TAI WAI LING v. MODERN BEAUTY SALON (HK) LTD

HCSA 23/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO. 23 OF 2016

(ON APPEAL FROM SMALL CLAIMS TRIBUNAL

CLAIM NO. 44279 OF 2015)

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DECISION

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Introduction

1.  This is an application of Modern Beauty Salon (HK) Limited (“the Company”) for leave to appeal against the determination of an adjudicator of the Small Claims Tribunal made on 27 April 2016. The adjudicator handed down the reasons for his determination dated 5 July 2016 (“The Reasons”).

2.  The adjudicator found that the Company repudiated a service agreement with one Madam Lam who passed away in May 2012. He made an award of HK$50,000 in favour of the estate of Madam Lam. He also ordered that the Company should pay the estate of Madam Lam its costs in the sum of HK$8,013.

3.  The major factual findings made by the adjudicator and accepted by Mr Chen, for the Company, are as follows:

   a. Madam Lam since July 2010 had started purchasing beauty treatments from the Company and for this purpose she had an account with the Company.

   b. She was assured that the one-year expiry period for receiving treatments was extendable.

   c. When Madam Lam passed away, the remaining value of her beauty treatments unused stood at HK$81,000.

   d. Both the sister of Madam Lam and her father repeatedly requested that the account of Madam Lam should be transferred to her.

   e. The Company turned down such requests on the ground that the account of Madam Lam had expired. It forfeited the entire balance in the account of Madam Lam in the sum of HK$81,000.

f.    Ms Tai, the mother of Madam Lam acting for the estate of Madam Lam, was content to sue for HK$50,000 only and abandon the balance of HK$31,000.

4.  In light of these factual findings, the adjudicator held that it was a condition of the agreement between Madam Lam and the Company that the expiry period of the beauty treatments purchased by Madam Lam could be extended. He further held that the refusal on the part of the Company to extend the time and the purported forfeiture of the balance amounted to repudiation of the agreement. The Company does not gainsay these holdings.

5.  Mr Chen accepts that the Company repudiated the agreement. His intended appeal is only about the remedy. He submits that the adjudicator failed to find out the actual loss suffered by Madam Lam and assess the quantum of damages properly on that basis and instead he simply ordered a total refund of the balance.

6.  Mr Chen further submits that the adjudicator failed to consider and decide whether the estate of Madam Lam has accepted repudiation or it has affirmed the agreement despite the repudiation. He goes on to submit that if the repudiation has not been accepted, the agreement is still alive and there is no reason why the Company has to make refund to the estate of Madam Lam.

7.  I cannot agree with the grounds advanced by Mr Chen. The correct analysis on the accepted factual findings in my judgment should be as follows.

8.  Every time a request to transfer the account of Madam Lam was made on behalf of the estate of Madam Lam, it was an affirmation of the agreement treating the same as alive. On the other hand, every single refusal to such a request was an independent and separate repudiation. The adjudicator found that all such requests were refused meaning the last request was also refused.

9.  The last refusal called for an election to be made by the estate of Madam Lam. The claim made by the estate of Madam Lam in the Small Claims Tribunal for the sum of HK$50,000 was an unequivocal act of acceptance of repudiation of the agreement by the Company. The estate of Madam Lam never asked for specific performance. It cannot be taken to have treated the agreement as still being afoot. The estate of Madam Lam is plainly entitled to damages as a result of the repudiation.

10.  As can be seen in the Reasons, the sum of HK$50,000 was awarded as damages. Mr Chen makes no submission on why an award of HK$50,000 as damages is an error in law.

11.  In the premises, I am not persuaded that these grounds of the intended appeal have any merit.

12.  I should point out that in my view first and foremost it has to be established that it was a term of the agreement that the agreement was transferable. There was no discussion about this at trial and the only defence raised by the Company before the tribunal is that the agreement had expired. There is no express finding that it was a term of the agreement that it was transferable upon the demise of Madam Lam at all. The whole proceedings proceeded on the basis that the agreement was transferable and the only difference was whether the expiry date was extendable.  Thus, I need say no more about this.

13.  Mr Chen makes further attack on the Reasons in regard to the adjudicator’s conclusions about misrepresentation and estoppel. I agree with his submissions. The adjudicator plainly erred in law in his conclusions that the breach of the condition of the agreement made orally amounted to actionable misrepresentation and that the plea of estoppel was available to the estate of Madam Lam in the claim against the Company.

14.  However, given his unchallenged finding of the repudiation of the Company, clearly the contractual claim of the estate of Madam Lam is established. Other conclusions made by the adjudicator are irrelevant and would not affect the entitlement of the estate of Madam Lam to damages.

15.  I thus conclude that the Company fails to show that there are arguable grounds of appeal. I am not convinced that leave should be granted pursuant to section 28 of the Small Claims Tribunal Ordinance, Cap. 338. Accordingly, I dismiss this application with no order as to costs.

16.  Lastly, I thank Mr Chen for his able submission.