Shaw Brothers (Hong Kong) Ltd v. Wang Yu
Read the full judgment text of HCA 1274/1970 on BabelCite. This High Court CFI judgment.
1. The plaintiff is a well-known company which makes and distributes films. Though it is Hong Kong based it distributes films in all the countries of South East Asia as well as Hong Kong.
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HCA001274/1970 IN THE SUPREME COURT OF HONG KONG (ORIGINAL JURISDICTION) ACTION NO.1274 OF 1970 -----------------
Coram: Briggs, J. in Court. Date of Judgment: 2nd June, 1971. ----------------- JUDGMENT ----------------- 1. The plaintiff is a well-known company which makes and distributes films. Though it is Hong Kong based it distributes films in all the countries of South East Asia as well as Hong Kong. 2. The defendant is a well-known film actor who specializes in acting in, what for the purposes of this case, have been called "Swordsman films". These may be described as costume pictures in which the characters, who are usually armed with swords, engage in a great deal of fighting. Such films are very popular in South East Asia, especially in Hong Kong. The defendant also acts in other films playing characters requiring gymnastic and fighting abilities. 3. The plaintiff first employed the defendant as an actor in 1964 at a modest wage. Due to a combination of the talents of the defendant and the facilities provided for the exploitation of those talents by the plaintiff, the defendant quickly advanced in his profession. 4. His contract with the plaintiffs was renewed on June 25th, 1966. Under this, the defendant received $2,000 for each completed picture, but before the expiration of this contract the parties entered into another contract on February 8th, 1968. This contract increased the sum payable per picture to $15,000. This was done on the initiative of the plaintiff. 5. The reason for this was that at the time, two films in which the defendant had played the lead, namely 'One Armed Swordsman' and 'The Assassin', had been recently screened and both had been a great box office success in Hong Kong. Indeed, they each grossed in Hong Kong an amount more than double the amount of any previous film in which the defendant had appeared. As a result of the new contract the accounts show that the income of the defendant rose from $2,000 per month to $6,250 per month. 6. The contract dated February 8th, 1968 as is the case with contracts of this type, is in very stringent terms. 7. It was agreed that the defendant should work for the plaintiff and for no one else for a period of five years i.e. from February 1st, 1968 to January 31st, 1973. The scope of work covered by the contract includes acting in films, on the stage and television and in addition making records, broadcasts etc. 8. Clause 2 of the agreement reads in translation as follows. 'Party A' is the plaintiff and 'Party B' is the defendant.
9. Clause 7 reads as follows:-
10. Clause 14 reads as follows:-
11. Despite the wording of these clauses the plaintiff paid the defendant a regular sum of $3,125 per fortnight, commencing as from February 1st, 1968 until the end of February, 1970. In the account between the parties these sums were stated to be advances against the amounts which would become due under the contract when films were made at the rate of $15,000 per film, for 25 films. From the defendant's point of view, in view of the wording of clause 14, it was very necessary for the plaintiff to provide films in which the defendant could act. The dangers of entering into a contract with such a term as clause 14 are self evident. By not providing an actor with sufficient films but advancing him regular sums under the contract the actor might find himself bound to work for the plaintiff for a long time at no remuneration and with no prospects of employment by another company. However I have seen the account of the defendant with the plaintiff from August 1964 until February 1970. And throughout the whole period he received regular payments per month or per fortnight irrespective of the number of films made. And the danger to the actor inherent in such a contract was never in question since no contract was ever completed, the defendant being provided with a new and more advantageous contract before the expiration of the old in each case. 12. On April 4th, 1968 another film starring the defendant was issued called 'Golden Swallow'. This was also a huge box office success. Two further films, 'Sword of Swords' and the 'Return of the One Armed Swordsman' followed. Both of these were successful, indeed the 'Return of the One Armed Swordsman' was the most successful film in which the defendant had appeared up to that time. This film was shown in Hong Kong between 28th February and 12th March, 1969. 13. On April 1st, 1969 the plaintiff and the defendant signed an agreement which is supplemental to the Agreement of February 8th, 1968. Without consideration the plaintiff agreed that as from that date the defendant should receive $15,000 in addition to his remuneration under the former contract for any film which was made and completed after that date. 14. At that time the defendant was engaged in the production of a film called 'My Son'. The new agreement did not apply to that film, the shooting of which had been commenced before the date of the second agreement. Indeed, the defendant only appeared in one film for the plaintiff after the second agreement. This was a film called 'Fight between Dragon and Tiger' or 'Chinese Boxer'. It reached the screen in Hong Kong in November 1970. And it was an enormous success. It was the greatest success in Hong Kong of any film in which the defendant had starred up to that time or since. It grossed over two million dollars in Hong Kong. This is more than any film made by the plaintiff in 1970. 15. The plaintiff's case is that the defendant has broken the contract which he signed with the plaintiffs on February 8th, 1968. And that he has made films in Taiwan and Japan contrary to the express terms of that contract. 16. The evidence shows that the defendant left Hong Kong on or about March 10th, 1970. On or about the same date he caused advertisements to be printed in various Hong Kong newspapers to the effect that he had disassociated himself from the plaintiffs as from March 1st, 1970. Copies of the advertisements were exhibited and they are in the clearest possible terms. It is common ground that the defendant has made films for a company other than the plaintiff, in Taiwan and Japan. Those films have been shown in Hong Kong and at least one of them - 'Zatoichi and The One Armed Swordsman' - was a great success. 17. The defendant said he was dissatisfied with the terms of his contract with the plaintiff chiefly because the plaintiff did not provide him with enough parts to play. Late in March 1969 he had discussions with Mr. Shaw, who is the Managing Director of the plaintiff, in which he put his point of view. The defendant is a man of temperament with a quick temper and he admitted that these discussions were stormy. 18. His evidence was that he told Mr. Shaw that he had thought of a novel idea for a film, a story based on a comparison of the martial arts of China with those of Japan. He wanted to write the script, act the chief role and direct the film himself. For this he wanted $15,000 over and above the $6,250 per month which was being regularly paid for the period of the making of the film. And, in addition 5% of the profits made by the film. He was to receive no money for directing the film. 19. The defendant also said that on April 8th Mr. Shaw accepted his suggestion. He said it was agreed that the film was to be written, acted and directed by the defendant. The defendant also said that Mr. Shaw agreed to the terms of the payment suggested by the defendant and, and this is the important part of his evidence, the parties agreed to cancel the agreement of February 8th, 1968. He said that each party destroyed his copy of the two agreements i.e. the agreement of February 8th, 1968 and the supplementary agreement of April 1st, 1969. The agreement concerning the new film was an oral agreement, its terms were not reduced into writing. 20. He said moreover, that this oral agreement was carried out. At that time he was still working on the film called 'My Son'. He finished this. He wrote a script for the new film which he was to direct himself and was paid $3,000 for it. This was the film called 'Fight between Dragon and Tiger' or 'Chinese Boxer'. Shooting started on July 9th, 1969 and was completed on February 17th, 1970. As I have said it did not reach the public of Hong Kong until November 1970 when it proved to be the greatest of the defendant's successes. The defendant said the contracts of February 8th, 1968 and April 1st, 1969 having been terminated, this film having been completed, and, as he had already been paid, his relationship with the plaintiff was at an end. There was nothing to detain him in Hong Kong so he left for Taiwan, which is his home and where he was soon engaged making a film with another film company. 21. Mr. Shaw for the plaintiff denied that the parties had agreed to cancel the contracts. He said that the defendant was a difficult man to work with and was of an ebullient if not an aggressive personality and was uncooperative. In March 1969 during the shooting of 'My Son' the defendant left Hong Kong without permission and had to be fetched back at the instance of a Mr. Raymond Chow. 22. Mr. Chow was the Production and Assistant General Manager of the plaintiff up to April 1970. And he flits in and out of the story. He signed the supplementary agreement of April 1st, 1969 on behalf of the plaintiff and according to Mr. Shaw it was to him, Mr. Chow, that the defendant would carry any complaints. The defendant would deal with the Production and Assistant General Manager, Mr. Chow, and not with Mr. Shaw, the Managing Director, primarily speaking. 23. At present Mr. Chow is no longer with the plaintiff. He is a director of the firm which among other matters distributes films made by the defendant in Taiwan and Japan and the area of distribution includes Hong Kong. He was not called as a witness by either party. 24. As I have said, the defendant absented himself to Japan without permission in late March 1969, during the shooting of a film. He came back and was given the supplementary agreement of April 1st, 1969 which provided him with an additional $15,000 per film upon its completion. The obvious inference is that he was dissatisfied with the terms of the contract of February 8th, 1968 and in order to quieten that dissatisfaction and to secure his co-operation the plaintiff provided him with the supplementary agreement. He himself admitted his dissatisfaction and that the supplementary agreement was made to appease the defendant is clear from the evidence of Mr. Shaw. 25. Mr. Shaw said he never had any interview with the defendant over the terms of his contract in early April 1969. He, Mr. Shaw, was very satisfied with the terms of the contract and he made a supplementary agreement at the request of the defendant. The defendant was a most valuable asset to the plaintiff and the plaintiff had no intention of cancelling his contract. Because the defendant was so pressing it was agreed that he would write, act and direct in the film 'Chinese Boxer'. This is the first time that the defendant had turned his hand to directing a film. And Mr. Shaw said that to make a film with an untried director was taking a considerable risk. However, he had taken such risks before and I was shown a list of no less than eleven persons who had directed their first films for the plaintiff. 26. Mr. Shaw's evidence therefore was that the plaintiff did all they could to please the defendant short of cancelling his contract. They increased his remuneration and allowed him to direct in his own film. The first indication that he had of the defendant's claim that the contract was at an end was when he read the notices in the newspapers announcing that fact, to which I have already referred. 27. Upon hearing of this he told Mr. Chow to go to Taiwan to fetch the defendant back. Later, he also wrote the defendant a letter through his solicitors in Taiwan. This letter was exhibited and is in the usual form pointing out that the defendant was bound to work for the plaintiff until the expiration of his contract i.e. until January 31st, 1973. It is obvious from its terms the plaintiff was aware that the defendant had joined another company already. It requested the defendant to return to Hong Kong to continue working for the plaintiff and threatened legal action for breach of contract. 28. This was answered on behalf of the defendant by a solicitor's letter which states that the contract between the plaintiff and defendant was at an end. The defendant told the court that the contract here referred to was the oral contract which he said was made between Mr. Shaw and himself. The plaintiff took it to refer to the two written contracts. 29. I have heard the evidence from both parties and I find as a fact that there was no such oral agreement replacing the two agreements of February 8th, 1968 and April 1st, 1969. 30. There is no doubt that the defendant was a most valuable asset to the plaintiff, always provided they could command his exclusive services. This was amply provided for in the contract of 8th February, 1968. The supplementary agreement of April 1st, 1969 is also expressly stated to be made "subject to the privileges and obligations" of the previous contract. It is beyond belief that the plaintiff would cancel a contract which gives them exclusive rights to the services of the defendant 'til the end of January 1973 and in return only get the promise to write the script of, act and direct in an unknown film. The more especially since the defendant was an untried director. In addition the suggested oral contract is said to have been made only 7 days after the signing of the supplementary agreement which was unilateral and made for no consideration. 31. There was no suggestion that the so-called oral agreement contained any stipulation renewing the exclusive services of the defendant. 32. The account of the defendant with the plaintiff shows that he was paid at the rate of $3,125 per fortnight up to the end of February 1970. The date of the so-called oral agreement was April 8th, 1969. In 11 months the defendant therefore received $68,750. In addition he was paid $3,000 for the script and $15,000 for acting in the film. What was the $68,750 for? I was told that a very experienced director might possibly be paid $60,000 for a picture. But certainly not an untried director. And in any event the defendant agreed that he was to receive nothing as a director, but said that it was agreed that the "usual salary" would be paid. 33. In the witness box the defendant gave an explanation which I find difficult to accept. He had borrowed $75,000 from the plaintiff on February 8th, 1968 which was the date the contract was signed. This was being regularly paid off by deductions from his monthly advances. By April 1969, about $20,000 of this sum remained unpaid. The defendant said that the plaintiff continued to pay him the amounts of the monthly advances because he, the defendant, owed the plaintiff this money i.e. the $20,000. If the plaintiff did not pay him, he said, the plaintiff would be unable to receive the monthly deductions. Incidentially, the whole sum was paid off by the end of October, 1969. 34. It is obvious, and I find as a fact that the monthly sums paid to the defendant up to the end of February 1970 were paid under the provisions of the contract dated February 8th, 1968, and the $15,000 which was paid for the film 'Chinese Boxer' in two sums of $7,500, was paid under the supplementary agreement dated April 1st, 1969. 35. As I have found as a fact that there was no cancellation of the contracts it follows that the defendant is in breach of contract. 36. I now come to the relief sought. The plaintiff asks for an injunction and damages for breach of contract. 37. I will say at once that this is a case where the grant of an injunction is eminently suitable. This case is very similar to the case of Warner Brothers v. Nelson(1). And the reasons given in the judgment of Branson, J. in that case for the granting of an injunction apply likewise to the present case. There will be an injunction in the terms prayed for, except that it will be confined to the period of the contract of 8th February, 1968, i.e. it will last up to 31st January, 1973. And it will be confined to the jurisdiction of the Court. 38. The question of damages presents a more difficult problem. As I have found that the defendant is in breach of his contract the plaintiff is entitled to damages if only to nominal damages. 39. An injunction looks forward. It deals with damages in the future. But of course it is no remedy or relief for damages already suffered. Apart from what I have said above, the Statement of Claim does not particularise any loss or damage, whether loss of profits or not. 40. It is the plaintiff's case that they have suffered damage in that they have been deprived of the services of a very prominent film star. The contract of 8th February 1968 contained a clause which reads as follows:-
This clause has not been invoked in these proceedings. Had they relied upon it the plaintiff would have had to decide whether to pray for an injunction or whether to pray for the liquidated damages mentioned in the clause. They have not done so. The plaintiffs have not terminated their contract with the defendant. They are relying on it. Mr. Zimmern for the plaintiff says that is a case for unliquidated damages. 41. Mr. Swaine for the defendant resists the claim for damages. He says in effect that the plaintiff must prove actual damage. He quoted a passage in volume 25 of Halsbury Laws of England (3rd Edition) which says "the foundation of any action by a master against a servant who has left his employment without due notice must be actual damage". And I accept that as a correct statement of the law [See Para.987 and the case there quoted.] The contract calls for the making of 5 films per annum. There can be no question of damages because only two and a half films and not five were made in the first year of the contract because the plaintiff did not ask the defendant to make five films. Mr. Shaw said that it was never in anyone's mind to question that the defendant did not make 5 films in that year. And in view of the history of the method in which the defendant was paid throughout his association with the plaintiff, I can understand and accept this. Unless a film was offered to the defendant and he refused to act in it or neglected to do so the plaintiff cannot complain. To allow them to do so would be equivalent to allowing a person to secure damages for his own default. 42. However about the subsequent and future years of the duration of the contract, when the defendant made and will make no films for the plaintiff, has the plaintiff proved damages? Has he proved a loss under the contract? 43. There was evidence to show that the plaintiff has been and is making very considerable profits. The number of films made in 1970 exceeded those made in 1969 and those made in 1971 will certainly exceed that figure. This applies to the number of Swordsman films as well as to the total number of films made by the plaintiff. There is also evidence that there is more than one star actor actively making Swordsman films under contract to the plaintiff. For example, to name only three, LO Lieh, Ngok Wah and David Chiang all made successful films of that nature in 1969 and 1970 for the plaintiff. Indeed, I was told that David Chiang is a very talented actor indeed. He was voted the best male actor in South East Asia for 1970 in a competition held in Indonesia. And he is now the leading Swordsman player under contract to the plaintiff. He starred in no less than 5 films for the plaintiff in 1970. And a recent film of his called 'The New One Armed Swordsman' grossed more in Hong Kong than the most important Swordsman film made by the defendant since leaving the plaintiff. Mr. Shaw said that the loss to a film company from a star leaving that company could be very great. But in my view it may well be an immeasurable loss. I was not told how much of the gross takings of a particular film is due to the lead being taken by a particular star. It would be unrealistic to try to work out such a figure. And the figures which have been put before me show that certain of the defendant's films made only a small profit while others earned large dividends. The film world is extremely speculative as was recognized in Warner Brothers v. Nelson.(1) And the relative success of a film depends upon very many factors over some of which the plaintiff can have no control. 44. The plaintiffs have not proved to my satisfaction that they have suffered any actual damage I do not think that this is a proper case for an award of damages for this loss of the services of the defendant. In my view they are entitled to nominal damages for breach of contract only. 45. There will be an injunction in the terms indicated above, and nominal damages of $50. The plaintiffs are entitled to their costs.
2nd June, 1971. Representation: Zimmern (Deacons) for Plaintiff. Swaine (Stephen Lo & Co.) for Defendant (1) (1936) 3 All.E.R. 160. |