Eventmaster Ltd v. Chen Hiu Kwan and Others
Read the full judgment text of HCA 735/2021 on BabelCite. This High Court CFI judgment was delivered on 16 June 2026.
1. In these proceedings, the Plaintiff (“ Eventmaster ” or “ P ”) claims against Chen Hiu Kwan (“ Matthew ” or “ D1 ”), Ngai Chung Ni (“ Jenny ” or “ D2 ”), Episode Limited (“ Episode ” or “ D3 ”) and Cheung Mong (“ Eugenie ” or “ D4 ”) (together “ Ds ”) for inter alia breaches of duties for diversion of business opportunities away from P. In short, whilst employed by P, D1 and D2 incorporated D3. P says that D1 and D2 engaged in a competing business via D3 before leaving P’s employment and, aft
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HCA 735/2021 [2026] HKCFI 3380 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 735 OF 2021 __________________ BETWEEN
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_______________ J U D G M E N T _______________ A. Introduction 1.In these proceedings, the Plaintiff (“Eventmaster” or “P”) claims against Chen Hiu Kwan (“Matthew” or “D1”), Ngai Chung Ni (“Jenny” or “D2”), Episode Limited (“Episode” or “D3”) and Cheung Mong (“Eugenie” or “D4”) (together “Ds”) for inter alia breaches of duties for diversion of business opportunities away from P. In short, whilst employed by P, D1 and D2 incorporated D3. P says that D1 and D2 engaged in a competing business via D3 before leaving P’s employment and, after their departure, they induced D4 (who remained employed by P) to work for D3 and provide confidential information to D3, until D4’s service was terminated by P upon discovery of the scheme. P’s causes of action include breach of duties under employment contract, breach of fiduciary duties, breach of confidence, dishonest assistance, inducement to breach of contract and conspiracy to injure by unlawful means, amongst which the causes of action of dishonest assistance, inducement to breach of contract and conspiracy to injure are directed against D1 to D3 only. 2.Ds used to be represented by the same law firm with one set of pleadings filed for them. D1 (Matthew), D2 (Jenny) and D4 (Eugenie) made witness statements for themselves, and also for D3 (Episode). However, only D4 remained legally represented at trial. D2 appeared in person, whilst D1 and D3 were absent at trial. As a result, D1’s witness statements are not admitted as evidence. Whilst D2 and D4 purported to give evidence for D3 in their witness statements, neither of them represented (or was authorised to represent) D3 at trial. According to D2, D3 ceased business operation since August 2024. 3.As D2 appeared in person, I directed that the trial be conducted in Chinese, save that the parties may lodge written submissions in English. In the end, Mr Wou for P and Mr Jeffrey Lai for D4 have lodged closing submissions in English, whilst D2 has lodged closing submissions in Chinese. B. Salient Background 4.Much of the salient background here is not in dispute. For ease of reference, they are set out here, based primarily on documentary evidence and the written closing submissions of the parties. As regards other factual disputes, they would be addressed later as part of the analysis of the case. 5.Eventmaster (P) is and was a company incorporated in Hong Kong on 6 January 2015 which carries on business as service provider in technological support in relation to organisation and management of events. Mr Tong Chin Chiu (“Tony”) is Eventmaster’s sole director and Mr Yip Chun Ching (“Johnathan”) is its consultant. 6.By 2019, Eventmaster had business dealings with, inter alia, the following corporate clients or event agencies (“P’s Clients”):
7.As regards Ds:
8.It is Ds’ case that Matthew and Jenny need only give one month’s notice and their employment with Eventmaster ended after 14 August 2019 and 13 August 2019 respectively. At trial, Jenny contends that her last date of employment should be 14 August 2019 (instead of 13 August 2019). On the other hand, P disagrees and contends that Matthew and Jenny were employed by Eventmaster until 31 August 2019 and 30 September 2019 respectively. 9.In the case of Eugenie, there is no dispute that she remained employed by Eventmaster until 29 May 2020. 10.In a nutshell, it is P’s case that:
11.On the other hand, Ds’ stance may be summarized as follows:
12.In short, the following are in dispute:
13.On the question of duties, Mr Jeffrey Lai accepts on behalf of Eugenie that she owed contractual duties to Eventmaster during her employment, including express terms and an implied duty of fidelity. What remains in dispute is whether Eugenie (and similarly Matthew and Jenny) owed fiduciary duties and applicable duty of confidence to Eventmaster. 14.On the question of breach of duties, the parties have addressed the allegations pertaining to each client and/or agent in turn. For instance, in the case of Eugenie, P alleges that she breached her duties in relation to different existing or potential clients and/or projects of Eventmaster, namely:
15.On behalf of Eugenie, Mr Jeffrey Lai says that the Court should address the following issues separately with respect to each individual client:
16.In principle, I agree that this is the proper approach, in considering both liability and quantum. That said and where appropriate, it would remain helpful to consider, in general or as a starting point, whether Matthew, Jenny and Eugenie had acted in breach of duties owed to Eventmaster. C. Witnesses 17.There are four factual witnesses, namely Tony and Jonathan testifying for P, and D2 and D4 testifying for themselves. They have each made two witness statements. Whilst I would deal with their evidence in the analysis of the case, I would at this juncture make some overall observations. C1. Tony 18.Tony came across as an honest and forthcoming witness. 19.To begin with, there is no counterclaim made against Eventmaster. Nor are there any serious allegations made against Tony personally either. The merits of P’s case turn primarily on the conduct of Ds as alleged wrongdoers. The conduct of P (and those representing P) is not really the focus. 20.On the whole, Tony’s evidence is fair and measured. He readily made concessions where appropriate. For instance:
21.The above are by no means exhaustive but the point is that he gave direct and forthcoming evidence, even if such evidence may militate against P. 22.Moreover, Tony remained unshaken in cross-examination. In particular, he firmly maintained that he never asked Eugenie to probe information from Episode, let alone leaking Eventmaster’s information in exchange. Tony’s account is consistent with contemporaneous evidence. As may be seen from the transcript of the first meeting on 29 May 2020 (“1st Meeting”), initially none of Karis, Erik and Eugenie admitted their interest or involvement in Episode. It was not until they were confronted with company search records of Episode that they admitted the same at the 1st Meeting. Despite that, Eugenie still sought to downplay her role. If, as alleged, Eugenie was instructed by Tony to probe, there would have been little reason why she did not put that on record. C2. Jonathan 23.Jonathan’s role is that of a consultant. He provided advice on sales and operations of Eventmaster. 24.During cross-examination, Jonathan was questioned extensively in relation to the second meeting held on 29 May 2020 which he, Eugenie, Tony and Terry (a person in the legal field) attended (“2nd Meeting”). His testimony is consistent with the video recording of the 2nd Meeting, part of which has been played in open court. C3. Jenny / D2 25.Jenny came across as a rather defensive and evasive witness. 26.To start with, Jenny was adamant that her last day of employment with Eventmaster was 14 August 2019 (although her pleaded last day of employment was 13 August 2019) and that she only pursued a competing business afterwards. This appears to be a highly artificial argument, which is put forth to justify conduct that is otherwise problematic. Even on her own case, she was still working for Eventmaster after 14 August 2019 (albeit on a part-time basis until 30 September 2019) and yet engaging in a competing business via Episode in parallel. At the very least, this amounts to conduct which is commercially questionable, if not also unethical. 27.Jenny’s case on her last employment date flies in the face of contemporaneous documents. Contrary to her assertion, the contemporaneous salary payment slips and MPF payment documents suggest that she remained employed by Eventmaster until 30 September 2019. 28.Moreover, it is inherently improbable that Matthew and Jenny incorporated Episode in April 2019 but did not pursue any competing business for a few months during April to August 2019. There seems to be little reason why they had to incorporate a corporate vehicle a few months in advance. To the contrary, it would appear that Episode commenced its business at least by July 2019 (if not earlier). As pointed out by Mr Wou on behalf of P, in Episode’s invoice issued to PAG on 17 September 2019, the quotation number shown on the invoice is “PAGQ20190717_PAG _1.3”. I agree with Mr Wou that the date of quotation is embodied in the quotation number set out in Episode’s invoices issued to P’s Clients. It follows that Episode issued a quotation to PAG on 17 July 2019. That makes sense as it would take time for the quotation to be accepted by PAG and for works to be carried out by Episode, before an invoice was issued to PAG two months later. This undermines Jenny’s version of events that she did not engage in any competing business via Episode before August 2019. 29.Indeed, Jenny appears rather evasive when she was questioned about the date of the quotation issued to PAG. She said she did not recall its date. In a similar vein, when questioned about the date of other Episode’s quotations to AXA, HK Land and Prada, she claimed that she did not know or did not recall, although she could not rule out they were issued in July 2019. One must not forget that Jenny was a 20% shareholder and also a director of Episode. The totality of her evidence is that she did not know much about what Episode might or might not have done before August 2019, which seems rather artificial and incredible. It is not going to assist for Jenny to shift the blame to Matthew because, as business partners and co-director, it seems unreal to suggest that she had no knowledge or recollection of what Episode had done, or what Matthew had procured Episode to do. 30.Moreover, given that she was a shareholder and director, and that Ds were represented by the same law firm at one stage, Jenny (or Ds) should be in a position to disclose these quotations, but they never disclosed them in this action. This tends to suggest that the quotations, if disclosed, would likely undermine Jenny’s case and demonstrate that the quotations were indeed issued in July 2019. 31.On the whole, I have great reservations over the evidence of Jenny. In the premises, I would prefer the evidence of Tony and Jonathan insofar as the evidence of Jenny conflicts with the same. C4. Eugenie / D4 32.Eugenie came across as a timid and reserved witness. On one view, it may be said that she does not appear to be a dishonest witness. However, the Court should not attach too much weight to the demeanour of a witness. Moreover, one must not forget that, even on P’s case, it was Matthew and Jenny who took the initiative to set up a competing business, and Eugenie was only approached subsequently by Matthew to assist in diverting business or business opportunities to Episode. Eugenie was never said to be the mastermind or perpetrator of the scheme to begin with. 33.On the whole, Eugenie’s case and evidence do not sit well with contemporaneous documents. 34.A central theme of Eugenie’s defence is that she acted with the consent and instructions of Tony. She said Tony asked her to probe Matthew and Jenny for Episode’s information in exchange for Eventmaster’s information as a bait. However, Eugenie mentioned nothing of this sort when she was questioned over her dealings with Episode, whether during the 1st Meeting or the 2nd Meeting on 29 May 2020, which undermines her case. To the contrary, one can see from the transcript of the 1st Meeting that Eugenie sought to distance herself from Episode, alleging she never heard of it till May 2020. This does not tally with her current defence that she was specifically instructed by Tony to probe into the affairs of Episode. 35.Moreover, Eugenie alleged in her witness statement that Jonathan and others detained her in one of the bosses’ room at the 2nd Meeting and they took away her mobile phone and denied her any access thereto. This is a rather serious allegation by Eugenie. Yet, as can be seen from the video recording of the 2nd Meeting, Eugenie’s mobile phone was not taken away, and she was the last one to leave the room following the 2nd Meeting. Whilst Mr Jeffrey Lai sought to brush aside such discrepancies on account of lapse of time, emotional distress and late discovery of P’s video recording, the fact is that Eugenie was fired at the 2nd Meeting and it seems rather unlikely she would have forgotten what had happened. The discrepancies thus suggest she was making up stories to create excuses for her failure to deny or refute P’s allegations at the time. 36.Importantly, Eugenie’s testimony is incoherent and unconvincing. When queried over the circumstances in which Tony allegedly asked her to probe, she said that Tony gave her those instructions on one occasion when Tony talked to her in the office. She said the meaning of “probing” meant “to seek help” from Matthew and Jenny. Even if one is to accept her evidence, that would at most suggest that Tony told her to ask Matthew and Jenny for help as ex-colleagues. It is a quantum leap to equate this with alleged instructions to Eugenie to probe Matthew and Jenny for Episode’s information. 37.When pressed further in cross-examination, Eugenie said there were multiple occasions where Tony asked her to seek help from Matthew and Jenny, each time on a different project. Yet subsequently, she said that Tony told her to probe for information (“攞料”) instead of seeking help. Apparently, Eugenie realised that her assertions of Tony asking her to seek help do not really justify her acts, and she struggled to present a coherent version of events. 38.Worse still, when confronted with documentary evidence such as WhatsApp messages between Matthew and herself, Eugenie had no alternative but to concede that she agreed to have a part-time job with Episode in May 2020. In an attempt to reconcile such unfavourable evidence, she went so far to boldly assert she was only “pretending” to work for Episode. This is despite her concessions in cross-examination that she drafted quotations of Episode for Matthew’s approval. With respect, her stories simply do not add up. 39.On the whole, Eugenie’s evidence is incoherent and unconvincing. I would prefer the evidence of Tony and Jonathan insofar as the evidence of Eugenie conflicts with the same. C5. Matthew / D1 40.Matthew was absent from trial and did not testify. No explanation has been given as to why he did not come forward. Given P’s allegations and evidence, one would expect Matthew to testify. In the absence of a satisfactory explanation, I am prepared to draw adverse inference against Matthew. D. Duties to Eventmaster D1. Duration of Employment of Matthew 41.Matthew was absent at trial. However, this does not mean that the Court would automatically rule in favour of Eventmaster. Instead, the Court must still consider the relevant issue and evidence fairly and properly. 42.It is Matthew’s pleaded case that he tendered his resignation on 15 July 2019 and his employment lapsed after 14 August 2019. However:
43.Even if Matthew had to give one month’s notice to resign, there is nothing to stop him from giving a notice exceeding one month. It follows that Matthew could validly give a notice (exceeding one month) on 17 July 2019 to terminate his employment after 31 August 2019. 44.The above is borne out by contemporaneous documents anyway:
45.In the premises, Matthew remained employed by Eventmaster until 31 August 2019. D2. Duration of Employment of Jenny 46.On the evidence, it is not in dispute that Tony (on behalf of P) and Jenny orally agreed that Jenny should work on a part-time basis so that she could have more flexible hours to take care of her family. Nevertheless, Jenny’s position and responsibilities remained unchanged, and she would continue to earn base salary and commission (being 10% of sales), save that her base salary was revised to HK$10,000 per month starting from 1 September 2019. 47.Jenny’s main argument is that the above oral agreement was not reduced into writing. In her closing submissions, Jenny relies on section 5 of the Employment Ordinance (Cap. 57) (“EO”) and contends that, without a written contract setting out the new terms of her employment, such contract could only be a contract for one month, and hence her last day of employment was 14 August 2019. She further argues that, after 14 August 2019, she was not obliged to comply with the duties in her original employment contract. 48.With respect, such argument is misconceived. 49.First of all, an employment contract could be an oral agreement pursuant to section 2 of EO. Section 5 of EO further provides that:
50.Hence, whilst the employment contract containing the new terms has not been reduced into writing, the result is merely that such contract was deemed to be a contract for one month renewable from month to month. It is not the case that the contract would automatically lapse after one month. 51.In fact, it was not until 6 September 2019 that Jenny tendered her resignation to Tony by WhatsApp and said that her last day of employment would be 30 September 2019. It follows that Jenny’s employment with Eventmaster continued until 30 September 2019. 52.Secondly, the above is borne out by contemporaneous documents:
53.In the premises, Jenny remained employed by Eventmaster until 30 September 2019. D3. Express Contractual Duties 54.It was provided in the express terms in the employment contracts between Eventmaster and each of Matthew, Jenny and Eugenie as follows:
55.The above is not disputed by Ds. D4. Implied Duty of Fidelity 56.It is well established that an employee owes a duty of good faith and fidelity to his employer during the subsistence of the employment: see e.g. Green Light Multiplex Co Ltd & Anor v Lam Shi Yan & Anor [2024] HKCFI 2101 at [68], citing Chitty on Contracts: Hong Kong Specific Contracts, Vol.1 (7th edition (2022) at Chapter 12). 57.On behalf of Eugenie, Mr Jeffrey Lai accepts that she owed an implied duty of fidelity to Eventmaster during her employment therewith, but he contends that scope of such duty is in dispute. Among others, he argues that the extent of the duty will depend on the facts of each case, such as the seniority of the staff. Further, he stresses that legitimate preparatory steps for alternative employment do not amount to breaches of the implied duty of fidelity. 58.Whilst I have no quarrel with the above, it remains helpful to lay down some concrete parameters. In this regard and with some modifications, I agree with Mr Wou that the implied duty of fidelity and good faith owed by Matthew, Jenny and Eugenie would encompass the following:
D5. Fiduciary Duties D5.1 General principles 59.The general principles on fiduciary duty have been helpfully summarised by Ma J (as he then was) in Kao Lee & Yip v Koo Hoi Yan & Anor [2003] HKLRD 296 at [36]-[52], [57], [71]-[76] (see also Union Knopf (HK) Ltd. v Marcel Sossnowski & Anor, DCCJ 680/2010 (20 November 2013, unreported) at [15]-[17]). Among others:
60.In the case of employees, fiduciary (as well as other) duties owed to the employer may be set out in written form in the contract of employment, such as clauses regarding confidence in the employment contracts. In determining whether an employee who is not a director might owe fiduciary duties, an analysis is required as to whether in all the circumstances, and by reference to the specific contractual obligations, the employee has undertaken to act solely in the employer’s interests: Green Light Multiplex Co Ltd & Anor v Lam Shi Yan & Anor [2024] HKCFI 2101, [81]. Where fiduciary duties arise out of the employment relationship, the scope of the fiduciary obligations both arises out of, and is circumscribed by, the contractual terms, because equity cannot alter the terms of the contract validly undertaken: University of Nottingham v Fishel [2000] ICR 1462 at 1491. 61.In general, senior employees are more likely to owe fiduciary duties. Specifically, fiduciary duties may be owed by an employee who is a de facto director (albeit not a de jure director). For instance, in South China Media Ltd v Kwok Yee Ning [2018] HKDC 194, it was held that an “advertising director” was a de facto director by reason of (i) the employee having the title of “advertising director” and being held out to clients as “advertising director” and (ii) the employee having authority to negotiate with clients on the terms of contracts and to enter into such contracts for and on behalf of the company. 62.In addition, salespersons may owe fiduciary duty in relation to their sales responsibilities. For instance, in Helmet Integrated Systems Ltd v Tunnard [2007] FSR 16, it was held that the salesperson owed fiduciary duty as the employer would have no control over how the salesperson deployed the information he learnt as a salesman and would be dependent on him to pass it on, and the employer would otherwise be vulnerable to any misuse of such information, the dissemination of which was outside its control. Such vulnerability is a “defining characteristic” of a fiduciary relationship. D5.2 Matthew 63.P argues that Matthew owed fiduciary duties to Eventmaster as its senior employee, de facto director and/or salesperson. 64.On the evidence, Matthew was the business director and was held out as “business director” to P’s Clients. He led the sales and marketing team, and had authority to set prices and negotiate on the terms of sales contract for and behalf of Eventmaster. According to Tony’s testimony, he left the sales team entirely to Matthew who would merely consult Tony on costs of projects. Whilst Tony had the final power of approval, he only checked to make sure the project was profitable. Moreover, Matthew, Tony and Johnathan had weekly sales meeting to discuss sales issues. Similar to the “advertising director” in South China Media Ltd v Kwok Yee Ning (supra), it may be said that Matthew exercised the powers and discharged the functions of a director. 65.In any event, there can be no question that Matthew was the recipient of the Confidential Information in relation to his sales work. There is express provision in his employment contract governing the same, i.e. the Confidence Clause. I agree with Mr Wou that Matthew is in a position of trust and confidence in relation to the Confidential Information. 66.In addition, Matthew is in charge of other account managers like Jenny and Eugenie. As confirmed by the testimony of Jenny and Eugenie, clients would contact individual account managers directly. Hence, if Matthew (or account managers reporting to him) failed to pass on the clients’ requests, Eventmaster would have no way to know. Further, Eventmaster would have no control over how Matthew deployed the information he learnt as a salesperson and would be dependent on him to pass it on. I agree with Mr Wou that Eventmaster would be vulnerable to any misuse of such information and such vulnerability is a defining characteristic of a fiduciary relationship. 67.In my view, Matthew did owe fiduciary duties to Eventmaster. At the very least, that must be the case in relation to his sales work. D5.3 Jenny and Eugenie 68.In relation to Jenny and Eugenie, Mr Wou accepts in P’s closing submissions that they were not senior employees but contends that, as salespersons, they owed fiduciary duties at least in relation to their sales work. 69.On behalf of Eugenie, Mr Jeffrey Lai stresses that Eugenie was not a de facto director, and she was merely a frontline salesperson of P who did not have a freehand or autonomy in client management, and was incapable of making any decision at corporate level. 70.Yet, this misses the point as P is not seriously contending that Jenny and Eugenie were senior employees or de facto directors of Eventmaster. Importantly, neither Jenny nor Eugenie has any real answer to P’s argument that they owed fiduciary duty to Eventmaster at least in relation to their specific contractual obligations over sales work. They were in a position of trust and confidence in relation to the Confidential Information, and this is further borne out by the express Confidence Clause contained in their employment contracts. 71.In my view, Jenny and Eugenie owed fiduciary duties to Eventmaster at least in relation to their sales work. D6. Imputation of Knowledge of Matthew and Jenny into Episode 72.Matthew and Jenny were the 40% and 20% shareholders of Episode (together controlling a majority 60% of shares in Episode). They were also the directors of Episode. Moreover, one must not overlook the fact that Matthew and Jenny joined force to incorporate Episode in April 2019, and they tendered resignations in parallel in mid-July 2019. Indeed, as revealed in Jenny’s testimony, she and Matthew were the only staff members working for Episode up to May 2020. On the whole, I am satisfied that they were the daily operating mind of Episode. Their knowledge should be imputed into Episode. D7. Duty of Confidence / Duty Not to Misuse Confidential Information D7.1 General principles 73.Information obtained in employment can be categorised into 3 classes:- (1) trivial information, (2) confidential information, and (3) specific trade secrets: Faccenda Chicken Ltd v Fowler [1984] ICR 589. As clarified by Mr Wou, P’s stance is that the Confidential Information belongs to Class 2, i.e. information which was confidential, either because the employee was expressly told so, or because of its character, but which once learned necessarily remained in the employee’s head and became part of his own skill and knowledge applied in the course of his employer’s business. 74.It is trite that so long as the employment continues, the employee cannot use or disclose Class 2 information without infidelity or breach of contract. When the employment has ceased, the employee can use his full skill and knowledge for his own benefit in competition with his former employer unless there is an enforceable express contractual provision restraining the employee from doing so. 75.Examples of Class 2 information include e.g. list of customers, their contact information, their record of past purchase and the price offered. These are valuable information which, if disclosed to competitors, would enable them to tempt the plaintiff’s customers away. Given the nature of the information involved, there could not be any doubt in the mind of employees that the information in question was confidential information, particularly where authorized staff members were required to input a password so as to have access to the information: Dunamis International Co. Ltd. v Chan Hong Kit & Anor, DCCJ 1178/2009 (20 October 2010, unreported). 76.A third party who receives confidential information is bound by a duty of confidence if he has notice. Whether a person has notice is an objective question to be assessed by reference to the standards of the reasonable person: Travel Counsellors Ltd v. Trailfinders Ltd [2021] EWCA Civ 38. D7.2 Application to facts 77.Whilst I would consider the matter in more details when dealing with individual allegations of breaches of duties, I take the view that, in general, the Confidential Information falls within “Class 2”, which Matthew, Jenny and Eugenie could not misuse in the course of employment with Eventmaster. 78.First, the Confidential Information comprised emails received or sent, invoices, quotations, contracts, agreements, business strategies, documents sent and/or received by Eventmaster in relation to its clients. Eventmaster’s competitors could make use of the pricing information contained therein to fix a lower or more competitive price to tempt clients away. 79.Second, it is Tony’s evidence that Eventmaster’s quotations and invoices were stored on the company’s Google Drive, which only the sales team could access. Salespersons/account managers were required to input a password so as to have access to the information. Such practice is confirmed by the testimony of Jenny and Eugenie, who agreed that such information has to be kept confidential. The only caveat is Jenny’s evidence that the salespersons may not necessarily upload all the quotations to the Google Drive. However, the mere fact that salespersons may not have dutifully uploaded all the quotations does not detract from the confidential nature of such document. 80.Third, as the knowledge of Matthew and Jenny should be imputed into Episode, Episode also acquired notice of the confidence of the same. An obligation of confidence arose, and Episode was bound by a duty of confidence and could not use the Confidential Information to the detriment of Eventmaster. 81.On the other hand, I am not convinced by the contrary arguments put forth by Mr Jeffrey Lai for Eugenie:
E. Breaches of Duty (a) Overview E1. Breaches of duties by Matthew, Jenny and Eugenie 82.Whilst I would consider the matter in more details when dealing with allegations pertaining to each client in turn, I consider it helpful to give an overview of breaches of duties by Matthew, Jenny and Eugenie. 83.First, as explained above, I am prepared to draw adverse inference against Matthew given the lack of explanation for his failure to testify. 84.Second, as explained above, I do not find Jenny and Eugenie to be credible witnesses. Further, I prefer the evidence of Tony and Jonathan to their evidence in the event of conflicts. 85.Third, Jenny conceded in cross-examination that Matthew caused Episode to issue quotations since (at least) July 2019 whilst being employed by Eventmaster. Not surprisingly, Jenny sought to disassociate herself from this and claimed that she had no knowledge or involvement at the time. I do not find Jenny’s evidence credible. It is inherently improbable that, as fellow shareholder and director of Episode, Jenny had no idea that Matthew caused Episode to carry on a competing business since July 2019. Episode was set up by Matthew and Jenny in April 2019. It is unbelievable that they did not discuss the business or business plan of Episode throughout April to July 2019. Notably, they tendered resignations to Tony almost at the same time in mid-July 2019, which is suggestive of a coordinated gameplan. The truth is that Jenny must have discussed with Matthew, and she either agreed or was content to proceed with such gameplan. 86.Fourth, even on her case, Jenny carried on a competing business via Episode at least after 14 August 2019 (albeit on the pretext that she was no longer bound by any duty towards Eventmaster). In the light of my finding that Jenny’s employment with Eventmaster continued until 30 September 2019, Jenny would have acted in breach of her duties even on her own case (i.e. during the period after 14 August up to 30 September 2019). 87.Fifth, as examined below, contemporaneous evidence suggest that Matthew induced Eugenie to work for and provide Confidential Information to Episode from late 2019 to May 2020. It is inherently improbable that, as fellow shareholder and director of Episode, Jenny had no knowledge or involvement of the same. 88.Sixth, Ds have not disclosed the quotations issued by Episode in these proceedings. At the very least, they should and could have been disclosed by Matthew, Jenny and Episode. Whilst it is not strictly necessary, the Court may draw adverse inference that such quotations, if disclosed, would militate against Ds’ case. 89.I would now consider P’s allegations of breaches of duty with respect to each client or agent in turn. For ease of reference, I would deal with them in the sequence and by reference to the chronology adopted in P’s closing submissions, whilst addressing relevant evidence and submissions in parallel. (b) Breaches of Duties whereby Eventmaster did NOT provide quotations E2. PAG 90.P relies on the following chronology of events:
91.As shown from the above, PAG approached Eventmaster and asked for quotation in June 2019. In the end, no quotation was provided by Eventmaster to PAG. Instead, Episode was engaged to develop a software application (“APP”) for the PAG Investment Meeting held in Hanoi. As admitted in Ds’ Amended Defence, on 8 to 11 September 2019, Episode provided technological support services by building an APP for use in the PAG Investment Meeting. 92.In her closing submissions, Jenny argued that PAG made inquiries with her shortly after her departure from Eventmaster and that the switch to Episode was the result of PAG’s choice. With respect, it is clear from the above that PAG approached Jenny in June 2019, well before her departure. 93.In my view, Matthew and Jenny carried out a competing business via Episode since at least July 2019 to provide services to PAG. 94.First, Tony forwarded PAG’s email in June 2019 to both Matthew and Jenny. Both of them were aware of such business opportunity from PAG, one of P’s Clients. The fact that neither of them caused Eventmaster to provide a quotation suggests that they must have concealed the request for quote from Eventmaster. Instead, as fellow shareholders and directors of Episode, they diverted such business opportunity to Episode. 95.Second, according to information of Episode’s APP for PAG, it had been updated on 28 August 2019. As it would take time for the APP to be developed, surely Matthew and Jenny must have carried out a competing business in development of the APP via Episode for some time prior to 28 August 2019, i.e. in the course of their employment with Eventmaster. 96.Third, the invoice for the PAG Investment Meeting was issued on 17 September 2019. It has a quotation number “Q20190717_PAG_v1.3”. According to evidence from P, the number format of Eventmaster’s quotations is “[year][date][client’s name]”. It is apparent that Episode’s number format for quotations follows a similar pattern (which is not surprising as the quotation was presumably prepared by either Matthew or Jenny). The quotation number constitutes evidence that Episode issued its quotation to PAG on 17 July 2019. It follows that Matthew and Jenny had worked on the matter since July 2019. 97.As mentioned above, Ds did not disclose Episode’s quotations even though they should have been in a position to do so. Whilst it is not strictly necessary to rely on Ds’ failure to discover such quotations (as the quotation numbers should suffice), such failure could give rise to adverse inference that the quotations, if discovered, would militate against Ds’ case. This should apply, mutatis mutandis, to P’s allegations regarding other clients. 98.Fourth, in the facebook page of Episode, there is a facebook post dated 9 September 2019 about the APP developed for the PAG Investment Meeting. The post stated as follows:- “It finally comes to the big day after two months preparation and development”. Evidently, Episode had been engaged for two months since July 2019, which tallies with the date of quotation. Upon being cross-examined, Jenny claimed that this was only an exaggeration. In my view, Jenny was plainly lying in order to cover up herself. 99.Fifth, Jenny has been managing PAG all along and she issued the invoice to PAG on 17 September 2019 whilst being employed by Eventmaster. Consistent with the foregoing, the quotation on 17 July 2019 was likely issued by Jenny, while she was still in employment with Eventmaster. Alternatively, even if the quotation was issued by Matthew, he was also in employment with Eventmaster at that time. 100.In the circumstances, I am satisfied that:
E3. AXA 101.P relies on the following chronology of events:
102.According to P, no quotation was provided by Eventmaster to AXA for the services covered by the two invoices from Episode. On the other hand, as admitted in Ds’ Amended Defence, Episode provided technological support services to AXA for the following two events:
103.In my view, Matthew carried out a competing business via Episode since June 2019 to provide services to AXA, one of P’s Clients.
104.In her closing submissions, Jenny argued that AXA was not P’s client as P only provided services through an agent, Onstage. However, this does not really matter as Onstage is one of P’s clients in any case. 105.In the circumstances, I am satisfied that:
E4. HK Land 106.P relies on the following chronology of events:
107.According to P, no quotation was provided by Eventmaster to HK Land for the services covered by the invoice from Episode. On the other hand, as admitted in Ds’ Amended Defence, on 25 October 2019, Episode provided technological support services for HK Land in the event of “Bespoke Salon Opening”. 108.In her closing submissions, Jenny argued that Matthew was the main contact person for HK Land and she merely issued invoice to HK Land pursuant to Matthew’s instructions after she left Eventmaster. I do not find this credible. In my view, both Matthew and Jenny carried out a competing business via Episode in relation to HK Land against Eventmaster. 109.First, HK Land was handled by Matthew when he was still in employment with Eventmaster. Matthew’s emailing of Episode’s business registration certificate to HK Land on 30 April 2019, right after Episode was incorporated on 25 April 2019, constitutes cogent evidence that Matthew sought to persuade HK Land to move with him to Episode. 110.Second, it would appear from the chronology above that both Matthew and Jenny were involved and they have concealed HK Land’s request for quote from Eventmaster and they did not quote for Eventmaster either. As fellow shareholder and director of Episode, Jenny must have assisted or otherwise agreed to proceed with the same. 111.Third, that Jenny agreed with and assisted Matthew is borne out by Jenny’s own evidence. According to Jenny, whilst Matthew continued to handle HK Land at Episode, she issued the invoice on 26 September 2019 upon Matthew’s request. Presumably Jenny issued the corresponding quotation on 18 September 2019. Contrary to Jenny’s assertion, she was still in employment with Eventmaster when she issued the invoice and the quotation in September 2019. 112.Fourth, as explained above, I do not find Jenny to be a credible witness in any event. 113.In the circumstances, I am satisfied that:
E5. Prada 114.P relies on the following chronology of events:
115.According to P, no quotation was provided by Eventmaster to Prada for the services covered by the two invoices from Episode. On the other hand, as admitted in Ds’ Amended Defence, Episode has provided technological support services for Prada in the following events:
116.In my view, Jenny carried out a competing business via Episode since at least July 2019 against Eventmaster. 117.First, for the invoice issued by Jenny in relation to Prada Mode London on 6 November 2019, the corresponding quotation was issued on 24 July 2019. Jenny was still in employment with Eventmaster when she issued the quotation. In this regard, I do not accept Jenny’s assertion that she was only approached by Prada for Prada Mode London in September 2019. 118.Second, as for the invoice issued by Jenny in relation to Prada Mode Paris on 29 January 2020, there was no quotation number stated on the invoice. Jenny claimed that she was only approached by Prada on that in December 2019. Presumably, if Jenny were right, the quotation would have been issued in or around December 2019, and plainly Ds could have disclosed it. Ds’ failure to disclose the quotation tends to suggest that the quotation, if disclosed, would militate against Ds, e.g. it was issued prior to 30 September 2019 whilst Jenny remained employed by Eventmaster. In any case, Prada’s request for quote would have happened even earlier. 119.In the circumstances, I am satisfied that:
E6. Pico 120.P relies on the following chronology of events:
121.In my view, Eugenie has worked for Episode in relation to Pico in competition with Eventmaster. 122.First, on 5 May 2020, Eugenie received enquiries from Pico in relation to 2020 AWE Exhibition and Nestle. Yet, Tony was not made aware of such enquiries, and Eventmaster did not issue any quotation to Pico. In fact, Eugenie prepared quotations for Episode only, but not Eventmaster. 123.Second, it is clear from Eugenie’s WhatsApp conversation with Matthew that she was working for Episode in relation to Pico. For instance, on 11 May 2020, Eugenie told Matthew that Pico was chasing her for UI/UX design and contents and that she would add this in the quotation. She even asked Matthew to send company stamp jpg to her (apparently so that she can copy and paste to Episode’s quotation) and asked him to create a company email for her (something like [email protected]). 124.Third, Episode’s quotations for Pico were found in Eugenie’s working computer. They were modified on 6, 11 and 14 May 2020. This tallies with Eugenie’s involvement in revising Episode’s quotation for Pico as reflected in the WhatsApp conversation with Matthew (e.g. Eugenie’s message on 11 May 2020). 125.Fourth, Eugenie admitted working for Episode. When confronted at the 2nd Meeting, Eugenie said she felt financially unsecure in view of COVID-19 and P’s performance, so she would like to work as freelance for additional income source. This is in effect an admission that Eugenie worked for Episode (albeit on a part-time basis). When cross-examined at trial, Eugenie also conceded she was working for Episode at that time and she was drafting Episode’s quotations for Matthew’s approval. 126.Fifth, as pointed out by Mr Wou, Eugenie wanted Episode to win the deal with Pico, as she told Matthew in her WhatsApp message on 19 May 2020 that she was worried that Pico might prefer to engage Eventmaster as before (“我係怕佢會覺得咁搵返evention [i.e. Eventmaster] 做咯”). 127.On the other hand, Mr Jeffrey Lai submits that the evidence could only show that Eugenie seemed to be making preparation to work or seemed to be working for Episode on a part-time basis. However, if the work done by Eugenie is inconsistent with Eventmaster, it is not a defence that she merely worked on a part-time basis. In this regard, it is difficult to see how it can be consistent with Eugenie’s duty to send quotation to and persuade an existing client of Eventmaster to move to Episode. 128.Other arguments advanced by Mr Lai do not assist Eugenie either:
129.In the circumstances, I am satisfied that:
E7. CMHK 130.P relies on the following chronology of events:
131.In my view, Eugenie has worked for Episode in relation to CMHK in competition with Eventmaster. 132.First, on 4 March and 8 May 2020, Eugenie modified a quotation of Episode relating to CMHK. Episode’s quotations and related documents were found in Eugenie’s working computer. Yet, Tony was not made aware of any invitation to quote and Eventmaster did not quote in this regard. 133.Second, Eugenie met with the representative of CMHK together with Matthew on 12 May 2020 and they further discussed CMHK’s inquiries via WhatsApp on 15 May 2020. It is clear from contemporaneous documents that they were pitching CMHK on behalf of Episode. 134.In this regard, Eugenie claimed to be representing Eventmaster when attending the pitching on 12 May 2020. During cross-examination, she alleged that she had duly informed the representative of CMHK that Matthew and her were representing different companies. I do not find this credible:
135.Mr Jeffrey Lai further argues that, as confirmed by Eugenie, Episode did not win the deal with CMHK. Whilst this might be relevant to P’s remedies (particularly if P is seeking an account of profits), it is difficult to see how this may operate as a defence for Eugenie. 136.In the circumstances, I am satisfied that:
(c) Breaches of Duties whereby Eventmaster Provided (or was deemed to have provided) quotations E8. AIA HK 137.P relies on the following chronology of events:
138.The following should not be in dispute:
139.There is, however, no concrete evidence as to the timing when quotations were issued by Episode to AIA HK. Insofar as Eventmaster is concerned, Tony provided quotations to AIA HK on 2 September 2019, and he was notified that AIA HK engaged another service provider on 29 November 2019. It is possible that Episode issued quotations after 31 August 2019, the last day of employment of Matthew with Eventmaster. 140.Further, even assuming that Matthew has used the Confidential Information to prepare Episode’s quotations to AIA HK, it is possible that he only did so after his departure from Eventmaster. In relation to Class 2 information, when the employment has ceased, the employee can use his full skill and knowledge for his own benefit in competition with his former employer unless there is an enforceable express contractual provision restraining the employee from competing with his former employer after the termination of the employment: Union Knopf (HK) Ltd (supra), [20]. 141.That said, the onus is on Matthew to tell the Court the timing when quotations were issued by Episode to AIA HK, and adverse inference may be drawn against him for his failure to testify. It is, however, not strictly necessary for me to resolve this, given that P also contends that the 2020 event trips for AIA HK constituted a mature business opportunity, which I am prepared to accept based on Mr Wou’s submissions for P:
142.In the circumstances, I am satisfied that:
E9. TVB 143.P relies on the following chronology of events:
144.The following should not be in dispute:
145.In my view, the above suggests that the work for Phase 2 of the Mun Road project was a mature business opportunity. In particular:
146.In the circumstances, I am satisfied that:
147.Separately, a document entitled “proposal 2020/門路_Project_20200323(TVB).xlsx” was created and modified in Eugenie’s working computer with Eventmaster on 21 April 2020. Eugenie admitted that Mattew gave her the file (which was about the Mun Road project) to follow up. 148.In response, Mr Jeffrey Lai says there is no evidence to show what contents were modified and whether Eugenie made the alleged modifications. However, if modifications were made using Eugenie’s computer, the natural inference is that they were made by Eugenie. 149.Mr Lai further argues that modification of the quotation would be weird and unnecessary, as the relevant service contract was already signed between TVB and Episode on 8 April 2020. Whilst I can see the force of Mr Lai’s argument, it is not a defence if Eugenie did work for a competitor by modifying its quotation (which remained a breach). Rather, Mr Lai’s argument goes to the question whether P suffered any loss as a result of such breach (which I would address later at the assessment of loss). 150.In the circumstances, I am also satisfied that:
151.For completeness, I should mention that P also sought to argue that Eugenie was involved with the Mun Road project even before April 2020. However, there is no documentary evidence in support of the same. E10. Bentley 152.P relies on the following chronology of events:
153.In addition, P relies on screenshot showing that Eugenie modified Episode’s quotation in relation to Bentley on 21 April and 7 May 2020. 154.In my view, there is insufficient evidence to establish that Eugenie has worked for Episode in relation to Bentley and HKJC or otherwise engaged in competition against Eventmaster in relation to the same. 155.First of all, whilst Eugenie told Jenny in November 2019 that Bentley was pitching again for the HKJC project, she was asking Jenny to share with her the quotation as she could not find it herself. It was for such purpose that Eugenie sent the tender info and mentioned the 2018 price to Jenny so that Jenny could tell which quotation she was looking for. This is borne out by Jenny’s response that it was Matthew’s deal and maybe Matthew would know as he was involved. Reading the WhatsApp conversation as a whole, Eugenie was merely seeking help from Jenny on this occasion. 156.Second, Eugenie did prepare a quotation for Eventmaster to Bentley relating to the HKJC project on 15 January 2020 in the amount of HK$485,200. 157.Third, on 27 December 2019, Matthew sent Episode’s quotation to Bentley relating to the HKJC project in the amount of HK$707,600. Whilst Episode’s quotation was found in Eugenie’s computer, Eugenie explained that a third-party quotation was requested by Bentley in the tender process, and hence she talked to Matthew and asked Episode to issue a quotation to Bentley: “搵Episode出張報價”. Apart from that, there is no documentary evidence of Eugenie’s involvement in preparing Episode’s quotation in December 2019. In this regard, any modifications made in April or May 2020 would have no bearing on the quotations made by Episode and Eventmaster in December 2019 and January 2020 respectively. 158.Fourth, as acknowledged by Mr Wou, the service items quoted in the quotations by Episode and Eventmaster are not the same. Whilst there is a common item “Mobile App”, Eventmaster quoted a price of $250,000 whilst Episode misquoted a figure of HK$160,000, when the correct figure should be HK$320,000 (based on the stated man-days and unit rate). In other words, the price quoted by Episode is in fact higher. 159.For completeness, I should mention that Bentley did engage Eventmaster for some other service items in the amount of $72,000, whilst Bentley did not award any contract to Episode. E11. HKTB 160.P’s case against Eugenie in relation to HKTB is that, on 11 February 2020, Eugenie sent an email to Matthew disclosing HKTB’s invitation to tender for a “HK Dragon Boat Festival 2020” event. P says Eugenie acted in breach by competing against Eventmaster, and she also breached the Confidence Clause and her duty of confidence. 161.In my view, there is insufficient evidence to establish that Eugenie has acted in breach. 162.First, Eugenie accepted that an invitation to tender from HKTB was sent to Eventmaster in about February 2020. Her explanation is that she was tasked to handle it and she sent it to Matthew to seek his assistance and guidance, as he handled HKTB events during his employment with Eventmaster. Whilst Eugenie’s explanation may seem dubious, it is not P’s case that Episode competed by issuing a quotation in parallel. On balance, this tends to suggest that Eugenie was indeed seeking help on this occasion. 163.Second, Eugenie’s evidence is that she did issue a quotation for Eventmaster to HKTB and Eventmaster did secure the deal, which was only cancelled subsequently due to the COVID-19 pandemic. Whilst Tony has not confirmed the same, he has not denied it either. It is also P’s pleaded case that a quotation was provided by Eventmaster to HKTB but the event was later cancelled. The fact that Eugenie went ahead to issue quotation for Eventmaster suggests that she was not trying to divert business away from Eventmaster. E12. Lore 164.P relies on the following chronology of events:
165.In gist, P’s case against Eugenie in relation to Lore is as follows:
166.In my view, Eugenie has worked for Episode in relation to Lore in competition with Eventmaster. 167.First, Eugenie was already working for Episode since March 2020 (for CMHK), April 2020 (for TVB) and early May 2020 (for Pico). Consistent with the foregoing, it is likely that Eugenie was also working for Episode in relation to Lore in early May 2020. 168.Second, since receiving Lore’s invitation to tender on 4 May 2020, Eugenie never prepared or issued any quotation for Eventmaster up till 29 May 2020 when her employment was terminated. In contrast, she prepared a quotation on 6 May 2020, apparently for Episode. 169.In this regard, Eugenie did claim in her witness statement that she was asked to handle Lore and she sent Matthew information to seek guidance and assistance from him. Mr Jeffrey Lai further argues that the quotation found in Eugenie’s computer does not contain any letterhead, signature or company chop, and there is no evidence to show what contents were modified and by whom such alleged modifications were actually made. 170.Nevertheless, given that the quotation was found in Eugenie’s computer and shown to be modified by the user of such computer, the natural inference is that it was modified by Eugenie. Moreover, the document was contained in a folder named “Lore Ltd”, which is in turn found in a folder named “EP”. It is evident that the folder named “EP” contains documents relating to Episode, including files named “EPISODE-IntroductionV0.1.pdf” and “Sales Kit 20200526_v8.0pptx.pptx”. 171.In any case, Eugenie did accept in her testimony that she was drafting quotations for Episode for approval by Matthew at least since April 2020 (for TVB) or early May 2020 (for Pico). 172.On balance, I find that the quotation for Lore was prepared or modified by Eugenie for Episode. 173.Third, whilst Eventmaster issued a quotation to Lore on 1 June 2020, such quotation was prepared and issued by another staff of Eventmaster (Tansy Cheung), as opposed to Eugenie whose employment was terminated on 29 May 2020. Indeed, the fact that such quotation could be prepared and issued promptly by Eventmaster 3 days after termination of Eugenie’s employment, begs the question as to why Eugenie never prepared and issued a quotation for Eventmaster from 6 to 29 May 2020 (a period of over 3 weeks). 174.In the circumstances, I am satisfied that:
E13. HKFWS 175.P relies on the following chronology of events:
176.In gist, P’s case is that Eugenie modified Episode’s quote for HKFWS on 19 May 2020 (and also on 14 May 2020). 177.In response, Eugenie admitted that she was asked to manage EventMaster’s pursuit of collaboration opportunities with HKFWS but denied that she had concealed from Eventmaster any business opportunity from HKFWS. Mr Jeffrey Lai also argues that the quotations found in Eugenie’s computer are unsigned, undated, without company chop, and without the title of the person in charge, and hence they are not final drafts. 178.In my view, Eugenie did work for Episode in relation to these quotations for HKFWS.
179.In the circumstances, I am satisfied that:
(d) Other Breaches E14. CBRE GWS 180.P relies on the following chronology of events:
181.P's allegation against D4 in relation to CBRE GWS is that D4 failed to disclose the business opportunity of CBRE GWS to P in about December 2019. 182.It is not in dispute that:
183.P’s complaint is that when Tony asked Eugenie if Eventmaster had any new project with CBRE GWS, Eugenie did not tell the truth but helped Jenny to cover up the fact that Episode provided technological support services for CBRE GWS and the email was sent by mistake to Eventmaster. She failed to disclose to P that Jenny had won a project with CBRE GWS. 184.In my view, this does not amount to breach of duty on Eugenie’s part. According to Eugenie, she told Tony that CBRE GWS was not the client of Eventmaster at the material time. Even assuming that Eugenie was lying and she covered up for Jenny as alleged by P, she was not concealing a business opportunity because, by the time she realised what happened, CBRE GWS had already awarded the deal to Episode. There is no evidence to suggest that Eugenie had any prior knowledge as to how Jenny or Episode secured the deal. E15. DBS and Streaming Services 185.P relies on the following chronology of events:
186.In gist, P’s case against Eugenie is as follows:
187.In my view, Eugenie has acted in breach of duties by disclosing confidential information to Jenny. 188.First, it is clear from Eventmaster’s invoices that it was providing webinar and livestreaming services to DBS. I am prepared to accept that, at the time, webinar solution was a new concept for event management under the COVID-19 pandemic situation and a new business strategy of Eventmaster, which forms part of the Confidential Information. By sharing the webinar internet link to Jenny and asking her not to type anything, it is evident that Eugenie disclosed such new concept and business strategy to Jenny discreetly such that Jenny and Episode may take advantage of the same. 189.Second, the DBS event was jointly operated by Eventmaster and another production house called Vision Media (Hong Kong) Limited (“Vision Media”) with the livestreaming service provided by the latter. Jenny testified that it is difficult to secure livestreaming service (“Livestreaming公司好難搵”). As such, I am prepared to accept that Eventmaster’s livestreaming prices (including pricing information of Vision Media) forms part of the Confidential Information. As Eugenie disclosed such pricing information to Jenny, Episode could make use of the same to compete with Eventmaster. 190.Third, the arguments advanced for Eugenie do not undermine the foregoing:
191.In the circumstances, I am satisfied that:
E16. UBS 192.P's allegation against Eugenie in relation to UBS is that she sent to Matthew information relating to UBS forum via WhatsApp between 31 August and 31 October 2019. 193.However, as pointed out by Mr Jeffrey Lai, no date is shown in the subject WhatsApp conversation between Matthew and Eugenie, and the UBS link referred to by Matthew in the WhatsApp conversation was sent out on an unknown date in 2019. Further, there is no other evidence of any further follow-up or business development by Episode. Based on the WhatsApp conversation alone and assuming that it took place between 31 August and 31 October 2019 (shortly after Matthew’s departure), one could not rule out the possibility that Eugenie was seeking Matthew’s guidance on such occasion. 194.In the circumstances, there is insufficient evidence to establish that Eugenie acted in breach of her duties. (e) Summary of Conclusion 195.To conclude, I find that there are breaches of duty in relation to the following clients and/or agents:
196.Among the foregoing, Matthew and Jenny (but not Eugenie) were involved in the following:
197.In addition, Matthew, Jenny and Eugenie were involved in the following:
198.On the other hand, I find that there is insufficient evidence to establish breaches of duty in relation to the following clients and/or agents:
F. Dishonest Assistance 199.It is P’s case that:
F1. Relevant principles 200.The relevant principles on dishonest assistance have been helpfully summarised by DHCJ Eugene Fung SC (as he then was) in Hui Cheung Fai v Daiwa Development Ltd (unrep., HCA1734/2009, 8 April 2014):
F2. Dishonest assistance among Matthew, Jenny and Episode 201.I find that Matthew, Jenny and Episode dishonestly assisted each other in breach of their equitable duties in relation to the following:
202.First, I have found that Matthew and Jenny acted in breach of their fiduciary duties and duty of confidence in relation to these clients, and their knowledge should be imputed into Episode. As such, Episode should also be in breach of the duty of confidence. 203.Second, Matthew and Jenny (and in turn Episode) must have assisted each other, having regard to the following:
204.Third, Matthew, Jenny and Episode acted dishonestly:
205.Fourth, I am satisfied that resultant loss is caused, which I would address in the assessment of equitable compensation or damages. 206.In the premises, Matthew, Jenny and Episode are jointly and severally liable for the breaches of fiduciary duties in relation to PAG, AXA, HK Land, Prada and AIA HK. F3. Dishonest assistance of Eugenie by Matthew, Jenny and Episode 207.I find that Matthew, Jenny and Episode dishonestly assisted Eugenie in breach of her equitable duties in relation to the following:
208.First, I have found that Eugenie acted in breach of her fiduciary duties and duty of confidence in relation to these clients. 209.Second, Matthew and Jenny (and in turn Episode) must have assisted each other, having regard to the following:
210.Third, Matthew, Jenny and Episode acted dishonestly:
211.In the premises, Matthew, Jenny, Episode and Eugenie are jointly and severally liable for the breaches of Eugenie’s equitable duties in relation to Pico, CMHK, TVB, Lore, HKFWS, and DBS and streaming services. G. Procurement to Breach of Employment Contract 212.It is P’s case that Matthew induced Eugenie to work for Episode in breach of her employment contract. 213.The ingredients of the tort of inducing breach of contract are as follows:
214.The first ingredient is satisfied by the employment contract between Eventmaster and Eugenie, which was in force until 29 May 2020. 215.The second ingredient is satisfied given my findings that Eugenie worked for Episode (in breach of her duty of fidelity and the No Outside Business Clause) and disclosed Confidential Information (in breach of the Confidence Clause and her duty of fidelity) in relation to Pico, CMHK, TVB, Lore, HKFWS, and DBS and streaming services. 216.The third ingredient is satisfied having regard to the following:
217.As to the fourth ingredient, Matthew must have known of the existence of the relevant terms in the contract:
218.Alternatively, if Matthew did not care to find out, he would have turned a blind eye to the existence of such terms. 219.The fifth ingredient is also satisfied here because Matthew must have realized that Eugenie’s conduct as induced by him, namely acting in competition with Eventmaster and disclosing confidential information to its competitor whilst she was still in employment with Eventmaster, would result in the breach of the express terms (the No Outside Business Clause and the Confidence Clause) and the implied term (duty of fidelity) of her employment contract. 220.In the premises, Matthew is liable for inducement to breach of employment contract. Hence, Matthew and Eugenie are jointly and severally liable for breaches in duty in relation to Pico, CMHK, TVB, Lore, HKFWS, and DBS and streaming services. H. Conspiracy to Injure by Unlawful Means 221.It is P’s case that Matthew and Jenny conspired with the purpose to injure Eventmaster by unlawful means (“Conspiracy”) and Episode joined the Conspiracy upon or immediately after its incorporation. 222.The elements of unlawful means conspiracy to injure comprise:
223.The above elements are satisfied here:
224.In the premises, Matthew, Jenny and Episode are jointly and severally liable to P for the breaches of duties. I. Assessment of Equitable Compensation / Damages I1. Election for Equitable Compensation 225.After the close of evidence at trial, Mr Wou informed the Court that P elects equitable compensation as remedy for its causes of action in equity, including breach of fiduciary duties and breach of confidence. As regards other causes of action in common law, P seeks the usual remedy of damages. 226.According to Mr Wou, P’s election is motivated by the following:
I2. Causation 227.The common law rules of foreseeability and remoteness do not apply to equitable compensation, though causation is still required: Target Holdings Ltd v Redferns (a firm) and Another [1996] AC 421 at 434F; Libertarian Investments Ltd v Hall (2013) 16 HKCFAR 681 at [97]-[99]. 228.On behalf of Eugenie, Mr Jeffrey Lai contends that the evidence before the Court is insufficient to prove causation, i.e. but for Eugenie’s breaches of duties, P would obtain the deals from the clients or agents in question. There is force in such argument, bearing in mind that a client or agent often obtains quotations from two to three companies. Nevertheless, in relation to P’s Clients, one may say it is more likely than not that P’s Clients would continue to engage Eventmaster but for breaches of duties by Ds. 229.Be that as it may, whilst P initially claimed the entire amounts in the corresponding quotations, P has revised its position to reduce or limit its claims to the loss of chance. I3. Loss of Chance 230.P now submits that the legal basis on which the assessment of equitable compensation or damages should be made is the loss of chance of further orders. That required not merely an assessment of the chance but also an assessment of the profit which the claimant would have made, had the chance materialized: BSM Marketing Ltd v Take Ltd [2009] EWCA Civ 45 at [4]; applied in South China Media Ltd v Kwok Yee Ning [2018] HKDC 194. 231.The above goes to the assessment of loss of chance. However, it remains necessary to establish causation. In other words, a two-stage test will be engaged to (i) show that the plaintiff has lost the particular chance because of the breach (i.e. factual causation) and (ii) assess the likelihood of the chance and the value thereof (i.e. quantification): Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602, at 1610-1611. I4. P’s formula 232.According to P’s formula, the loss equals (i) quotation price multiplied by (ii) the chance of getting the deal and (iii) P’s gross profit margin. P contends that the chance is 40% where it has not provided quotation, and 20% where it has provided quotation. 233.First, P adopts the quotation price as a starting point. In response, Mr Jeffrey Lai argues that the quotation price does not necessarily reflect the final price, as accepted by Tony in cross-examination. Nevertheless, it seems to me that the Court should not try to speculate on the final price in each case, as the client may or may not ask for a discount or adjustment. In any case, it seems rather onerous (if not disproportionate) to impose on P the burden of adducing substantial evidence in respect of each client or agent in order to derive the likely discount and assess the final price in each and every case. 234.Mr Lai further stresses that the quotation price does not equate profits and given the complete absence of the accounts of Episode, ascertaining the profits actually made by Episode from the clients in question would be almost impossible. However, this smacks of moving the goal posts because, if Episode’s accounts are relevant, they ought to be disclosed by Ds. Moreover, even if P is to ask for such accounts, they may not be forthcoming given that (i) Matthew’s whereabouts is unknown, (ii) Jenny is no longer a director, (iii) Eugenie had left Episode’s employment and (iv) Episode had ceased operation. 235.On the whole, I consider P’s adoption of the quotation price to be a practical and reasonable step in P’s formula. 236.Second, in relation to loss of chance, it is not in dispute that a client would usually request quotations from 2 to 3 vendors in the industry. This is not challenged by Ds – indeed Jenny has confirmed such practice in her testimony. In the premises, P says that for each quote, the “chance of winning” ranged from 1/2 to 1/3. P thus proposes adoption of an average, which is 40%. 237.Therefore, in cases where P did not provide any quotation, P says it would have lost a chance to make a profit as follows:
238.Indeed, the percentage could well be higher than 40% for P’s Clients as they would most likely engage Eventmaster just like before. This is echoed by Tony’s evidence that an existing customer would tend to engage the service of Eventmaster again (“做落去唔差太遠都會幫襯返我哋”). As such, I consider the figure of 40% to be a reasonable (if not conservative) one. 239.By reason of the above, I am also satisfied that, where P did not provide quotation due to Ds’ breaches of duties, P would have lost such 40% chance of winning because the breaches of duties effectively deprived P of the chance to participate and tender for the deal (i.e. there is factual causation). 240.On the other hand, for cases where P did provide a quotation, P says that by reason of Ds’ breaches of duties, Episode could compete with it and would also be able to present a more competitive quote in terms of pricing and package, such that P’s “chance of winning” would be reduced to a level below 40%. P submits that in cases where both companies have quoted, a fair figure for “chance of winning” for P should be 20% (i.e. the chance has reduced by half), and P thus suffered a loss of chance of winning of 40% - 20% = 20%. 241.Therefore, in cases where P did provide a quotation, P says it would have lost a chance to make a profit as follows:
242.I consider the figure of 20% a reasonable percentage, which represents reduction of chance of winning by half (from 40% to 20%). 243.By reason of the above, I am also satisfied that, where both P and Episode provided quotations, P would have suffered such reduction of 20% chance of winning because the breaches of duties enabled Episode to compete and present a more competitive quote in terms of pricing and package (i.e. there is factual causation of the reduction in chance of winning). 244.Third, Tony has suggested in his witness statement that P’s gross profit margin was 35% in 2020. This comes across as a reasonable figure. Yet, Mr Jeffrey Lai says that there is no substantial documentary proof to justify Tony’s assertion. However, none of Ds has challenged the figure of 35%, whether in their evidence or by way of cross-examination. Whilst P’s formula is new, it is fair to say that by putting forward the same, P is adopting a more reasonable stance to limit its claim to the gross profit margin rather than the entire quotation amount. As such, I am prepared to allow some leeway for P. Moreover, the evidence is contained in Tony’s witness statement and there is little reason why P could not place reliance on the same. Of course, Ds are at liberty to cross-examine Tony on such figure but they chose not to. On the whole, I consider the gross profit margin of 35% a reasonable one. 245.I will now proceed with the assessment of each client in turn. I5. Loss of Chance where Eventmaster Has Not Provided Quotations I5.1 PAG 246.Episode was awarded the Investment Management Meeting 2019 event in the amount of $150,000. 247.Adopting P’s formula, as P did not quote for the event, P’s loss is therefore $150,000 x 40% x 35% = $21,000. I5.2 AXA 248.Episode was awarded the AXA HK MDRT day 2019 and AXA Asia MDRT Event 2019 events in the amount of $13,500 (after 57% discount, with an original price of $31,400) and $50,000 (after 82.65% discount, with an original price of $288,400) respectively. 249.I agree with P’s submissions that Episode had provided the huge discounts to persuade the client away from Eventmaster, and the fair prices for assessment of damages should be the original prices. 250.Adopting P’s formula, as P did not quote for the events, P’s loss is therefore ($31,400 + $288,400) x 40% x 35% = $44,772. I5.3 HK Land 251.Episode was awarded the Bespoke Salon Opening event in the amount of $68,000. 252.Adopting P’s formula, as P did not quote for the event, P’s loss is therefore $68,000 x 40% x 35% = $9,520. I5.4 Prada 253.Episode was awarded the Prada Mode London and Prada Mode Paris events in the amount of $80,000 (after 61% discount) and $80,000 (after 53% discount) respectively. 254.P relies on Jenny’s testimony that the usual prices should be $205,000 and $172,000 for the Prada Mode London and Prada Mode Paris events, and it was only that the client wanted a bargain and so the huge discounts were given. 255.I agree with P’s submissions that Episode had provided the huge discounts to persuade the client away from Eventmaster, and the fair prices for assessment of damages should be the original prices. 256.Adopting P’s formula, as P did not quote for the events, P’s loss is therefore ($205,000 + $172,000) x 40% x 35% = $52,780. I5.5 Pico 257.Episode provided a quote of $82,000 in the file EPQ2020051_P.pdf and a quote of $117,800 in the file EPQ20200514_PCW.pdf. 258.Adopting P’s formula, as P did not quote for these events, P’s loss is therefore ($82,000 + $117,800) x 40% x 35% = $27,972. I5.6 CMHK 259.Episode quoted a price of $36,200 in the file CMHK_Q.pdf. 260.Adopting P’s formula, as P did not quote for such event, P’s loss is therefore $36,200 x 40% x 35% = 5,068. I6. Loss of Chance where Eventmaster Has Provided Quotations I6.1 HKFWS 261.Episode provided a quotation for an event in the amount of $230,400. 262.P fairly accepts that, as Tony did not say whether P provided a quotation for such event, loss could be assessed on the basis that P had provided a quotation. 263.Adopting P’s formula, P’s loss is therefore $230,400 x 20% x 35% = $16,128. I6.2 Pico 264.Apart from the two quotes provided to Pico as addressed in Section I5.5 above, Episode also provided another quote of $18,000 to Pico in file Mid of Dec 20.pdf. 265.P fairly accepts that, as Tony did not say whether P provided a quotation for such event, loss could be assessed on the basis that P had provided a quotation. 266.Adopting P’s formula, P’s loss is therefore $18,000 x 20% x 35% = $1,260. I6.3 AIA HK 267.P provided quotations to AIA HK for the 2020 events on 2 September 2019 in the total amount of $71,500 + $71,500 + $416,500 + $178,500 + $71,500 + $249,500 + $178,500 = $1,237,500. 268.As examined above, the evidence suggests that Episode won the contract for all the 2020 events. 269.Adopting P’s formula, as P did quote for all 2020 events, P’s loss should be assessed at $1,237,500 x 20% x 35% = $86,625. I6.4 TVB 270.The price of the Episode’s TVB’s Mun Road Phase 2 contract is $120,000. Episode won the Mun Road Phase 2 contract. 271.Adopting P’s formula, as P did quote for such event, P’s loss for TVB’s Mun Road Phase 2 should be assessed at $120,000 x 20% x 35% = $8,400. 272.For the avoidance of doubt, whilst Matthew, Jenny and Episode should be liable for such loss, this is not the case for Eugenie. As I have found above, Eugenie acted in breach of duties in relation to TVB by modifying Episode’s quotation for TVB on 21 April 2020. Nevertheless, such breach took place after (i) TVB notified P on 11 March 2020 that they will not extend contract and (ii) TVB signed contract with Episode on 9 April 2020. Hence, P already suffered its loss prior to Eugenie’s breach of duties. Hence, insofar as Eugenie is concerned, she should be liable for nominal damages of $100 only. I6.5 Lore 273.P quoted a price of $120,200 for the Lore Live Jan 2021 event. 274.Lore did not engage the service of Eventmaster. 275.Adopting P’s formula, as P did quote for such event, P’s loss should be assessed at $120,200 x 20% x 35% = $8,414. I7. Nominal Loss I7.1 DBS and Streaming Services 276.Whilst I have found that there are breaches of duties in relation to DBS and streaming services, P is unable to point to any quotations provided by P or Episode for assessment of P’s loss. 277.In the circumstances, P fairly proposes that nominal damages should be awarded for the breach of duties, which I assess at HK$100. J. Conclusion 278.For all these reasons, I find that D1 to D3, i.e. Matthew, Jenny and Episode (but not D4, Eugenie), are jointly and severally liable for equitable compensation (or damages) for breaches of duty in relation to the following clients assessed at the following amounts (totalling $223,097):
279.Further, I find that D1 to D4, i.e. Matthew, Jenny, Episode and Eugenie, are jointly and severally liable for equitable compensation (or damages) for breaches of duty in relation to the following clients assessed at the following amounts (totalling $59,042):
280.In relation to costs, whilst the parties have made some submissions on costs, I would propose to make a costs order nisi so that the parties are afforded a chance to seek variation if they wish to. Nevertheless, to avoid unnecessary application for variation and further escalation of costs, I would make the following (tentative) observations. 281.First, as costs should follow the event in general, I consider that P should be entitled to costs against Ds. P has succeeded in its claims in relation to the bulk of the clients or agents. Whilst P has not succeeded in relation to some clients or agents, at the moment and on a tentative basis, it would appear that they were reasonably pursued without substantially lengthening the trial. 282.Second, I agree that costs should be apportioned as between (i) D1 to D3 on the one hand and (ii) D1 to D4 on the other hand. Judging from the issues and evidence involved and the amount of equitable compensation awarded against D1 to D4, I propose an apportionment of two-third of the costs against D1 to D3 and the remaining one-third of the costs against D1 to D4. 283.Third, in view of the amount of equitable compensation assessed, it appears to me that costs should be on the District Court scale. Whilst P explains that it was not until the pre-trial review that P realised D1 may not attend trial and it was probably too late to seek to transfer the matter down to District Court by then, it seems to me that P should have realised after the exchange of witness statements (if not upon completion of discovery) that the amount of equitable compensation or profits would most likely fall within the District Court scale. 284.In the circumstances, I make a costs order nisi for Ds to bear P’s costs of this action on a party to party basis on the District Court scale, with Certificate for one Counsel, to be apportioned as to two-thirds for D1 to D3 (for which they should be jointly and severally liable) and as to one-third for D1 to D4 (for which they should be jointly and severally liable). Such costs order nisi should become absolute unless any party applies for variation of the same within 14 days of this Judgment. 285.Last but not least, it remains for me to thank Mr Wou and Mr Richie Lai for P and Mr Jeffrey Lai for D4 for the helpful assistance given to the Court.
Mr Carl Wou and Mr Richie Lai, instructed by David Y.Y. Fung & Co., for the Plaintiff The 1st Defendant being absent The 2nd Defendant appearing in person The 3rd Defendant being absent Mr Jeffrey Lai, instructed by T.K. Tsui & Co., for the 4th Defendant |
Cases cited in this judgment