Sung Tsang-tung v. Maker Internation Enterprises Corporation (A Firm)

CACV000038/1979

Damages for breach of contract of employment - mitigation - no duty to mitigate until contract actually repudiated.

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Coram: Huggins, J.A., Cons and Yang, JJ.

Date of Judgment: 22 November 1979

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JUDGMENT

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Huggins, J.A. :

1. This is an appeal against a decision of a registrar assessing damages in a case which has had an unfortunate history, a history which was alluded to by this court in a previous appeal.

2. The contract which is in issue is a contract of employment for a term of six years - a contract by the Defendants to employ the Plaintiff. The contract was to start on the date on which he left the United States of America, a date which has clearly been fixed as 18th February 1972. The Statement of Claim alleged a breach of this contract. Para. 4 of the Statement of Claim is unfortunately ungrammatically drafted and, as a result, is not entirely clear. The facts as proved and as found by the learned Registrar were that the Plaintiff, having spent two days en route from the United States in Taiwan, arrived in Hong Kong to find that the employment which he had undertaken was not yet available. He was originally to have gone to Indonesia to a new factory which had not in fact been set up yet. He stopped in Hong Kong and for a period of some four months he remained here, discussing with the Defendants what was going to happen. During that period he received no salary. At the end of the four months he was informed that the contract was at an end and that he would not be employed. He then did nothing, according to the Registrar, to find alternative employment, and he claimed damages for breach of the contract.

3. I think that it may well be necessary that the Statement of Claim be amended in order to do justice in the present case, and I would give leave as may be necessary for that purpose.

4. The Registrar granted damages assessed at two months' salary. He did that on the basis that on arrival in Hong Kong it should have been obvious to the Plaintiff that the job was never going to be forthcoming, and that he should immediately have started looking for other employment. He must have thought that the Plaintiff would have found a job within two months. Nevertheless, as it seems to me, the Plaintiff was under no obligation to start looking for a job until the contract was repudiated and on the Registrar's findings it was not repudiated until four months after the Appellant arrived in Hong Kong. The precise date we do not know. I take the proper approach to this case to be that the Plaintiff should have had four months' salary, that the contract then having been repudiated he was not entitled to damages in a sum more than the salary he would have earned during the period before he could mitigate his loss. The Registrar has said that two months was an appropriate period and I do not think that we can disagree with that conclusion. That being so, I think the Plaintiff should get the salary for the first four months as unpaid salary and the equivalent of two months' salary as damages for breach of contract subject to the deduction of a sum of HK$400 (the currency of the contract was United States currency) which was earned during the final month by the Plaintiff in other employment.

5. There is then the question of interest and costs, both of which were refused by the Registrar. With respect to him I do not think that there is any good reason for refusing either interest or costs. We have no grounds for his refusal given in the Registrar's written reasons, but we are told in the Notice of Appeal - and this seems to be accepted by counsel - that the reason for the refusal of costs was that the reassessment was necessary owing to the fault of the Registrar and not of the Defendants. With respect, I do not think that is a sufficient reason. The fault was neither the fault of the Plaintiff nor of the Defendant and I think that the costs have to be paid by the unsuccessful party. Therefore, I would order that interest be paid at the rate of 8% from the date of the writ until payment and that the Appellant have the costs of this appeal and in the court below.

Cons, J. :

6. I have come to the same conclusion. I think the appeal should be allowed and the further damages reassessed for the reasons given by my Lord President in the sum of US$12,000 less the equivalent at the date of payment of HK$400. The Plaintiff to have his costs here and below and interest, which I think should run on all the damages, as from the date of the writ.

Yang, J. :

7. I too have arrived at a similar conclusion. I might add that it is suggested by counsel for the Respondents that two months was a fair period in which the Appellant should look for alternative employment and there was no dispute on that on the part of the Appellant.

22nd November 1979.