sense that the findings were unsupported by or contrary to the evidence or be such that no reasonable tribunal would have come to, the appellate court should refrain from intervening. See China Gold Finance Ltd v CIL Holdings Limited, CACV 11/2015 (27 November 2015).

Grounds of appeal

10.Leave was granted to appeal on the following grounds:

(1)  In respect of the claim for rest day, whether the Tribunal erred by failing to consider that the provisions under clause 5 of the Employment Contract contradicts section 17 of the Employment Ordinance, Cap 57 (“EO”) and were void pursuant to section 70 in the circumstances of this case;

(2)  In respect of the claim for commission for the 31 contracts procured or followed up by the claimant but were cancelled by agreement between the defendant and the customers after the termination of the claimant’s employment, whether the Tribunal erred by failing to find that, in the circumstances of the case the claimant’s entitlement to the commission had accrued and the commission payable upon the termination of his employment, irrespective of the cancellation of those contracts subsequent to the termination of his employment, and, if yes, the proper assessment of such commission;

(3)  Alternative to the 2^nd ground above, if the claimant’s entitlement to commission in respect of the 31 contracts has not accrued by the time of the termination of his employment, whether the Tribunal erred by failing to investigate and to find that in the circumstances of the case, it was a term of the contract of the employment implied by law that the defendant would use best endeavor to procure the performance of the 31 contracts with the customers, and thereby enabling the claimant to become entitled to his commission in respect of the 31 contracts subsequent to the termination of his employment; and if yes, whether the defendant was in breach of such implied term;

(4)  Whether the Tribunal was plainly wrong in her assessment of the commission that the claimant is entitled to:

(a)  in respect of sales contract items nos 6 and 21 by assessing on the basis that the customers under those contracts were old customers of the defendant at the time of the contract, such basis being contrary to the evidence;

(b)  in respect of the forfeited sales contract item no 16 by assessing on the basis of a percentage of the fixed commission that would have been payable had the contract not been repudiated by the customer, which represented the ratio of the forfeited deposit relative to the total price, such ratio being contrary to the respective cases advanced by the parties and per se incorrect as a matter of fact.

Ground (1)

11.It is argued on behalf of the defendant that this ground of appeal was not raised before the Tribunal, and therefore there is no basis for this court to entertain that on appeal.  I do not agree. Section 20(3) of the LTO prescribes the duty of the presiding officer to investigate any matter which he/she may consider relevant to the claim, whether or not it has been raised by a party.  Failure to do so, if established, may be impeachable on appeal.

12.As to rest day, section 17 of the EO provides for the entitlement of the employee in the following terms:

“(1) Subject to the provisions of this Part, every employee who has been employed by the same employer under a continuous contract shall be granted not less than 1 rest day in every period of 7 days.

(2) Rest days shall be in addition to any statutory holiday…”

13.Section 2 defines “rest day” as a continuous period of not less than 24 hours during which the employee is entitled to abstain from working for his employer.

14.Section 70 of the EO prohibits the contracting out of the employee’s right and entitlement under the Ordinance.  It says:

“Any term of a contract of employment which purports to extinguish or reduce any right, benefit or protection conferred upon the employee by this Ordinance shall be void.”

15.Clause 5 of the Employment Contract[4] says:

“Normal Office Hours

Your working hours are in accordance with the prevailing showroom opening hours and the duty roster established by the Sales Department.  In addition to the showroom duty as per the daily roster, you may be required from time to time to assist the Sales department in other functions, eg exhibitions, test drives, demonstrations, etc.  For proper performance of your duties under this Contract of Employment, you may be required to work in excess of duty times from time to time without further remuneration.”

16.The claimant argues that clause 5 of the Employment Contract contradicts section 17 in respect of his entitlement to rest day, and was therefore void pursuant to section 70.

17.The Reasons indeed show that the issue of whether clause 5 was void pursuant to section 70 was not raised or argued before the Tribunal.  What the parties argued, and the Presiding Officer decided, was whether the defendant was liable under section 17 for rest day pay as a matter of fact.  Now the question is whether clause 5 contractually deprived the claimant of his entitlement to rest day under section 17.  This is a matter of construction of clause 5.

18.It is trite that a contractual term is not to be construed by reference to its post-contractual performance as a matter of fact, but in the context and circumstances known to the parties to it at the time of contract.

19.Clause 5 was silent on rest day.  However, section 17 does not require designation of rest day in the form of written contract, and compliance with the section is a matter of substance. Unless the clause by its terms, properly construed, purported to extinguish or reduce the right, benefit or protection in respect of rest day conferred by the section, section 70 is not invoked.

20.The first part of clause 5 defined the working hours of the claimant, which would accord with (i) the opening hours of the showroom and (ii) the duty roster.  The claimant had to be on duty at the showroom in accordance with the duty roster.  Nothing in this part suggested any deprivation of the claimant of rest day.  How the duty roster was arranged might give rise to the issue of factual compliance with section 17, but not as a matter of contractual terms contravention of section 17.

21.The terms of the second part of clause 5 were duty-oriented.  It specified the duties other than showroom duty that the claimant would be required to perform.  As a contractual term, this part had nothing to do with the claimant’s entitlement to rest day. Literally, the provision was not geared towards depriving him of the rest day entitlement under section 17.

22.The last part of clause 5 specified that the proper performance of the claimant’s duties (showroom and non-showroom duties referred to in the first and the second parts of the clause) might require him to work in excess of duty times from time to time without further remuneration.  It is really this part which falls to be considered for the purpose of this ground.  The Presiding Officer did consider that, and rightly understood that to mean overtime work, which could happen on a working day or rest day[5].

23.As a matter of construction, the possibility of overtime work on a working day without additional pay would not impact on the claimant’s entitlement to rest day.

24.As to overtime work on a rest day, the Presiding Officer noted[6] that section 17(1) is expressly subject to, amongst others, section 20.  Section 20 provides for the freedom of the employer and the employee to agree on working on the employee’s rest day.  It says:

“Voluntary work on rest days

(1) An employee may, at his own request and if the employer agrees, work for his employer on a rest day.

(2) An employee may, at the request of his employer, work for his employer on a rest day.”

25.Section 20 should be read as distinct from section 19, which says:

“Compulsory work on rest days

(1) Subject to subsection (2), no employer shall require an employee to work on any of his rest days.

(2) An employee may require an employee to work on his rest day if it is necessary to do so by reason of a breakdown of machinery or plant or other unforeseen emergency of any nature.

(3) An employer shall substitute for any rest day on which an employee is required to work under subsection (2) some other rest day…”

26.For the purpose of this ground of appeal, the claimant does not say that clause 5 contradicts section 19.

27.Of the authorities cited by counsel, Yam Yui Wai & Ors v Wanchai Hsin Kuang Restaurant Co Ltd, CACV 1950/2001 (28 May 2002) is the only one that decided the issue of whether a term of the employment contract in respect of the right of the employee to rest day was void pursuant to section 70.  The case concerned the terms of the employment contract then commonly adopted by restaurant proprietors that allowed them to “purchase rest days” from the employees.  By the employment contract, the employee entered into the employment agreeing to work for the employer on 2 of the 4 rest days (in a month) and to take leave only with mutual consent.  The case went on appeal to the Court of Appeal.  Before the appellate court, the issue was whether such contractual term was void pursuant to section 70 of the Ordinance.

28.The appellate court referred to the ruling in the previous case of Hang Fook Lau Seafood Restaurant v Kwok Sek Yuen [2001] 2 HKC 69, which also concerned the restaurant employment practice.  The Court in Yum Yui Wai held that the parties may in principle enter into an agreement in respect of working on rest days, and it matters not whether or not the agreement was made when or after the employment contract was made^[7].  The crux is whether the relevant arrangement and agreement were entered into voluntarily and whether such arrangement and agreement purports to extinguish or reduce any right, benefit or protection conferred upon the employee by the Ordinance in respect of work days.  If the effect of the contract is such that the employee is left with no choice but to work on rest days, failing which he will be deemed to be in breach of the contract, that the provision will contravene section 70.  In the context of that case, the validity depends on whether the contract in question contains an implied term allowing the employee to vary or cancel the agreement to work on rest days after the commencement of employment.  The Court by majority ruled that the clause before them in fact left no room for such implied term, and therefore contravened section 70.

29.Leung Ka Lau & Ors v Hospital Authority, CACV 57/2007 (21 January 2008) was a case concerning, amongst other things, compliance with section 17 instead of infringement of section 70.  The relevant issue was the entitlement of the doctors to payment in lieu or compensation for the rest days on which they had to be on resident call or, if on non-resident call, had to return to work.  Such on-call duty was set out on a roster, and the doctors on such roster duty were subject to numerous constraints on their social and family life on such rest days.  The Court of Appeal upheld the finding of the judge that the Hospital Authority was in breach of its statutory obligations as regards such of the plaintiffs who had to be on such duty call. Such roster duty effectively deprived the employees of the crucial feature of the concept of the statutorily defined rest day, of which they had no choice. Such conclusion was not disturbed on final appeal[8].

30.Clearly, the circumstances of the cases mentioned above differ from the present case.  As mentioned, clause 5 should be construed in the context and circumstances known to the parties at the time of contract.  The present context is the agreement of a sales representative to the request of the employer that the former’s duties might require him to work on a rest day without additional pay.  Wong Pui Tuen Kenny & Anor v Crown Motors Limited, HCLA 108/2003 (30 November 2004) was such a case.  In Wong Pui Tuen, the motor company fixed duty rosters for weekend duties and public holiday duties, to which the salesmen agreed.  There was no agreement between the parties that the salesmen would be entitled to overtime payment for work on those rest days.  However, they would be remunerated by commissions on sales achieved when performing those rest day duties.  The Tribunal rejected the salesmen’s claim that they had no choice but to work on rest days, and found that the salesmen worked on those days in return for the opportunity to achieve more sales and to earn more commissions.  On appeal, the court found that on the basis of such factual findings, and where section 19 did not apply, the question of rest day pay was essentially a matter of contract between the employer and the employee.  As the motor company had not agreed to pay (on top of commissions on sales) overtime pay for the salesmen’ work on rest days, the latter could claim no entitlement to be paid rest day pay.

31.It can be seen that the Presiding Officer in the present case made effectively similar findings in respect of the circumstances of the present case as those in Wong Pui Tuen, after considering the evidence of both parties in this respect[9].  The findings were reasoned, when considered in the context of the present case.  At the time of contract, the claimant knew that his basic salary was modest and the bulk of his income was commission upon achieving sales, and thus the opportunities thereof, be those on a rest day or not, and he agreed to that.  As a matter of fact, the Presiding Officer, as she was entitled to so find, rejected the claimant’s assertion that he had no choice about that in the sense that if he refused to work on a rest day, if necessary, he would face disciplinary action or dismissal.  On the basis of such findings, which the Presiding Officer did make, I do not find that the claimant’s agreement to clause 5, allowed under section 20, was not an infringement of section 17 which would render the clause void pursuant to section 70.

32.All circumstances considered, including those discussed above, I do not find that the Presiding Officer erred on the ground of failing to consider this issue in her adjudication.

33.In respect of the claim for rest day pay, I would add that I have considered the transcript of the relevant parts of the proceedings which accounted for the adducing of the Calculation Sheet before the Tribunal and the further submissions.  I find that the claimant’s labelling of this document as the agreed amount of compensation in relation to the rest day claim is misleading.  By signing that document at the time, the defendant acknowledged that as the calculation of the rest day pay in accordance with the agreed average daily salary and the claimant’s alleged number of rest days.  The number of rest days asserted by the claimant remained in dispute.  Of course, in view of the conclusion in respect of this ground of appeal, the need to investigate into the number of rest days that the claimant has allegedly lost does not arise.

Ground (2)

34.Relevant to the claim for commission, the Presiding Officer first set out the stages of a sale and purchase of car transaction[10]. Essentially, the customer first entered into a provisional contract with the defendant to purchase the car and paid an initial deposit of not less than HK$400,000.  The evidence shows that the contract might specify the specific model of the car or alternatively simply replacement of apparently the current model or simply the future model.  The defendant would then place order with the manufacturer for the car.  After the manufacturer had confirmed the estimated manufacturing timetable for the car, the customer would sign a confirmation order in respect of his optional specifications for the car as well as pay the defendant a further deposit of not less than HK$400,000.  For the completion of the sale and purchase, the customer would sign the formal sale contract as well as pay (amongst others) the balance of the price to the defendant before the arrangement of insurance and licence as well as taking delivery of the car.

35.The evidence suggests that unless the model ordered happened to be in stock, it would normally take up to years after the provisional contract until the delivery of the car ordered.  The question of entitlement of the claimant to commission arose when his employment was terminated amidst different stages of each particular transaction which he had handled.  Hence the issue of accrual of such entitlement in respect of each of these transactions.

36.Upon the termination of the claimant’s employment, the defendant devised its calculation of the commission payable to the claimant in respect of each transaction in which he had been involved.  The claimant also put forward his categorization of those transactions and the extent of his entitlement to commission in each category. The Presiding Officer set them all out in the Reasons[11].

37.The category of transactions covered by this ground of appeal consisted of those that were cancelled by the defendant and the customers so that both did not get to complete the sale and purchase.  This category consisted of 31 contracts.  The claimant’s case in respect of those 31 contracts was that whilst the transactions were cancelled, the defendant had kept and benefited from the deposits paid by the customers.  He contends that the defendant was in a position to do so as a result of the contracts being concluded in the first place by the effort of the claimant.  Hence his entitlement to 100% commission from those contracts.

38.Regarding those 31 contracts, the Presiding Officer accepted the evidence of the defendant, and found that the deposits under 29 of them had in fact been refunded to the customers while the refund under the remaining 2 of them was then pending receipt by the customers upon the cancellation of the contract.  The claimant’s contention was rejected as a matter of fact[12]. The Presiding Officer was entitled on the evidence to come to her conclusion, and the claimant fails to establish that such finding was plainly wrong.  Such finding of fact is not impeachable on appeal.

39.The claimant also argued before the Tribunal that the defendant nevertheless benefited from the deposits in terms of their use in funding its operation during the interim before refund to the customers, and it was only fair that he should be entitled to his commission on those transactions.  However, the Presiding Officer expressly stated that she did not find that the defendant in fact used the deposits received to fund its operation[13]as alleged.  Again, this, as a matter of fact, is what the Presiding Officer was entitled to find on the evidence, and is not impeachable on appeal.

40.The Presiding Officer rejected the claimant’s argument, on the ground that generally the claimant’s entitlement to commissions accrued upon completion of the transaction between the defendant and the customer, unless the employment contract provided otherwise[14]. Upon cancellation of the transaction and the refund of the deposits to the customers, the defendant’s entitlement to commissions did not accrue.

41.Now the claimant argues that his contractual right to commission already accrued upon each stage of the transactions, namely the provisional contract and the specification order signed by the customer and procured by him, and therefore he should be entitled to commissions regardless of whether the transactions would be completed or cancelled afterwards.  He argues that the Presiding Officer erred in failing to consider his entitlement from this perspective.

42.The claimant asks whether the defendant had the policy at the relevant time of the termination of the claimant’s employment that cancellation of contract with the customer would deny him the commission in respect of the contract.  The question asked is not exactly right.  The question is whether the sale executive was contractually entitled to commission regardless of the cancellation of the transaction after the termination of his employment.  In answering the question, the Presiding Officer’s reasoning in respect of accrual of the entitlement to commission with reference to the completion of the transaction, mentioned above, cannot be faulted as a matter of law.

43.The claimant borrows assistance from the difference in the context of the defendant’s table of commission for the sales executive.  It is pointed out that in the table dated May 2016, there was express provision that should the transaction be cancelled for any reason, any pre-paid commission would be charged back from the sales executive.  It is suggested that the lack of such remark in the applicable table of commission dated January 2016 was indicative of the lack of policy denying the sales executive’s entitlement to commission by reason of the cancellation of the transaction subsequent to his departure.

44.I do not agree that reference to existence of such term subsequent to the claimant’s departure lends him the assistance as suggested.  Such term literally was premised on the “pre-payment” of commission prior to the completion of a transaction, in which case the commission paid would become returnable by the sales executive to the defendant.  If anything, the lack of such express term governing the employment between the claimant and the defendant would have meant that the latter would lack the contractual basis for recouping any pre-paid commission in the event of cancellation of the transaction before completion.  There was no issue of prepaid commission prior to completion between the parties in the present case.

45.It is argued that the defendant acknowledged that the sales executive would be entitled to a certain percentage of the commission in remuneration of his effort in bringing about the transaction, though he was no longer in employment when the car was taken delivery of.  However, this does not support the claimant’s argument for the claim on a quantum meruit basis.  Where the sales executive left the defendant after the signing of the provisional sale contract, the transaction would be followed up by another sales executive.  The percentage shares of the commission between the successive sales executive might indicate the relative significance of different stages of the transaction that they respectively handled.  However, this must still be premised on the entitlement to the payment of commission to both sales executives, which, the Presiding Officer found, hinged upon the completion of the transaction.

46.It should also be noted that this category of transactions that were cancelled by the contracting parties was indeed treated differently from the category of transactions that were unilaterally not completed by the customers.  The latter was effectively repudiation by the customers, as a result of which the defendant would be entitled to forfeit the deposits paid pursuant to the provisional sale contract (clause 12.1).  In respect of this category of transactions, the Presiding Officer indeed found that the claimant should be entitled to his commission[15].  This is also the category of transactions in question under Ground (4)(b) below, whereby the claimant only challenges the Presiding Officer’s assessment of the commission payable.

47.The other equity arguments in the general terms of the disadvantaged position of the claimant, sense of fairness and the consideration of clean break, in my judgment, could not override the consideration of the entitlement of the claimant as a matter of contract.  In any event, the factual circumstances were placed before the Presiding Officer, and it is not shown that she was plainly wrong in coming to her conclusion in these circumstances.

Ground (3)

48.This is an alternative ground to (2) above.  Essentially, it is argued that the Tribunal should have investigated whether there should be a term implied to the Employment Contract as to the duty on the part of the defendant to use its best endeavour to complete the sale and purchase with its customers so to enable the claimant to earn his commission.  Indeed, that was neither argued by the parties nor investigated by the Presiding Officer at her initiative.

49.In my judgment, one need not dispute the claimant’s argument in terms of principle.  However, it is as a matter of fact unrealistic to argue that the defendant was in breach of the alleged implied term in the circumstances of this case.  As found, the claimant’s contractual entitlement hinges upon the successful sales or completion of the transactions.  There were all the reasons for the defendant to complete the sales in order obtained its side of the bargain from its customer.  It is simply unrealistic to suggest that the defendant was in breach of the duty to use best endeavour to secure the completion of the transactions purely from the perspective of the claimant’s entitlement under the Employment Contract, as if this might not align with the defendant’s own commercial interest in doing so.  This alternative ground fails.

Ground (4)(a)

50.This ground relates to the claimant’s entitlement to a fixed commission on a completed transaction[16], the rate of which depends on whether the customer was an old or a new customer.  The former would attract fixed commission of HK$10,000 whereas the latter would attract fix commission of HK$15,000[17]. Of this part of his claim, and with the claimant’s concession during the proceedings, the disputed categorization of the customers of the relevant transactions boiled down to 4 contracts before the Tribunal[18].  The Presiding Officer’s finding in respect of 2 of those contracts now forms the subject matter under this ground of appeal.  These two are referred to as contract items nos 6 and 21[19] in the proceedings.  The Presiding Officer found that these two customers were old customers at the time of the contracts respectively.  The claimant disagrees, and argues that such finding was contrary to the evidence.

51.Regarding the categorization of a customer as an old or new one for the present purpose, the Presiding Officer considered the evidence adduced by both parties, including the customer information adduced by the claimant and the computer record adduced by the defendant.  It is important that she noticed the incompleteness of such documentary evidence, and was on guard about that before coming to her findings[20].

52.Regarding contract item no 6, whereby the customer purchased Ferrari 488 GTB in 2016, the Presiding Officer found that the customer was an old customer, in view of the defendant’s record that the same customer had bought an earlier Ferrari 458 Italia back in 2011.  Now it is argued that the Presiding Officer got the evidence wrong in that the contract for the purchase of the 488 GTB was in fact dated 2010 and thus prior to that for the purchase of the 458 Italia.

53.The claimant apparently bases his argument on the arrangement of the defendant’s contract number, which in this case was FER-10-70 and suggested that the contract for the purchase of the 488GTB was entered into in 2010.  However, the defendant’s computer record and documents[21] suggest that the 458 Italia was registered in May 2011 but not the date when the contract for that car was first entered into.  Referring to the sequence of the models[22] and the documents, which, as mentioned, the Presiding Officer noticed contained incomplete information, it will be dangerous for this court in the circumstances to conclude that the Presiding Officer must be wrong in her finding in this respect.  The Presiding Officer was entitled to come to the finding as she did in the circumstances.

54.Regarding contract item no 21, the Presiding Officer noted from the defendant’s record that the same customer had purchased a Maserati in 2010 and thus an old customer at the time of this contract.  The claimant argues that Maserati is another make and not a model of Ferrari, and ought not to be counted for such purpose.  He argues that this was inconsistent with how the Presiding Officer explained her differentiation between old and new customers.

55.In the Reasons[23], the Presiding Officer was weighing the parties’ respective contentions in respect of how to differentiate between old and new customers for the purpose of the rate of fixed commission[24]. The Presiding Officer agreed with the claimant that the applicable rate should depend on whether the customer has ever bought a Ferrari before as opposed to the defendant’s contention that it depended on whether its computer record showed information about the same customer.  The Presiding Officer did not prefer the defendant’s contention because the information about the same customer in the defendant’s computer record might have nothing to do with purchase of Ferrari but other services such as repair and purchase of souvenirs, and it would be unfair to the sales executive to scale down his entitlement to the fixed commission on the basis of prior transaction of such nature with that customer.

56.In other words, the focus of the Presiding Officer was quite clearly whether the customer had purchased a vehicle, as opposed to other goods or services, from the defendant, instead of whether the vehicle previously purchased from the defendant was of the specific make of Ferrari as opposed to Maserati.  This is also evidenced by her consideration of contract no item 12[25], which involved the purchase by the relevant customer of a Maserati in 2016, which was subsequent to the contract in question entered into in 2010.  Hence a new customer.  Had the Presiding Officer been wrong as alleged, the comparison in respect of this contract would also have been irrelevant and incorrect, as that involved cars of different makes.  Probably because of her conclusion in respect of contract item no 12 that was favourable to the claimant, he apparently found it unnecessary to argue about the Presiding Officer’s treatment of this contract as well.

57.In the circumstances, properly understanding the Presiding Officer’s reasoning, I do not agree that her categorization of the customers under contracts items nos 6 and 21 respectively was plainly wrong.

Ground 4(b)

58.During the discussion of ground (2) above, contract no item 16 was mentioned.  That is the contract covered by this ground.  The customer did not complete by taking delivery or payment.  On the basis that the defendant claimed to be entitled to forfeit the deposit in the sum of HK$1,000,000 paid by the customer, the Presiding Officer considered that the claimant should be entitled to his commission.  The Presiding Officer assessed the commission payable to the claimant to be HK$7,764[26].  The claimant appeals the Presiding Officer’s adjudication on the quantum.

59.In the submission on its behalf, the defendant suggests that the Presiding Officer was wrong in assuming that the deposit had been forfeited.  The defendant seeks to adduce evidence arising subsequent to the decision of the Tribunal that shows that the dispute between it and the relevant customer was still proceeding to arbitration, and invites the court to conclude that the claimant should not be entitled to commission on this contract at all.

60.In the absence of leave to appeal, particularly on a ground different from that relied on by the claimant in his appeal, the defendant is not in a position to challenge the decision of the Tribunal as if it were allowed to ride on the claimant’s appeal to do so.  The conscious decision of the defendant, as it confirmed during the present hearing, not to appeal effectively shuts the door for its attempt to make its point.  During the hearing, counsel for the defendant eventually confirmed that in this appeal, the defendant would stand by the adjudication of the Tribunal in this respect.

61.The Presiding Officer based her assessment in respect of this contract on the commission scheme issued by the defendant in January 2016 mentioned above, which the parties agreed to adopt before the Tribunal.  The fixed vehicle commission for the relevant model under this contract would be HK$40,000, had the contract been completed.  She considered that the deposits of HK$1,000,000 forfeited represented 19.41% of the total price of the car in the sum of HK$5,151,614.85.  She decided that the claimant should also be entitled to the same percentage of the fixed vehicle commission.  That gave the sum of HK$7,764.

62.When the relevant provisional sales contract was entered into in May 2015, the then estimated net price of the car was HK$2,290,000.  The estimated first registration tax and total price were then to be confirmed.  The amount payable was ascertained when the defendant in due course issued to the customer the formal sale contract in June 2015, which varied the net price to HK$2,436,300.  Adding the first registration tax in the sum of HK$2,715,314.85, the total price became HK$5,151,614.85.  Net of the deposit, the total amount payable by the customer to the defendant would have been HK$4,151,614.85.  The relevant documentary evidence tells all those.

63.Essentially, the Presiding Officer awarded the claimant with pro rata fixed commission in respect of this contract.  The claimant argues that such calculation was perverse and contrary to the respective cases advanced by the parties.  The parties are said to have differed as to the appropriate percentage of the fixed commission (HK$40,000) that the claimant should be entitled to.  Upon finding that the claimant should be entitled to such commission, he argues that the percentage should either be that proposed by him or alternatively that proposed by the defendant.  As neither party contended that such percentage should represent the ratio between the amount of the deposit and the price of the car, the Presiding Officer was wrong in her assessment.

64.The fixed commission would have been payable, had the customer completed by taking delivery and paying the full value of the transaction to the defendant.  The basis for the Presiding Officer’s assessment reflects that she did not agree that the claimant should not be entitled to full or his contended percentage of the fixed commission, when the fact was that the relevant transaction was not a success, albeit due to the customer’s failure.  She effectively aligned the pro rata commission with the percentage of value obtained from the transaction by the defendant.  Whilst understanding the argument of the claimant, I would be slow to accept that in refusing to accept that the claimant should be entitled to the fixed commission in full or at the percentage contended by the parties, when the defendant in fact did not receive the full value from the transaction, the Presiding Officer must be perverse or plainly wrong in terms of finding of fact.

Conclusion and order

65.The appeal is dismissed on all grounds with costs to the defendant, including costs reserved (which include the costs of the defendant’s summons filed on 15 March and the hearing of it on 30 April 2019 mentioned above).  Costs shall be taxed, if not agreed.  In the absence of application in 14 days to vary, this nisi costs order shall become absolute without further order of the court.

Mr Albert Yau and Mr Matthew Lai, instructed by Lau, Chan & Ko, for the claimant (appellant)

Ms. Cindy Kong of Howse Williams, for the defendant (respondent)