Lucullus Food & Wines Co. Ltd. v. Ng Pui Yee

DCCJ004767/2001

DCCJ4767/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4767 OF 2001

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Coram: Deputy Judge Yu in court

Date of Hearing: 23rd - 26th, 29th of July and 1st August 2002

Date of Handing Down Judgment: 6th September 2002

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Judgment

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1.The Plaintiff is a famous bakery and butchery supplier in Hong Kong. By an employment contract dated 24 October 1997, the Defendant was employed as a Senior Product Manager of the Plaintiff upon the terms and conditions therein contained. It is not disputed that as a term of the employment contract, the Defendant must straightly abide by Plaintiff's instructions and regulations. It is also conceded by the Defendant that it is an implied terms of the employment contract that the Defendant shall obey the reasonable instruction of the Plaintiff. These two terms and conditions are relied upon by the Plaintiff in its claim against the Defendant.

2.During the course of her employment, the Defendant worked under the supervision of PW1, the Director and General Manager of the Plaintiff. Part of her duties was to negotiate the terms of sales of product of the Plaintiff to various customers of the Plaintiff, including Jusco Stores (Hong Kong) Company Limited ("JUSCO"), UNY (HK) Company Limited ("UNY"), DCH Food Marts ("DCH"), and Park'N Shop O/B A.S. Watson Group (HK) Limited ("Park'N Shop").

Re: JUSCO

3.The Plaintiff has been supplying goods to JUSCO for over seven years. The trading terms with JUSCO has to be negotiated year by year. The contract for 1998 came to an end by 28 February 1999. PW1 instructed the Defendant to negotiate trading terms for the year ending 28 February 2000. It is the evidence of PW1 that since employing the Defendant in 1997, she had instructed the Defendant that under no circumstances was the Defendant authorised to agree on any trading terms or enter into any contract or make any offer or otherwise make any commitment on behalf of the Plaintiff without the specific instruction of PW1. And the Defendant was not authorised to sign or agree on any trading term or agreement without the instructions or approval of PW1.

4.In respect of the negotiation with JUSCO for the trading year of 1999 (which was to end on 28 February 2000), PW1 said she had instructed the Defendant that the new trading terms must not in any way be less favourable to the Plaintiff as compared to those of the preceding year. She explained in evidence that the sales performance of this client was sluggish and the sales were relatively small in volume and did not justify any further allowance.

5.It is the case of PW1 that she or the Plaintiff had no idea of any agreement being reached with JUSCO for the year 1999 before the Defendant resigned. Around late October or early November, after the Defendant had tendered her resignation to the Plaintiff, the replacing staff reported to PW1 that she could not locate the agreement made with JUSCO. On enquiry, the Defendant said that the agreement was lost. A meeting was finally held on 11 November 1999 which was attended by PW2, on behalf of the Plaintiff's Finance Department. In the meeting, the Defendant produced the JUSCO agreement. As the JUSCO agreement does not bear the signature of PW1, PW2 refused to accept the agreement.

6.As explained by PW1, as a form of internal control mechanism, the Finance Department of the Plaintiff would always check to ensure that all agreements bear the signature of PW1. If an agreement does not bear her signature, the Finance Department will reject the agreement immediately. And PW1 explained that as a general practice, she is the only person who could sign trading terms or make offer on behalf of the Plaintiff. The other staff may sometime co-sign the agreement with her. She also admitted that on some occasions, she had authorised other staff to sign the contract singly. Hence, on cross-examination, she agrees with Defence Counsel that by the mere fact that a document does not bear her signature is not enough to show that the agreement has been signed without her authority.

7.The relevant copy of the trading term for 1999 appeared at page 3 of bundle B. It is not disputed that the document is signed by the Defendant singly.

8.It is not disputed that the trading term has a new term that provides for listing fee of $2,000 per item for minimum 3 months display at specific stores. The Plaintiff said they had successfully negotiated with JUSCO for cancellation of this term. As a result the Plaintiff suffered no loss. This set of complain was a demonstration of the breach of duty on the part of the Defendant.

9.The Defendant does not dispute that she was instructed to negotiate on behalf of the Plaintiff the trading terms with JUSCO. In the course of negotiation, she kept PW1 informed of the progress almost on a daily basis. Whenever there were any new terms proposed or counter-proposed by JUSCO she would inform PW1. But she denied that PW1 ever instructed her that no trading terms which were less favourable to the Plaintiff than those of the previous year might be offered.

10.It is the evidence of the Defendant that the execution of the JUSCO agreement was made with the prior approval of PW1 and she only signed the agreement after obtaining the expressed approval of PW1.

11.It is also the evidence of the Defendant that general speaking, not all the documents were signed by PW1. Before she signed any trading agreement, she would ask PW1 if she would like to sign on behalf of the Plaintiff and it was only upon receiving her expressed direction then the Defendant would sign on behalf of the Plaintiff. Besides herself, some officers of the Plaintiff had signed on behalf of the Plaintiff, including Miss Denise Lam, and Miss Amy Shum.

Re: UNY

12.The Plaintiff had also been supplying goods to UNY for over seven years and the trading terms have to be renewed year by year as well. The trading terms begin from 1 December to 30 November of the following year. In about February 1999, PW1 instructed the Defendant to negotiate trading terms with UNY for the year 1999. Again the Defendant was instructed that the new trading terms must not be in any way less favourable to the Plaintiff as compared to the preceding year.

13.PW1 did not mention about this contract any more in the witness statement. It appears that she either knows nothing about the development or has not been reported to by the Defendant until after the Defendant has tendered her resignation. So like the JUSCO contract, by late October and early November, the replacing staff for the Defendant reported that she could not find the UNY contract. A meeting was then held with the Finance Department, which is the same meeting I mention above on 11 November 1999. A copy of the UNY contract was then produced. The copy UNY contract appeared at page 9 of the bundle.

14.It is conceded by the Defendant that she had by mistake failed to keep a copy of this agreement when the original had been returned to UNY. And around November 1999, her assistant, one Jimmy Mok requested Dicky Chan of UNY to fax a copy of the contract to the Plaintiff, which is now page 9 of the bundle.

15.From the copy agreement, it shows that for year 1999, the Plaintiff was committed to a two times annual advertising sponsorship of $5,000 each. This will be deducted in 1999 12th Anniversary and 2000 Chinese New Year. The agreement was signed by the Defendant and PW1 said it was signed without her authority. And she had not initialled on this contract.

16.PW1 further submitted that by entering into the trading term with the added commitment of annual advertising sponsorship, the term was less favourable than preceding year. As a result the Plaintiff suffered damage by having to pay the sponsorship of $10,000 in total.

17.It is also the evidence of PW1 that not only for UNY, but also in respect of Park'N shop and DCH, when there were additional benefit given to clients, such additional benefit could not be withdrawn in subsequent years. As a result, the Plaintiff has to continue to give such benefit to the clients in subsequent years, result in future loss to the Plaintiff. Counsel submitted that it is foreseeable that the damages for this breach of instructions would affect the terms in subsequent years and therefore they also claimed, apart from the loss in the contract term for 1999, future loss from year 2000 to 2005.

18.It is conceded by the Plaintiff that for the UNY's contract, the sponsorship payment for year 2000 had not been paid. However, the Plaintiff argued that the liability had been incurred and while UNY had not demanded for payment yet, the Defendant is still liable to pay for such amount. I shall come back to the issue of damages later.

19.It is the evidence of the Defendant that when she negotiated the trading term of UNY, she also reported from time to time to PW1. She also denied that PW1 ever instructed her that no trading terms less favourable to the Plaintiff than previous years might be offered. When she signed the UNY contract, it was with the prior approval of PW1, and the inclusion of annual advertising sponsorship was with the prior approval of PW1.

20.When PW2 was giving evidence, it has been put to her that the $10,000 annual promotion had been provided to UNY in the preceding year. PW2 was requested specifically to check the account document of the Plaintiff and on her investigation, she found no record of such payment. The Defendant has no evidence of similar payment in previous years.

Re: DCH

21.The Defendant was also instructed to negotiate with DCH for the trading term for the year 1 July 1999 to 31 December 1999. Relatively speaking, DCH is a new client having business with the Plaintiff for two years by then. PW1 again said she had specifically instructed the Defendant not to enter any trading term less favourable than previous year's. It appeared that she knew nothing about this contract any more until late August 1999. Pursuant to the new term agreed, DCH started to deduct promotion sponsorship in or about August 1999.

22.Page 16 of the bundle shows a letter signed by the Defendant which offered to give a promotion fund of HK$15,000 to support the promotion of the Plaintiff's product in 1999. PW1 said this offer was not with her approval and the Defendant was not entitled to make such an offer.

23.In about August 1999, the Defendant presented the trading agreement with DCH to the Finance Department. PW2 however rejected the agreement as it did not bear the signature of PW1. However, she did take a copy of the contract for reference and requested the Defendant to get the signature or countersign of PW1. PW1 said the agreement was not shown to any body again until after the Defendant left the Plaintiff's company and the agreement was located with the assistance of the secretary of the Defendant. PW1 discovered that the agreement was signed by the Defendant without her approval. She then also discovered the letter which appeared at page 16 and 17 of bundle B. PW1 said she had not seen this letter before and had not approved the content.

24.PW1 also recalled in August, she was informed by the Finance Department that DCH deducted some promotion fund. She then informed the Defendant that such payment was not acceptable to the Plaintiff. PW1 said the Defendant told her that she had not agreed with DCH on this promotion fund and would write to DCH for clarification. She then believed the Defendant issued the second letter at page 17.

25.PW1 also said that for the year 1999, there was a new incentive rebate provision in the trading term. This was not approved by her. However, the clause had not been called into operation and therefore the Plaintiff suffered no loss.

26.The Plaintiff adopted the same argument for future loss and damages and claimed that the Plaintiff is entitled to future loss for year 2000 to 2005. In fact, the promotion funding was increased in year 2000 to $20,000. The Plaintiff argued that the promotion funding was given to DCH by the breach of the Defendant. The increase in the funding in year 2000 shall also be compensated by the Defendant. Accordingly the Plaintiff claim future loss for year 2000 to 2005 at $20,000 a year.

27.It is the evidence of PW3 that while she was negotiating with DCH on the promotion fund, DCH said they have provided the promotional display for the Plaintiff, although they has no evidence produced by DCH. There is again no investigation carried out by the Plaintiff or action taken by the Plaintiff to challenge the version of DCH. PW3 further commented that such promotional display does not require any payment. And in any event, it would not cost $5,000 each time.

28.The Defendant in giving evidence said the contract terms were agreed to by PW1. When she started negotiating the terms, one Raymond Wong on behalf of DCH informed her that in the previous years, the Plaintiff had given a promotional fund/sponsorship. After she obtained the agreement of PW1, she agreed to the request.

29.When she was informed by PW2 that DCH deducted $5,000, DCH had not arranged any promotion for the Plaintiff. Accordingly she had to issue the letter at page 17 and she had requested PW3 to follow up the matter.

Re: Park'N Shop

30.The trading terms with Park'N shop was not signed by the Plaintiff with the Defendant. A limited company called Gold Halo International Limited was wholly owned by the Plaintiff and was authorised to enter into contract on behalf of the Plaintiff with Park'N shop. Counsel the Plaintiff submitted that the Plaintiff is the principle behind, and they suffered the loss. Accordingly the Plaintiff is entitled to claim against the Defendant for the loss they suffered.

31.In any event, it is not disputed that the Defendant had been instructed by PW1 to negotiate the trading term with Park'N shop for the year 1999. There is no further mention about the result of the negotiation between the Defendant and Park'N shop. PW1 said without her consent or knowledge, the Defendant has issued a letter at page 55 of bundle B to Park'N shop offering to increase the incentive rebate to 6%. This was 0.5% higher than the preceding year. It is not disputed that by the same term offered, an additional incentive rebate had been removed. On or about 20 August 1999, Park'N shop wrote to Gold Halo for the attention of PW1 confirming that their offer has been accepted and attached the new trading agreement for the Plaintiff execution.

32.PW1 admits that she received the letter dated 20 August 1999 from Park'N Shop enclosing the 1999 Trading Agreement. She found that the terms were not in accordance with the terms of the previous year. She took up the issue with the Defendant and was only informed orally by the Defendant that these terms had not been finalised and the increase was suggested by Park'N shop. Hence she kept the trading term in her custody and did not sign or return the document to Park'N shop.

33.The Defendant said the terms offered to the Park'N shop was with the prior approval of PW1. And she also commented that the increase of 0.5% was a nominal increase. A concession was given by Park'N shop that there will be no additional incentive rebate.

34.There are also comments on some other contracts that the Defendant had signed without the prior approval of PW1. In particular, the contract in relation to Wellcome and Carrefour were subsequently approved by PW1. There is no direct claim on these contracts and I shall come to these matters in my assessment of the evidence.

Jurisdiction

35.The Plaintiff claims against the Defendant for damages resulting from the Defendant's breach of employment contract. The first issue before me is whether this is a case within the jurisdiction of the Labour Tribunal. If the answer is yes, I have no jurisdiction to hear this case.

36.Paragraphs 1 to 10 of the Re-amended Statement of Claim set out the terms of employment of the Defendant with the Plaintiff contention that the Defendant has been in breach of her employment contract. Paragraph 10 reads:-

"Wrongfully and in breach of the Defendant's duty set out in the Handbook and/or the implied term of the Employment Agreement, the Defendant disobeyed the instructions given to her by the General Manager entered into [contracts] on behalf of the Plaintiff without specific instructions and/or authority from the General Manager and/or upon entering into the aforesaid agreements and/or offers to the said companies concealed the facts from the Plaintiff."

37.The Plaintiff then set out the particulars of the breach and stated in paragraph 11 that "by reason of the breaches aforesaid, the Plaintiff has been bound to perform in accordance with trading terms, which were harmful to the Plaintiff and has thereby suffered loss and damages".

38.The schedule of the Labour Tribunal Ordinance provides, inter alia that "a claim for a sum of money which arises from the breach of a term, whether express or implied, of a contract of employment, whether for performance in Hong Kong or under a contract to which the Contracts for Employment Outside Hong Kong Ordinance (Cap 78) applies" shall be within the jurisdiction of the Labour Tribunal. The issue whether the claim for general damages arising from the breach of employment contract is within the jurisdiction of the Labour Tribunal has been considered in Labour Appeal cases. The line of authorities has been summarized by H.H. Judge Li in MONES, CELESTINA SALDIVAR v. LUI SIU HUNG (Labour Tribunal Appeal No. HCLA 81 OF 1999).

The state of the law can be summarized below:-

National Ebauch Ltd. v. Rishi Kaumar Bhatnagar [1981] HKLR 114

"Section 7 of the Labour Tribunal Ordinance (Cap. 25) confers exclusive jurisdiction on the Labour Tribunal in relation to those claims which are specified in the Schedule to the Ordinance. Paragraph 1 of that Schedule confers jurisdiction on the Tribunal in relation to a "claim for a sum of money", which arises from the breach of a term, whether expressed or implied, in the contract of employment.

Is a claim for liquidated damages "a sum of money" within the meaning of that Schedule's Paragraph 1 of the Explanatory Memorandum, which was annexed to the Labour Tribunal Bill on its publication states

"This Bill establishes a tribunal, to be known as the Labour Tribunal, the jurisdiction of which is at present restricted to claims in respect of liquidated sums arising out of a breach of contract of employment, though there is provision for its jurisdiction to be changed by resolution of the Legislative Council."

Paragraph 3 contains a passage, which is to the same effect

"Part III deals with the jurisdiction of the tribunal. Clause 7 confers on the tribunal the jurisdiction set out in the Schedule. This is limited to claims for money arising out of a breach of contract of employment or statutory duty."

It seems to me that the ordinary meaning of the phrase "a sum of money" is that it is an ascertained sum. This view, so far as the Labour Tribunal Ordinance is concerned, is reinforced by the passages to which I have referred in the Explanatory Memorandum, which indicate that the intention of the Legislature was to exclude claims for unliquidated damages. This seems to me to be in accordance with the general intention of the Ordinance, which was to provide a simple informal forum without lawyers to deal with relatively simple claims which can be easily quantified.

I have, therefore, come to the conclusion that a claim for a sum of money arising from a breach of contract, does not include a claim for unliquidated damages. I thus agree with the ruling of Mr. Eric Li, the Presiding Officer in Labour Tribunal Claim No. 2352 of 1979 to the same effect.

In the result, therefore, I find that this court has jurisdiction to try the action." per Roberts CJ at 115

Panalpina (Hong Kong) Ltd. v. Ulrich Haldemann [1983] HKLR 275

"The defendant relied principally on the decision of Roberts, C.J. in National Ebauch Ltd. v. Rishi Kaumar Bhatnagar [1981] HKLR 114, to the effect that the tribunal's jurisdiction was limited to claims for liquidated damages and that the High Court had jurisdiction to hear claims for unliquidated damages. The operative words in the schedule are:-

"1. A claim for a sum of money which arises from
(a) the breach of a term, whether express or implied, of a contract of employment....

3. Notwithstanding paragraphs 1 and 2, the tribunal shall not have jurisdiction to hear and determine a claim for a sum of money, or otherwise in respect of a cause of action founded in tort whether arising from a breach of contract or a breach of duty imposed by a rule of common law or by an enactment."

Liquidated damages arise "where the parties to a contract, as part of the agreement between them, fix the amount which is to be paid by way of damages in the event of breach, ... as a genuine pre-estimate", per McGregor on Damages 14th edition paragraph 341. It is wholly exceptional to find such a provision in a service agreement. It is equally wholly exceptional to obtain specific performance of a service agreement. It follows that practically every case involving a breach of a service agreement gives rise to a claim for unliquidated damages, see Yip Wan-chiu v. Magnificent Industrial Ltd. [1974] HKLR 183. Section 8A of the Employment Ordinance (Cap. 57) may have added in Hong Kong a special category of statutory liquidated damages in certain circumstances. But this is only since 1975 and it cannot affect the construction of a 1970 ordinance.

But to say that damages are unliquidated is not to say that they are general in the pleading sense, or at large. With very few exceptions, e.g. loss of reputation, any more recently loss of a holiday, damages for breach of contract are not general but special, and have to be precisely particularised and quantified. Contracts of service are no exception to this. The claim here was thus properly particularised and quantified. In an attempt to defeat this application and to bring himself specifically within the National Ebauch decision the defendant applied for leave to amend the counterclaim (inter alia) by deleting the particulars. But when I pointed out that these particulars were essential to the claim, whether it was pursued in this court or before the Labour Tribunal, the application for leave to amend was abandoned.

In my judgment the phrase "sum of money" must be construed in the light of the fact that practically every claim for "breach of a term ... of a contract" will be for damages unliquidated in law but quantified in practice. It follows. I think that the phrase must cover such claims. I agree with Roberts, C.J. that the legislature anticipated a "quantified" claim and a claim that was "ascertained" or ascertainable. But I regret that I cannot agree that this makes the claim one for liquidated damages, or that it limits the tribunal's jurisdiction to such claims. This conclusion seems to me to be supported by paragraph 3. No claim "founded in tort" can be for liquidated damages. It may contain a calculated or special damages element; but the bulk is likely to be for general damages. I am much comforted to know that the same conclusion was reached by O'Connor. J. on 18th December 1979 in Stewart and Others v. The Hong Kong Philharmonic Society Limited H.C. Civil Action No. 3031/79. Unfortunately as this decision was not reported, it was not cited to Roberts, C.J.

39.There are a few other cases considered in the judgment of H.H. Judge Li. In summing up, H.H. Judge Li said the point is not certain.

40.Speaking for myself, I agree with the judgment of Mr. Justice Roberts CJ as further elaborated by Hunter J. The phase "a sum of money" should be interpreted as damages unliquidated in law but quantified in practice. This must be referring to the benefit conferred upon the employees by the Employment Ordinance or the contract as protected by the Employment Ordinance. But the damages claim by the Plaintiff here is clearly general damages, unliquidated, and not qualified in practice. The claim is not within the jurisdiction of Labour Tribunal.

41.Another point to be considered is whether the Plaintiff may claim for damage to the Park'N Shop. The trading term was signed by Gold Halo with Park'N Shop. There is no challenge that the Plaintiff is the principle behind and I rule that the Plaintiff may take action on that contract.

42.I shall now proceed to deal with the issues for my determination. The first issue is whether the Plaintiff has been in breach of the employment contract.

Findings

43.While it has been stated by PW1 that this document has not been executed with her authority, she also gave no details of her knowledge of the negotiation going on before she came to know that the contract has been executed without her knowledge. It is not disputed that the Plaintiff and the Defendant had regular meetings every Monday, Wednesday and Friday on the marketing matter. While I am not shown any of these minutes, one could imagine that PW1 would enquire or the Defendant would report the progress of the negotiation to PW1. It is not disputed that the practice between the Plaintiff and their customer is to continue the trading on the old term while moving into the new year. Hence the Plaintiff continued to supply goods to their customers before the terms were agreed. It must be in the interest of PW1 as the Director and General Manager of the Plaintiff to ensure these trading terms be concluded speedily. Or at least, it speaks against common sense that she paid little attention to what was going on but left it entirely to the Defendant. If she did leave it entirely to the Defendant, it only suggests that the Defendant was given a lot of trusts and authority in handling these contracts, which is not the case of the Plaintiff.

44.If there had been discussion, then one would imagine what had been discussed. As PW1 herself agreed, during these weekly reports, the Defendant could have informed her of the progress. Then one would ask what information was given by the Defendant. PW1 has not accounted for her knowledge.

45.While there has been a lot of comments on the Defendant for not providing the copy or original document that she signed to the Plaintiff, it is not disputed that for the agreement signed with DCH, she in fact provided the original or copy to the Account Department. The Account Department refused to accept it having noted that PW1 did not sign thereon. PW2 said she returned the document to the Defendant and she also chased after the Defendant many times for the document in the following months. It must be noted that by receiving a copy, PW2 actually had noticed of the terms of the agreement. If the countersignature of PW1 could not be obtained in a short period of time, I would be very surprised that she would not have reported the matter to her senior or contact PW1 direct for clarification. Otherwise, the contract would be binding on the Plaintiff.

46.I was told by PW1 and PW2 that this is an internal security mechanism to ensure that all contract sign got the approval of PW1. If that is such a mechanism, when PW2 discovered a document without the signature of PW1, it speaks against any sense that the document was simply returned to the Defendant for her to rectify the mistake. There must be a mechanism for this matter on discovery be referred either to PW1 or to someone senior in the company to investigate. Otherwise this system is useless. I do not believe that there is such a system at all.

47.I have also observed the demeanour of PW1 when she was giving evidence. She was trying to impress me to be a very honest witness. But quite to the contrary, I found that she was exaggerating. In particular, when she was cross-examined by Defence Counsel as to whether she could negotiate a better term with Park'N shop than the Defendant, she speaks with confidence 'yes'. But she could not explain why she could be in a better position than the Defendant. If according to her evidence, she knew very little or nothing about the negotiation there was going on, how could she be so sure that she could negotiate a better term?

48.And on the trading term received from Park'N Shop, PW1 took no action except asking the Defendant about it. But the letter explicitly referred to a letter from the Plaintiff, and that "your offer has been accepted by our company". In her position, if she said no offer could be made without her authority, she must check who has made an offer to Park'N Shop in the first place. She is just trying to erasing the question by saying that the Defendant informed her that the deal has not been concluded.

49.In cross-examination, PW1 also said that they would not accept the term worse than preceding year because the profit margin was low. However, when asked what she would do if Park'N shop insisted on the 0.5 % increase, she did mentioned that she would proceed to get approval from senior executive of the company. When she was asked whether that is equivalent to conceding an increase to Park'N shop, she tried to explain that it cannot be consider to be an increase, because if they are going to give that 0.5% increase, they would term it in other ways. Whatever terminology or title you are going to label the additional benefit to Park'N shop, it is an increase in the costing of the Plaintiff. Hence they would end up in the same way. At this point, PW1 become extremely erasive and reluctant to answer Counsel's question directly.

50.In this aspect, one could also look at the contracts sign with Wellcome and Carrefour. In a memo by the Defendant to PW1, she expressly mentioned that these documents had been signed as discussed. There was no protest by PW1 until she gave evidence. Surely there is no written record of any complain against the Defendant for signing this contract without her knowledge or approval. And she endorsed to these contracts. While she tried to explain that this is by then her mistake in thinking that this was one single incident, that is not credible.

51.Having taken all the above matters into accounts, I find PW1 is not reliable in her account of the negotiation of this contract. I have great reservation on evidence given by PW2 but in any events, her evidence is not directly helpful. And I did not believe both evidence of PW1 or PW2 that there is an internal checking system for all contracts to be signed by PW1.

52.There have been a lot of comments by Plaintiff's Counsel on the evidence given by the Defendant. These are particularly so in relation to her memory of how these agreements were signed. I accept the fact that these documents are out of her hand for a while and she come back into the picture by looking at the document now discovered. Some blurs in memory is understandable. I reminded myself that where her evidence is unclear, I should not rely on her evidence. However, as a whole I found that the Defendant is very honest and trustworthy. She is given her evidence from the best of her memory and notwithstanding the very able cross-examination by Mr. Hung on behalf of the Plaintiff, her evidence has not been shaken.

53.I accept her evidence in full that she had reported the progress of the negotiation from time to time. And I accept her evidence that the trading term were agreed by PW1 and she signed having obtained PW1's approval. I therefore found that the Defendant has not been in breach of her employment contract as alleged.

54.And to complete the picture, I also adopt the submission by Defence Counsel on damages. The Plaintiff in this case tried to claim damages on the basis that the new terms was worse than the old terms. However, the damages suffered by the Plaintiff for year 1999 must be the difference between the contract terms and the contract terms that they may be able to obtain. We have no evidence from Park'N shop, DCH, UNY or JUSCO to confirm the terms that they are prepared to agree. I appreciate that this evidence may not be possible as these companies may not wish to disclose their trade secret. But the burden rest on the Plaintiff prove this point. The Plaintiff has not produced any evidence upon which I could draw the inference that the Plaintiff would be able to conclude the contract on terms of the preceding year. I have no information as to the proposed terms and negotiation taken place in all these contracts. I simply have nothing to suggest that the trading terms for the preceding years would be used for the trading term in 1999. It is sufficient for me to refer to a chart prepared by the Plaintiff in respect of the trading term of Park'N shop. It shows that the term with Park'N shop changes from year to year. That would be sufficient to say that the terms for 1999 may be increased. But by how much, I don't know. If the Plaintiff could not have evidence on this aspect, even if it is successful with the claim, they would only be entitled to nominal damages.

55.And on the claim for future loss, the Plaintiff has not been able to establish that the loss in future must be accountable to the breach (if proven), by the Plaintiff. It is very simple this, in all subsequent years, each contract had to be negotiated afresh. How can one rule out the possibility that a worser term was contracted because the officer-in-charge is not skillful enough; how can one rule out the possibility that due to the down turn of economy, greater concession has to be given to Park'N shop or any other clients. If the Plaintiff could not rule out all these possibility, any future loss cannot be said to have been caused by the Defendant.

56.One last point that I wish to mention is the loss in relation to UNY and DCH. These are promotion fund to obtain promotion activities. In the case of DCH, the Plaintiff had at least utilized one promotion activity in 1999. I was not told about the promotion usage in subsequent years. But the presumption must be these promotional activities had been carried out and the Plaintiff obtained benefit. The Plaintiff must account for this benefit. I appreciate that the Defendant did not plead mitigation. It is not mitigation as such. In all situation for an assessment damages, the court would not allow the Plaintiff to enrich themselves unjustly. In such a circumstance, if the Plaintiff make use of that opportunity, then they must account to the Defendant the benefit they have obtained. Otherwise they are unjustifiably enriching themselves, and a court would not allow them so to do.

57.Base on the above reasons, even if the Defendant did commit a breach, the Plaintiff has not proven its loss. At the highest, they might be entitled to nominal damages.

58.In the circumstances, Plaintiff's claim is dismissed with an order nisi for cost to the Defendant with certificate for counsel to be made absolute within 14 days.

Representation:

Mr. Andy Hung instructed by Messrs T.H. Koo & Associates for Plaintiff.

Mr. Ling Chun Wai instructed by Messrs. Wilkinson & Grist for Defendant.