JEKCO ELEVATORS LTD v. MILLION HOTEL MANAGEMENT LTD

CAMP 101/2022

[2022] HKCA 810

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 101 OF 2022

(ON AN INTENDED APPEAL FROM DCCJ NO.1440 OF 2018)

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J U D G M E N T

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Hon Chu JA (giving the Judgment of the Court):

A.  Introduction

1.  This is the defendant’s renewed application for leave to appeal the judgment of His Honour Judge Herbert Au-Yeung (“the Judge”) dated 12 October 2021 (“the Judgment”). By the Judgment, the Judge entered judgment for the plaintiff’s claim in the sum of HK$135,300 as damages for the defendant’s wrongful termination of a lift maintenance service agreement, and dismissed the defendant’s counterclaim for damages occasioned by the engagement of another service provider to carry out remedial works.

2.  Having considered the papers filed in this application and the parties’ written submissions, we consider it appropriate to determine the application on paper without an oral hearing pursuant to Order 59 rule 2A(5)(a) of the Rules of the High Court Cap.4A.

B.  The Background

3.  By an agreement dated 28 May 2015 (“the 1^st Agreement”), the plaintiff agreed with the defendant to provide service and maintenance to two elevators at M1 Hotel North Point (“the Hotel”) at a monthly service fee of HK$6,000 for two years from 1 June 2015 to 31 May 2017.

4.  On 17 July 2017 (“the 2^nd Agreement”), the parties entered into a second agreement for two years from 1 June 2017 to 31 May 2019 on the same terms except that the monthly fee was increased to HK$6,600.

5.  By a letter dated 15 September 2017, the defendant gave notice to terminate the 2^nd Agreement on the ground that the plaintiff’s service was unsatisfactory. The plaintiff regarded the termination as wrongful and constituted a repudiatory breach of the 2^nd Agreement, which it accepted by letter dated 19 September 2017.

6.  The plaintiff commenced proceedings against the defendant in the District Court for damages for repudiatory breach in the sum of HK$135,300, being the monthly fee for the rest of the contractual term of the 2^nd Agreement.

7.  The defendant disputed the claim contending that it was entitled to terminate the 2^nd Agreement by reason of the plaintiff’s persistent breach of the express terms of the 2^nd Agreement. The particulars of breach pleaded by the defendant are as follows[1] (respectively “1^st Failure” to “2^nd Failure” and collectively “the Four Failures”):

(1)  failing to provide competent technicians to carry out maintenance and repair service of the lifts;

(2)  failing to inform and/or explain to the employees of the Defendant the repair works required and the progress of repair works;

(3)  failing to ensure that the two lifts and their associated equipment and machineries were kept in a proper state of repair and in safe working order; and

(4)  failing to provide technicians to the Defendant’s premises as soon as possible in cases of emergency.

8.  It is also the defendant’s pleaded case that by reason of the Four Failures, the plaintiff was also in breach of the implied terms of both the 1^st and 2^nd Agreements in that it failed to carry out the lift maintenance service with reasonable care and skill and within a reasonable time, pursuant to sections 5 and 6 of the Supply of Services (Implied Terms) Ordinance, Cap.457.

9.  The defendant counterclaimed for damages for breach of the 2^nd Agreement in the sum of HK$213,300, which was the costs of engaging another service provider (“Sigma”) to carry out inspection and repair works to remedy the defects in the lifts.

C.  The Judge’s decision

  C1.  Breaches committed during the 1^st Agreement

10.  The core issue at trial was whether the defendant was entitled to terminate the 2^nd Agreement. The defendant relied on the Four Failures, which included incidents that happened during the contractual period of the 1^st Agreement[2]. The defendant’s case at the trial was that the plaintiff’s breaches should not be viewed in isolation but in cumulation, and that they were “congeries of defects”[3].

11.  The Judge did not accept the submission. The Judge considered that the authorities cited by the defendant[4] were only applicable to breaches committed under the contract that was being terminated, and did not support the defendant’s argument that cumulative breaches of one contract could justify the termination of another contract. The Judge held that breaches committed during the contractual period of the 1^st Agreement could not be taken into account in deciding whether the termination of the 2^nd Agreement was justified[5].

  C2.  Findings on the Four Failures

12.  In relation to the 1^st Failure (i.e., failure to provide competent technicians to carry out maintenance and repair service), the Judge held that it was unnecessary to discuss the incidents alleged by the defendant because none of them occurred within the contractual period of the 2^nd Agreement[6].

13.  In relation to the 2^nd failure (i.e., failure to inform and/or explain to the defendant’s employees the repair works required and the progress of the repair works), the Judge held that the plaintiff was under no obligation to inform or explain to the defendant the progress of the repair works or the works required to be done[7]. As to the failure to fill in the logbook or to advise the defendant to replace defective items, the Judge held that this was not pleaded as a ground justifying the termination of the 2^nd Agreement[8].

14.  The 3^rd failure (i.e., failure to ensure that the lifts and the associated equipment and machineries were kept in a proper state of repair and order) is relevant to the present application. The Judge found on the evidence that[9] (i) lift no. 1 at the Hotel had a number of problems, such as false overload alarm, sudden stoppage, and uncontrolled ascending or descending movements of the lift cab; (ii) among them, the main problem, as seen from the Occurrence Book for the month of June 2017, was repeated false overload alarm that had caused the lift to stop operating; (iii) on 6 June 2017, the plaintiff’s technician tried to fix the false alarm problem by resetting the electric board but the alarm went off again on 10 to 12, 17 and 26 June 2017; (iv) on 26 June 2017, the alarm sounded again just five minutes after the plaintiff’s technician had carried out repair and left; (v) the lift resumed normal operation after it was reset later that day[10]; and (vi) there was no further occurrence of false overload alarm after 26 June 2017.

15.  The Judge acknowledged that the false alarm problem only subsided after nearly 3 weeks, but held that it was not sufficient just to show that the lift had malfunctions because the defendant must also prove that the plaintiff had failed to maintain the lift properly that gave rise to the problems[11]. The Judge further held that the defendant had adduced no evidence to prove that it was the plaintiff’s breach of duty, as opposed to other factor beyond the plaintiff’s control, that caused the alarm to go off repeatedly in the way it did.

16.  The Judge did not accept the evidence of the defendant’s expert that the false alarm problem was due to “ageing” of the lift, because if this was the case, the problem would only go away after the aged parts had been replaced whereas, as a matter of fact, the malfunctions ceased in the first month after Sigma took over the maintenance work and before Sigma replaced any of the parts[12].

17.  For these reasons, the Judge held that the defendant had not discharged its burden to prove the 3^rd Failure[13].

18.  As for the 4^th Failure (i.e., failure to send technicians to the defendant’s premises as soon as possible in cases of emergency), the Judge held that the incidents relied on were irrelevant as they took place during the contractual period of the 1^st Agreement. The Judge was further of the view that, even if the breaches occurred during the 2^nd Agreement, the allegation should be rejected because there was no legal basis for the defendant’s contention that the plaintiff’s technician was obliged to arrive within 30 minutes after being notified, and that if there was a statutory requirement to do so, this had not been pleaded in the Defence and Counterclaim[14].

19.  As to other complaints that the defendant sought to raise at the trial, the Judge refused to consider them as they were not pleaded[15].

20.  In conclusion, the Judge held that the defendant had no valid ground to terminate the 2^nd Agreement, and the wrongful termination amounted to repudiatory breach, which was accepted by the plaintiff[16].

  C3.  Quantum of the plaintiff’s claim

21.  On the quantum of the plaintiff’s claim, the Judge rejected the defendant’s argument that the plaintiff could only claim damages but not the balance of the contract sum (i.e. the monthly fees for the remainder of the contractual term). His reasons are as follows[17]:

(1)  It is clear from the Statement of Claim that the plaintiff was suing the sum of HK$135,300 as damages and not as a debt.

(2)  The term of the 2^nd Agreement was undisputed. On the evidence, the defendant had stopped paying the monthly service fee after it terminated the 2^nd Agreement on 15 September 2017.

(3)  The defendant had not pleaded the grounds for challenging the amount of damages claimed by the plaintiff and the particulars of facts relied upon.

22.  The Judge further expressed agreement with the proposition in Ryoden Lift Services Limited v The Incorporated Owners of Rialto Mansion (unreported) DCCJ 36/2005, 17 June 2009, at §41 that “the prima facie measure of damages for wrongful termination of a contract for professional service is the contract price.”[18]

  C4.  The counterclaim

23.  The Judge dismissed the defendant’s counterclaim, which was premised on the quotation given by Sigma (“the Quotation”) setting out the repair works proposed to be done to remedy the defects, for two main reasons[19] as follows:

(1)  The Judge did not accept that the defects in the parts mentioned in the Quotation were defects for which the plaintiff had failed to replace the parts free of charge.

(2)  The evidence of the defendant’s expert on the need to replace the parts did not reflect the reality of the case. The lifts did not have malfunctions in the first month after Sigma took over and before it carried out replacement of the parts said to be defective. The defendant therefore failed to prove that the plaintiff was in breach by failing to replace the defective parts. This fact also corroborates the opinion of the plaintiff’s expert that there was no need to do replacement work because the defects recorded in the logbook were not due to defective maintenance work carried out by the plaintiff, and the lifts remained in safe working order without having to clear these so-called defects.

24.  The Judge nevertheless went on to consider the items of work in the Quotation and concluded that the defendant could not establish that the plaintiff was under any obligation to replace the alleged defective parts, and that some of the items were upgrading work rather than repairs[20].

25.  The Judge also rejected the defendant’s argument that a conventional sum of general damage should be awarded on account of the inconvenience and discomfort suffered by the plaintiff, on the ground neither the cause of action nor the relief for it had been pleaded[21].

26.  The defendant applied to the Judge for leave to appeal, which was refused by the Judge’s decision on 2 March 2022 (“Leave Decision”)[22].

D.  The renewed application for leave to appeal

27.  By summons filed on 16 March 2022, the defendant made the present renewed application for leave to appeal. The draft notice of appeal (“Draft NOA”) set out three intended grounds of appeal, which are in essence the same as those put forward in the application made to the Judge. They are as follows:

(1)  The Judge erred in not making a determination on whether the plaintiff was in repudiatory breach of the 2^nd Agreement by reason of the incident on 26 June 2017 when lift no. 1 uncontrollably descended from 27/F to G/F[23]. It was a serious incident based upon which the Judge ought to have concluded that the plaintiff was in repudiatory breach of the 2^nd Agreement. Further or alternatively, the Judge should have taken into account nine incidents of uncontrolled ascending and descending during the 1^st Agreement[24], which was a breach of the 1^st Agreement, and held that this together with the uncontrolled descending incident on 26 June 2017 were sufficiently serious to warrant the termination of the 2^nd Agreement. (“Ground 1”)

(2)  The Judge erred in not making a determination on whether the plaintiff was in breach of the 1^st Agreement, when the determination is relevant to (i) whether the defendant was entitled to damages on its counterclaim, and (ii) whether the plaintiff’s breach of the 2^nd Agreement was sufficiently serious to justify the termination of the 2^nd Agreement. (“Ground 2”)

(3)  The Judge erred in (i) relying on the proposition that the prima facie measure of damages for wrongful termination of a contract for professional service is the contract sum: Royden Lift Services Limited, supra, at §41, which is incorrect as a matter of law; and (ii) awarding the balance of the contract sum of the 2^nd Agreement as the damages when the plaintiff had failed to plead and prove any loss of net profits as a result of the defendant’s termination of the 2^nd Agreement. (“Ground 3”)

28.  The Draft NOA, in addition to seeking a dismissal of the plaintiff’s claim, also seeks by way of alternative that the order of damages against the defendant be substituted by an order that the defendant is to pay nominal damages in the sum of $1. At the same time, it also seeks an order that judgment be entered on the counterclaim for damages to be assessed.

E.  Our reasons for decision

29.  Section 63A of the District Court Ordinance Cap.336 provides that leave to appeal shall not be granted unless the Court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interest of justice that the appeal should be heard.

30.  For the reasons set out below, we are of the view that the intended grounds of appeal are not reasonably arguable and the intended appeal does not enjoy any reasonable prospect of success.

  E1.  Ground 1

31.  Ground 1 complains that the Judge did not make any determination on the uncontrolled descending of the lift incident on 26 June 2017, which the defendant argues is sufficiently serious to justify the termination of the 2^nd Agreement.

32.  At §§73 to 83 of the Judgment, the Judge discussed the incidents relied on by the plaintiff. The uncontrolled descending of lift no. 1 on 26 June 2017 was mentioned in §74, as part of the problems with lift no.1 in June and July 2017 according to the Occurrence Book. There was, however, no discussion of the incident.

33.  When refusing leave to appeal[25], the Judge explained that it was not necessary to further discuss the incident because after the plaintiff carried out repair work on 26 June 2017, there was no further incident of uncontrolled descending and the false overload alarm was the only remaining problem. The Judge further pointed out that it was never the defendant’s case that this uncontrolled descending incident alone was a sufficient reason for the termination of the 2^nd Agreement.

34.  We are of the view that the Judge did not err in his dealing with the uncontrolled descending incident on 26 June 2017, and that this ground is not reasonably arguable.

35.  First, as shown in the Occurrence Book, this incident on 26 June 2017 (“irregular and uncontrolled ascending or descending movements of the lift cab”) was among a number of problems that happened to lift no. 1 in June and July 2017[26]. The Judge found that the main problem with lift no.1 in June 2017 was the repeated occurrence of false overload alarm which caused the lift to stop operating[27], and that even after the plaintiff’s technician had reset the electronic board on 6 June 2017, the problem continued and only subsided after three weeks. In these circumstances, the Judge was entitled to consider the false alarm issue a serious and complicated issue and to focus on it.[28].

36.  Second, it is the Judge’s finding that after the plaintiff’s technician carried out repair works on 26 June 2017, there was no further complaint about uncontrolled descending or ascending movement, although lift no. 1 had other malfunctions on 28 June, 30 and 31 July 2017. As such, the Judge cannot be faulted for taking the view that it was not necessary to further discuss the incident of uncontrollable descending on 26 June 2017.

37.  Third, and most importantly, as pointed out by the Judge[29], the defendant’s case had always been that the plaintiff’s breaches were to be viewed in cumulation as “congeries of defects”[30]. It was also not the defendant’s case at the trial that the uncontrolled descending incident on 26 June 2017 was so serious that the incident alone justified the termination of the 2^nd Agreement. In seeking to argue on appeal that the incident is to be considered in isolation (instead of in cumulation) and that it is sufficiently serious to justify the termination of the 2^nd Agreement, the defendant is adopting a radically different position. It is not open to the defendant to adopt such a course when the new position is fact-sensitive and was not canvassed in the evidence at trial.

38.  In the written submission for this application, the defendant argues that if the uncontrolled descending incident on 26 June 2017 on its own is sufficiently serious to justify termination, then the Judge ought to make a determination on it. We do not agree. As pointed out above, on the case run by the defendant at the trial, it was not necessary for the Judge to deal with or make a finding on whether this incident amounted to a breach that would have justified the termination of the 2^nd Agreement.

  E2.  Ground 2

39.  Ground 2 complains that the Judge did not make any determination on the plaintiff’s breaches under the 1^st Agreement when it had pleaded that the plaintiff was in breach of the “Agreements”, which would include the 1^st Agreement. The defendant argues that if the plaintiff was in breach of the 1^st Agreement, it would at least be entitled to nominal damages. It is said that whether there was breach of the 1^st Agreement remains a live issue notwithstanding the Judge’s holding that the performance of the 1^st Agreement was not relevant to the issue of whether the termination of the 2^nd Agreement was justified.

40.  The Judge considered this ground unarguable[31] for two main reasons. First, as the counterclaim was premised on the plaintiff’s breaches of the Agreements necessitating the engagement of Sigma to do the remedial works listed in the Quotation, the defendant could not have succeeded on the counterclaim unless it established that (i) there were defects in the parts mentioned in the Quotation, and (ii) the plaintiff had failed to replace these defective parts. However, as the defendant had failed to prove that the plaintiff had breached the Agreements in failing to replace the parts listed in the Quotation[32], the counterclaim must be dismissed. Second, the defendant had not pleaded other heads of special damages, or submitted at the trial that nominal damages should be awarded in any event.

41.  The Judge further took the view that, even if it was reasonably arguable that the court should have decided whether the defendant was entitled to nominal damages, he would not exercise his discretion to grant leave to appeal having regard to procedural economy and proportionality.

42.  We agree with the Judge that the defendant bears the burden of proving that the parts mentioned in the Quotation were defective and that the plaintiff had failed to replace them pursuant to clause 5 of the Agreements, as a result of which costs were incurred to engage Sigma to carry out remedial works. Given that the Judge had, after considering the defendant’s complaints and the relevant provisions in the 1^st and 2^nd Agreements, concluded that the defendant failed to prove that the plaintiff was in breach of both Agreements by failing to replace the parts mentioned in the Quotation[33], this would be the end of the counterclaim. The defendant’s argument in this application that the Judge made the finding without first making a finding on whether the plaintiff was in breach of the 1^st Agreement is both circular and untenable.

43.  With regard to the argument that if the plaintiff was in breach of the 1^st Agreement, the defendant should at least be entitled to nominal damages, this is neither pleaded nor argued at the trial. There is no justification to permit this new argument to be raised on appeal. We also agree with the Judge that, in the circumstances of this case, especially in light of how the defendant’s case was run at the trial, it is neither in the interests of procedural economy nor proportionate to grant leave to appeal so that the issue of nominal damages may be argued.

44.  In relation to loss other than the Quotation, there is no room for arguing it on appeal since there was no plea of general damages or other special damages in the Defence and Counterclaim, and the claim of “Further and/or other relief” in the Prayer cannot change the position.

45.  The Draft NOA also contends that a determination on whether the plaintiff was in breach of the 1^st Agreement is relevant to the plaintiff’s breach under the 2^nd Agreement. No submission was made in support of this contention. In any event, this point is untenable. The defendant has not been able to show that cumulative breaches of a contract can, as a matter of law, justify the termination of another contract. The Judge has considered the defendant’s submissions on cumulative breaches at length and rejected the argument[34]. We see no ground to intervene.

  E3.  Ground 3

46.  Ground 3 concerns the quantum of damages awarded to the plaintiff. The defendant’s primary contention is that the damages should be based on loss of net profits and not loss of gross revenue, and the Judge erred in awarding damages based on the monthly service fee for the remainder of the term of the 2^nd Agreement. It is also argued that the proposition in Ryoden Lift Services, supra, at §41 that “the prima facie measure of damages for wrongful termination of a contract for professional service is the contract price” was incorrect as a matter of law, and the Judge erred in accepting and relying on it.

47.  We deal firstly with the issue of the measure of damages. The defendant seeks to argue in the application before the Judge and in this renewed application that the measure of damages should be the plaintiff’s loss of net profits rather than loss of gross revenue and that no evidence had been adduced in this regard. The defendant accepts that this argument was not raised at the trial[35]. In refusing leave to appeal, the Judge pointed out that this was a fact-sensitive point that involved the question of the amount of variable costs[36]. The defendant does not seem to dispute this. It also does not appear from the defendant’s written submission that it is saying that there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the plaintiff if the point had been taken at the trial: Flywin Company Limited v Strong & Associates Limited (2002) 5 HKCFAR 356 at §38. Nor has the defendant offered any explanation as to why the point was not raised on the pleading or argued at the trial.

48.  What the defendant seeks to argue is that the plaintiff bears the burden of pleading and proving its loss, hence it has to make good its case that it was entitled to be paid the contract price as a result of the defendant’s termination of the 2^nd Agreement. We do not think this argument can assist the defendant to overcome the objection that it is raising a new point.

49.  In terms of pleading, the plaintiff has pleaded in the Statement of Claim (at §17) that:

“On 19^th September 2017, the Plaintiff issued an invoice to the Defendant for a sum of HK$135,300.00 being the loss and damage suffered by the Plaintiff due to the repudiatory breach by the Defendant as pleaded above.”

50.  In answer, the Defence and Counterclaim pleaded (at §16):

“Save it is admitted that the Plaintiff issued an invoice to the Defendant on 19^th September 2017 for a sum of HK$135,300.00, paragraph 17 of the Statement of Claim is denied. The Defendant avers that loss and damages suffered by the Plaintiff, if any, was due to the repudiatory breach by the Plaintiff.”

There is no plea in the Defence and Counterclaim that the sum claimed was not the loss and damage suffered by the plaintiff; nor is there an averment that variable costs should be taken into account in ascertaining the plaintiff’s loss.

51.  At the trial, the term of the 2^nd Agreement and the fact that the defendant has not paid the monthly fee after the termination of the 2^nd Agreement on 15 September 2017 were not in dispute[37]. The defendant only took issue with the plaintiff’s case on damages on the basis that the plaintiff could only sue for damages and not for the contract sum because the contract could not be completed without the defendant’s cooperation[38].

52.  In the circumstances, the Judge, in our view correctly, held that: (i) the plaintiff has pleaded that the unpaid balance of the contract sum was its loss and damage occasioned by the defendant’s repudiation of the 2^nd Agreement; (ii) on the undisputed evidence, the defendant had not paid any monthly service fee to the plaintiff after the termination of the 2^nd Agreement; and (iii) the plaintiff was accordingly deprived of the monthly service fee as a result of the termination of the 2^nd Agreement, which was the loss and damage it has suffered.

53.  If the defendant wished to challenge the measure of damages that the plaintiff could claim or argue that the plaintiff was only entitled to loss of net profits and the balance of the contract sum was not its loss of net profits, it is obliged to properly raise it in the pleading. Fairness requires that the plaintiff be given due notice of what case it was called upon to meet so that it could prepare its case accordingly. It is thus incumbent upon the defendant to state the grounds on which it sought to contest the amount of damages claimed by the plaintiff and to give particulars of all the facts relied upon to support any positive case it sought to advance on the amount of the damages claimed: Wang Ruiyun v Gem Global Yield Fund Ltd [2011] 3 HKLRD 785 at §§29 and 30. The defendant, not having properly pleaded its case on the measure of damages that the plaintiff is entitled to, cannot now seek to raise this ground as a ground of appeal.

54.  As to the proposition in the Ryoden Lift Services Limited case, we would make the following observations. The fundamental principle governing damages for breach of contract is to be found in Robinson v Harman (1848) 1 Exch 850 at 855, which held that:

"The rule of common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed."

55.  The proposition in Ryoden Lift Services Limited (at §41) is derived from the following passage in McGregor on Damages (17^th Edition) at §28-002:

“The measure of damages for wrongful dismissal is prima facie the amount that the claimant would have earned has the employment continued according to contract subject to a deduction in respect of any amount accruing from any other employment which the claimant, in minimising damages, either had obtained or should reasonably have obtained. The rule has crystallised anomalously in this form. It is not the general rule of the contract price less the market value of the claimant’s services that applies; instead the prima facie measure of damages is the contract price, which is all the claimant need show. This is then subject to mitigation by the claimant who is obliged to place his services on the market, but the onus here is on the defendant to show that the claimant has or should have obtained an alternative employment.” (Emphasis added)

56.  This passage, which appeared in the chapter on contracts of employment under the section dealing with the normal measure for wrongful dismissal by the employer, is reproduced as §33-005 in the latest edition (21^st edition) of McGregor on Damages. Both in Ryoden Lift Services Limited and the present case, the contract involved is not an employment contract but a contract for service. The law on the measure of damages for breach of contracts for professional and other services by the party engaging the services are discussed in another chapter in McGregor on Damages (21^st edition) at §34-002. The pertinent part states as follows:

“A person whose services have been improperly dispensed with has a number of alternative remedies open to them, similar to those whose available to the employee and also to the agent acting on behalf of a principal. They may sue on the contract for such remuneration of fees as have been agreed and, if suit on the contract is not available, they may sue on a quantum merit for the value of the services already rendered. With these actions at their command, an action for damages may not prove necessary. When it is brought into play, the measure of damages is likely to be the amount that they would have earned from the services had they not been prevented from continuing to act; consequential losses are somewhat difficult to envisage. As with the employee, they will be required to mitigate their damage by seeking alternative remunerative occupation. However, since they have a freer hand in performing the services and may not have to devote their time exclusively to the contract, other services upon which they embark will not be truly alternative if they could have performed both concurrently, and will therefore not go in mitigation of damage.”

57.  In our view, the above quoted passage represents the law to be applied in a case like the present, namely where a contract for service is repudiated by the party engaging the service.

58.  In the present case, the monthly service fees for the remaining contractual period of the 2^nd Agreement are what the plaintiff would have earned had it not been prevented from continuing with the 2^nd Agreement by the defendant’s wrongful termination. The defendant has not raised the issue of mitigation of loss in its pleading. Nor was it shown at the trial that the plaintiff could have mitigated its loss through alternative engagement. In the circumstances, the award of the service fees for the remainder of the term of the 2^nd Agreement as the measure of damages for the defendant’s wrongful repudiation cannot be faulted.

59.  Accordingly, while the reference to the proposition in Ryoden Lift Services Limited, supra, at §41 is not entirely apposite, the Judge has not erred in his award of damages on the plaintiff’s claim.

  E4.  Conclusion

60.  For the above reasons, we are of the view that the intended appeal does not enjoy a reasonable prospect of success. Nor is there any matter which, in the interests of justice requires the appeal to be heard.

61.  Accordingly, we dismiss the defendant’s summons for leave to appeal.

62.  As the present application is totally without merit, we further make an order under Order 59 rule 2A(8) of the RHC that no party may pursuant to Order 59 rule 2A(7) request our determination to be reconsidered at an oral hearing inter partes.

F.  Costs

63.  Applying the normal rule of costs follow the event, we order the defendant to pay the plaintiff’s costs of the summons to be summarily assessed.

64.  We have considered the statement of costs of the plaintiff and have the following observations:

(1)  The papers for the application, the intended grounds of appeal, the arguments deployed as well as the authorities relied upon are substantially the same as those in the leave application made to the Judge. The solicitors and the counsel were involved in the trial and also the leave application made to the Judge, and are thus familiar with the papers, the issues, the arguments and the law in question.

(2)  This being the case, on party and party basis, the time claimed by the solicitors under C1(b) (attendance on client regarding the leave application), C2 (attendance on counsel), D1(b) (reviewing and commenting on the plaintiff’s statement in opposition), and D2 (perusal of the defendant’s submissions and authorities) are on the high side and should be reduced.

(3)  C1(a) (attending client on the Judge’s decision on the leave to appeal application) is a duplication of the costs of the leave application made to the Judge, which the Judge had ordered the defendant to pay to the plaintiff.

(4)  D1(a) (preparing statement of costs) is generally not allowed in summary assessment: see Practice Direction 14.3 at §13.

(5)  We do not see the need for D3 (legal research) given that counsel was instructed and the legal arguments in this application had been canvassed at trial and/or in the application made to the Judge.

(6)  Having regard to the nature of this application and the features identified in (1) above, the amount of counsel fee is too high and is to be reduced.

65.  Taking a broad brush approach, we summarily assess the plaintiff’s costs at HK$120,000.